The
Daily Signal Obamacare
Exchanges Are ‘Disappointing’ With Fewer Than 4 Million Newly
Insured. The Government Hoped for 26 Million. Sharyl
Attkisson June
24, 2014
President
Obama after signing into law the Patient Protection and Affordable
Care Act on March 23, 2010. (Photo: AFP/Jewel Samad/Newscom)
In
April, President Obama told the nation that “marketplace” or
“exchange” enrollment, at 8 million customers as of March 31, had
exceeded expectations and costs were lower than expected.
Many
in the news media accepted the selectively released statistics,
despite the Obama administration’s record of sometimes providing
inaccurate or incomplete information on HealthCare.gov. Even today,
the government continues to withhold relevant public information on
costs and enrollment requested by Congress and the press under the
Freedom of Information Act.
In
fact, the measure of the Affordable Care Act’s success rests
neither with individual anecdotes nor in the Obama administration’s
self-assessments. It’s a long-term process that many analysts say
will take years to unfold.
One
thing that’s not in question: The insurance industry already has
been largely transformed.
Photo:
Xizi Cecilia Hua
An
enrollment drive for Obamacare. (Photo: Xizi Cecilia Hua)
Many
who were considered uninsurable now have affordable policies. But the
Affordable Care Act has shifted the cost burden for those who already
had insurance. More policies now have bigger deductibles and cost
more.
“In
general, healthy people are paying more and unhealthy people are
paying less,” says a source who supports and helped implement
Obamacare but is disappointed with the results to date, “with those
above-average [income] tending to pay more and those below-average
[income] tending to pay less.”
“Is
the new law effective in reducing the number of uninsured? Yes, but
so far not very,” he says.
Key
questions include:
How
many actually have enrolled?
How
many of those were previously uninsured?
How
has Obamacare affected the overall pool of uninsured?
What
percentage of eligible people have signed up?
What’s
the cost?
Enrollment:
Less Than Advertised
The
administration hasn’t released any enrollment figures in the last 2
1⁄2 months, and a spokesman from the government’s Centers for
Medicare and Medicaid Services, which helps oversee Obamacare, said
the agency is not likely to issue any updates soon.
President
Obama speaks about the Affordable Care Act with Vice President Joe
Biden in the Rose Garden at the White House in Washington on April 1,
2014. (Photo: Nicholas Kamm/Getty/Newscom)
President
Obama speaks about the Affordable Care Act with Vice President Joe
Biden in the Rose Garden at the White House on April 1, 2014. (Photo:
Nicholas Kamm/Getty/Newscom)
As of
March 31, according to the Obama administration, 8 million people
signed up for private insurance in the Health Insurance Marketplace,
exceeding its target of 7 million.
“The
Affordable Care Act is working,” said an April 17 White House fact
sheet. “It is giving millions of middle class Americans the health
care security they deserve, it is slowing the growth of health care
costs and it has brought transparency and competition to the Health
Insurance Marketplace.”
But
the 8 million figure is overstated because it counted people who
weren’t actually covered because they hadn’t paid their premiums,
which Blue Cross, analysts and the government agree is in the 15
percent to 20 percent range.
Therefore,
the actual number of Obamacare enrollees as of March 31 was likely
between 6.4 million and 6.8 million, below both the administration’s
figure of 8 million and its stated target of 7 million.
Nobody
from the White House responded to repeated requests for comment. A
spokesman for CMS said there were no plans to release figures on paid
enrollment, even though health policy analyst Robert Laszewski says
the administration could provide the number in days or even hours if
it wanted to.
Last
week, Democrats on the House Committee on Oversight and Government
Reform, led by Rep. Elijah Cummings of Maryland, released a fact
sheet using data from 13 insurance companies that said actual health
exchange enrollments exceeded insurance company projections by 4
percent.
“This
result was achieved despite significant challenges with federal and
state websites,” said Cummings.
Rep.
Elijah Cummings (D-MD) (Photo: Jeff Malet Photography/Newscom)
Rep.
Elijah Cummings, D-Md. (Photo: Jeff Malet Photography/Newscom)
Previously
Uninsured
Jackie
Berman is one of Obamacare’s success stories. She had no insurance
until HealthCare.gov came online. According to the government’s
Facebook page touting positive HealthCare.gov stories, Berman, a
special education teacher in Chicago, was left uninsurable by a car
accident. Today, she is receiving federal subsidies to help her buy
insurance through the health insurance marketplace created by the
Affordable Care Act.
But
how many new marketplace enrollees were uninsured like Berman? And
how many were simply re-insuring after being bumped off their
existing plans by Obamacare?
Jackie
Berman (Photo: Get Covered Illinois)
The
government touts Jackie Berman as an Obamacare success story. (Photo:
Get Covered Illinois)
Estimates
of how many marketplace enrollees were previously uninsured range
from about one-third to more than half, depending on the survey and
the methods used.
A
recent Kaiser Family Foundation survey found that 43 percent of those
who purchased insurance through the marketplace already had
insurance; 57 percent are newly insured.
“The
enrollment figures for marketplace coverage will grow over time,
assuming that the exchange insurance plans don’t fail as a result
of adverse selection,” said the source who supports and helped
implement Obamacare. “But the impact on reducing the uninsured so
far is very disappointing.”
The
Kaiser numbers are not what the Obama administration hoped for, but
they are better than other estimates. One reason for the difference
is how the surveys define “previously uninsured.” Kaiser
considered Americans previously uninsured even if they recently had
insurance, just not when they signed up on HealthCare.gov. Other
surveys excluded those from the “previously uninsured” category
if they had insurance at any time during the prior year.
Laszewski
said he believes about half the new enrollees were previously
uninsured and many others had insurance but were shifted into the
exchanges because of changes caused by Obamacare.
Those
changes meant the plan offered by Virginia Beach business owner Betsy
Atkinson did not meet Obamacare’s requirements, which she says left
her with no choice but to drop her company’s insurance.
Virginia
Beach business owner Betsy Atkinson (Photo: CBS This Morning via
YouTube)
Virginia
Beach business owner Betsy Atkinson dropped her company’s
insurance. (Photo: CBS This Morning via YouTube)
Another
number falls short as well. The source who supports and helped
implement Obamacare said about 38 million uninsured are eligible for
Obamacare and “all of them should be interested in obtaining it.”
Assuming
the most positive estimates—that 85 percent of the 8 million
enrollees have paid their premiums and 43 percent had coverage
before—the newly insured would number only about 3.9 million. By
this time, CBO had projected 19 million would have been removed from
the ranks of the uninsured, and CMS predicted 26 million.
Fewer
than 4 million newly insured “doesn’t put much of a dent in the
problem,” said the source.
Many
enrollees were gained due to “coverage substitution,” according
to health care policy expert Edmund Haislmaier of The Heritage
Foundation, which publishes The Daily Signal.
Haislmaier,
who testified before the House Committee on Oversight and Government
Reform earlier this month, said this means that people who had
insurance then substituted what they had for new coverage with more
in the way of subsidy dollars.
“If
you’ve got coverage now and a government program offers a
replacement with more subsidies, then you’re going to have an
incentive to move to that,” Haislmaier explains. “No doubt it
helps people by helping them buy something that they already had. …
But it isn’t a net increase.”
Meanwhile,
some who were forced out of their existing coverage but not eligible
for subsidies found themselves having to re-enroll at much higher
rates than before, said Laszewski.
“It
was not uncommon to see [insurers] increase their [rates] by 35
percent to bring policies into compliance with Obamacare,”
Laszewski said. “So, they have the same relatively healthy people
with perhaps more benefits but for 35 percent more premium. That may
be good news for the insurance companies but not for the individuals
who are forced to pay more than a third more.” Reduction
in Uninsured By
all credible accounts, Obamacare has resulted in a reduction in the
number of people who are uninsured.
The
story of Lou Vincent of Akron, Ohio, is held out by the Obama
administration as an example of the positive impact. He suffers from
Type 2 diabetes and went uninsured for 10 years until Obamacare. Now,
thanks to the Affordable Care Act, he and his wife are covered for
$379 a month.
Research
from RAND Corp. shows 9.3 million more people had insurance in March
2014 than did in September 2013, and a recent Gallup poll puts the
uninsured rate at its lowest level since 2008. The percentage of
adults who don’t have insurance has dropped from 20.5 percent to
15.8 percent in the last year.
But
it’s unclear how much of the drop can be credited to Obamacare and
how much to other factors, such as changes to Medicaid enrollment.
RAND’s study and another from the Urban Institute Health Policy
Center both found fewer than half of the newly-insured gained
coverage through the Obamacare exchanges.
Co-Op
Enrollment
At
the state level, enrollment at state health insurance co-ops created
under the Affordable Care Act is reported to be about 80 percent of
what was expected for 2014.
According
to statistics released this month by the Oversight and Government
Reform Committee, 450,000 people signed up with the co-ops compared
to original projections of about 575,000 for this year. Because the
co-ops received federal loans, the committee was able to calculate
how much in federal funding it has cost so far for each co-op
enrollee.
The
best performer from the standpoint of federal loan cost-per-enrollee
is CoOportunity Health, which serves Iowa and Nebraska. It received
$112.6 million in federal loans and reports signing up 76,881
enrollees as of May 1, at a cost of $1,464 in federal funding per
enrollee so far.
Tennessee’s
health insurance co-op, Community Health Alliance Mutual Insurance
Co., reported just 354 enrollees as of April 1 at a cost of $207,081
in federal funding per enrollee, according to the committee. The
co-op received a total of $73.3 million dollars in loans under the
Affordable Care Act.
Photo:
Jim Weber/The Commercial Appeal/ZUMAPRESS.com
A
rally for Obamacare in Memphis. (Photo: Jim Weber/ZUMA Press/Newscom)
For
the low performers, Darrell Issa, R-Calif., who leads the oversight
panel, says there’s a question as to whether co-ops will be able to
pay back the taxpayer loans. In its 2013 budget statement, the Office
of Management and Budget projected taxpayers would lose 43 percent of
the money loaned out, or $860 million of a $2 billion investment
offered to two dozen co-ops.
Medicaid
Enrollment
To
date, it’s been the dramatic expansion of Medicaid under the
Affordable Care Act that has reduced the ranks of the uninsured far
more than the exchanges or HealthCare.gov. Medicaid, state-provided
health insurance for the poor, is now available to those who earn up
to 138 percent of the federal poverty line.
(Photo:
John Moore/Getty Images)
An
uninsured woman at a low-cost clinic run by the Rocky Mountain Youth
Clinics in Aurora, Colo. (Photo: John Moore/Getty Images)
CMS
estimates Medicaid will get 8.6 million new enrollees in 2014, thanks
to Obamacare. Twenty-six states have expanded Medicaid, but if all
did, spending by states would increase 26 percent—or $952
billion—from 2013 to 2022.
Where
will the money come from to fund such an expansion? The federal
government is paying 100 percent of the Medicaid extra benefit cost
for the first three years. Then, 10 percent of the cost will transfer
gradually back to the states, which already are under tremendous
budget pressure.
“State
budgets are horrible. The federal budget is horrible. There’s
pressure to reduce anywhere you can—but we’re just expanding,”
says the inside source. “How the state and federal budgets will
react to this dilemma remains to be seen.”
Overall
Cost
The
White House released a fact sheet in April that credited the
Affordable Care Act for the fact that “health care costs are
growing at the slowest level on record.”
“Since
the law passed, real per capita health care spending is estimated to
have grown at the lowest rate on record for any three-year period and
less than one-third the long-term historical average stretching back
to 1960,” it said.
But
what the fact sheet did not point out, as a source told The Daily
Signal, was that this “remarkable situation was also the case in
2008 and 2009, before the ACA was enacted. It’s highly misleading
to imply that it results from the ACA. Most experts attribute most of
the slower cost growth to the Great Recession and weak economic
growth since then.”
The
White House fact sheet also pointed out the Congressional Budget
Office “projects the deficit will shrink more and premiums will be
lower than expected: CBO previously estimated that the ACA will
reduce the deficit by $1.7 trillion over two decades, and, just this
week, CBO concluded that lower-than-expected Marketplace premiums and
other recent developments will cut $104 billion from our deficit over
the next 10 years.”
An
ACA supporter (R) talks with a student (L) about Obamacare on the
campus of Santa Monica City College in Santa Monica, California in
October 2013. (Photo: Robyn Beck/AFP/Getty Images/Newscom)
An
Obamacare supporter, right, talks with a student about the health
care law at Santa Monica City College in California last October.
(Photo: Robyn Beck/Getty Images/Newscom)
But
it neglects to mention that the coverage expansions in the ACA are
still estimated to increase federal spending by $1.383 trillion over
this same period.
At
this point, the CBO figuratively threw its hands in the air and
stated that it no longer can figure the overall financial impact of
the Affordable Care Act because it no longer can “determine exactly
how the provisions of the ACA that are not related to the expansion
of health insurance coverage have affected their projections of
direct spending and revenues.”
That’s
a big blow to the ability to track actual Obamacare effects on the
federal budget and compare them to the original CBO estimate in 2010
that the health care law would reduce the deficit by more than $120
billion over a decade.
Future
Premium Increases
What
will next year’s insurance rates be?
Avalere,
a health care advisory group, looked at nine states and found premium
increases this year of 2.5 percent to 16 percent.
Laszewski,
whose predictions have proven uncannily accurate, estimates the
average cost of premiums for Americans will go up 9.9 percent next
year, or just under the threshold that triggers a regulatory review
under federal guidelines. He said insurers will not have adequate
claims data by the time 2015 rates are due at the end of this week,
so they will push rate increases to near the limit.
Today,
Americans’ satisfaction with the Affordable Care Act is mixed. A
recent Gallup survey found 51 percent of respondents disapprove of
the health care law. Only 43 percent approve.
“A
lot of dissatisfaction is being communicated from consumers to
insurance company call centers and their agents about the new health
insurance plans, particularly compared to the plans people are used
to,” said Laszewski.
Photo:
Kelli Tremblay, an authorized agent with BlueCross BlueShield of
North Carolina, works a station at Concord Mills. (Photo: Jeff
Siner/Charlotte Observer/MCT)
Kelli
Tremblay, an agent with BlueCross BlueShield of North Carolina, works
a station at Concord Mills. (Photo: Jeff Siner/Charlotte
Observer/MCT)
Still,
millions who previously had no insurance now are covered. Some are
eligible for coverage they weren’t before, some became eligible for
taxpayer subsidies for the first time and still others, many of them
uninsurable before, shopped and found a better plan.
On
the other hand, millions got booted off of policies they said they
liked for ones that they like less—that often cost more. And the
resulting reduction in the number of uninsured to date is modest at
best.
“This,”
says Laszewski, “is going to take years to play out.”
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