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July 30, 2014

A First Look at Enrollment Under Obamacare

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Obamacare’s initial open-enrollment period ended in mid April. The big question since then has been, “What were the results?”

Hard data have been lacking — until now. My colleague Drew Gonshorowski and I have just finished reviewing insurance-market data from the first quarter of 2014, and we can report that Obamacare’s results are not very impressive.

Certainly they’re not as impressive as the Obama administration would like you to believe. On May 1, outgoing health and human services secretary Kathleen Sebelius triumphantly reported that 8 million people had picked a plan through the exchanges during open enrollment. Yet, since then, HHS has assiduously refused to provide figures for how many of those 8 million actually completed the transaction. Nor has HHS provided any breakout of exchange sign-ups by those who were previously uninsured versus those who were already insured but obtained replacement coverage through the exchanges.

Several prominent organizations — specifically, the Rand Corporation, the Kaiser Family Foundation, the Urban Institute, McKinsey & Company, and Gallup — have attempted to fill the information gap with their own coverage surveys. Yet even well-constructed surveys have limitations and, at best, can offer only approximate answers. Analysts and commentators (on both the left and the right) have also weighed in with varying guesstimates and interpretations.

Now, newly available health-insurance enrollment data provide a clearer and more comprehensive picture of the changes in coverage during the initial implementation of Obamacare. Unlike estimates based on survey results, the newly available data consist of actual enrollment counts for the private market, Medicaid, and the Children’s Health Insurance Program (CHIP).

The data on private coverage come from quarterly reports that insurers file with state regulators. At this point, only the first installment (data from the first quarter of 2014) of what we need for a full assessment is available. Because of delays in processing enrollments and a surge in exchange applications in March, we must wait for second-quarter data to see the complete picture.

Nonetheless, this first tranche of data is highly revealing. Drew and I present the numbers and analyze them in more detail in our new report, but here are three key takeaways from the data for the six-month period of October 1, 2013, through March 31, 2014:

Net enrollment in the individual-coverage market grew by 2,236,942 individuals, while net enrollment in employer group coverage declined by 1,716,540 individuals.

The decline in employer-sponsored coverage offset 77 percent of the gain in individual-market coverage, for a net increase in private-market coverage of only 520,000 individuals during the period.

Medicaid and CHIP enrollment reports from the Centers for Medicare and Medicaid Services (CMS) show that enrollment in those programs increased by about 5 million individuals during the same six-month period, with 87 percent of those gains occurring in the 26 states (plus the District of Columbia) that elected to adopt Obamacare’s expansion of Medicaid to able-bodied adults.

The biggest piece of the puzzle still missing is the coverage status of the 3,777,438 individuals whom HHS reported as picking an exchange plan between March 1 and the close of open enrollment in April. Few, if any, of them would have had their coverage activated before the end of March, so those who actually gained coverage will show up in the second-quarter data, along with anyone who selected an exchange plan earlier but had his enrollment delayed beyond March due to the exchanges’ software problems.

Even so, this first installment of enrollment data marks a shift from speculation to reality in the ongoing public debate over Obamacare. It also offers guidance on what to expect next.

Assuming no further erosion in employer group coverage, and further assuming that all the individuals who picked an exchange plan during the last two months of open enrollment actually obtained coverage, it now appears that the upper bound for any net increase in private coverage during the first year of Obamacare will be in the neighborhood of 5 million individuals. Of course, those two assumptions are big ifs, so the final figure might well be lower.

We also know that Medicaid enrollment continues year-round. CMS reported that a further 1.1 million individuals were added to the Medicaid rolls in April. Thus, it’s pretty safe to project that when the final figures for Obamacare’s first year are in, the Medicaid expansion will be responsible for over half of any net increase in health-insurance coverage. In that regard, it should be noted that the Medicaid expansion population consists of able-bodied working-age adults, 82 percent of whom don’t have dependent children and 52 percent of whom are ages 19 to 34.

So far, this is not a particularly impressive performance — unless, of course, you believe that giving several million able-bodied, working-age adults substandard government health coverage as a consolation prize for remaining unemployed or underemployed — and doing so at considerable disruption and expense for everyone else — constitutes a significant achievement or an acceptable substitute for pro-growth economic policies.

 - Ed Haislmaier is a senior research fellow in the Heritage Foundation’s Center for Health Policy Studies.

Originally appeared in the National Review Online

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