Obamacare Enrollment Overstated by 400,000

Published November 26, 2014

The U.S. Department of Health and Human Services once again lowered its estimate of the number of Americans enrolled in health plans through government exchanges in 2014. The 6.7 million enrollees that remain are far fewer than the eight million touted in May at the end of the last open enrollment period.

The latest downward revision was caused by HHS acknowledging on November 20 nearly 400,000 people who had bought only dental coverage through the exchange were inappropriately included in previous enrollment reports.

“It is almost as though the Obama administration is trying to teach us a lesson about dishonesty in government, and they’re not going to stop until we get it,” said Michael Cannon, director of health policy studies at the Cato Institute.

Enrollment Goal in Flux

The number of people enrolled through the exchanges, and the government’s estimates of enrollment, have become a key point of contention regarding the law.

The Congressional Budget Office (CBO), often cited as a neutral referee in policy disputes, originally projected approximately eight million Americans would sign up through the exchanges. After the U.S. Supreme Court ruling states did not have to expand Medicaid, in July 2012 CBO increased its estimate to nine million, assuming many who would have otherwise been eligible for the expanded Medicaid program would instead seek exchange-based coverage.

As the open enrollment date grew closer, CBO lowered its estimate to seven million. In July 2013, HHS Secretary Kathleen Sebelius endorsed that number in an interview with the Washington Post, saying, “Our target for this first open enrollment period is to have 7 million newly enrolled individuals throughout the country.”

Following the disastrous rollout of the Healthcare.gov Web site and several nonfunctional state-run exchanges, CBO again lowered the estimate, to only six million. The lower number allowed Sebelius and other Obamacare defenders to tout the program as successful when the open-enrollment period closed. Sebelius said at the time, “More than eight million Americans signed up through the Marketplace, exceeding expectations and demonstrating brisk demand for quality, affordable coverage.”

Christopher Conover, a research fellow at Duke University’s Center for Health Policy and Inequalities Research, says Obamacare enrollment numbers are still well below what was projected.

“The administration failed to meet even the CBO’s adjusted target of six million average daily exchange enrollments in 2014,” Conover said. He explained the number six million was intended to represent the average number who would have exchange enrollment in any given month during 2014, and that after this latest downward revision the average monthly enrollment stands at about 5.4 million.

“Compared to the original target, which itself was arguably quite modest given that Kaiser Family Foundation estimates 28.7 million [people] were eligible for Exchange coverage, what was achieved in 2014 was only 77 percent of the CBO target,” said Conover. “Where I went to school, such a grade warranted a D-plus.” 

 No-Pays, Other Adjustments

The 400,000 nonexistent Obamacare enrollees aren’t the only gap between the numbers originally claimed by HHS and current enrollment.

“The administration has had to adjust enrollment numbers multiple times because not every enrollee paid their premiums,” said Josh Archambault of the Foundation for Government Accountability. “In addition, hundreds of thousands were thrown off [the rolls] because they did not provide documentation to prove they qualified for subsidies due to citizenship issues. In other words, the original enrollment numbers reported were misleading for a multitude of reasons.”

Of the more than eight million HHS reported in May 2014 as signing up for coverage through the exchanges, about 900,000 either did not make their first premium payment or later stopped paying.

Cannon said the large number of people dropping coverage represents a troubling trend for Obamacare. “It means that potentially hundreds of thousands of Exchange enrollees are realizing that they are better off waiting until they get sick to purchase coverage. If enough people come to that conclusion, the exchanges collapse.”

More Enrollment Uncertainty Ahead

Obamacare enrollment numbers are likely to remain murky. While many policyholders are dropping exchange-based coverage, a new open-enrollment period has begun, running from November 15, 2014 through February 15, 2015.

The combination of attrition and new signups during this period, on top of generally limited enrollment information available from HHS, means it will be months before anyone has a clear sense of where enrollment stands.

Adding to the uncertainty over enrollment data has been the Obama administration’s generally poor record of making enrollment information available. That seems to be improving, however, according to one critic of the administration and Obamacare.

“There was a night and day difference between Tavenner’s immediately taking responsibility for the goof on inclusion of dental plan enrollees, as opposed to the charade last spring of having figures dragged before congressional hearings in order to get hard numbers on what was going on,” said Duke University’s Conover. As administrator of the Centers for Medicare and Medicaid Services, Tavenner is one of the officials responsible for implementation of Obamacare.

But there is still an important gap in the information being provided.

“The still-gaping hole relates to knowing how many of the paid enrollees were previously uninsured. It’s the uninsured count that matters most as a metric,” said Conover. “Even a massive exchange enrollment figure is meaningless if most of it consists of people who have merely swapped one flavor of coverage for another, as opposed to people attaining coverage for the first time after a spell of being uninsured.”

Sean Parnell ([email protected]) is managing editor of Health Care News.