Is ObamaCare Really Working? – Part I

Defenders of ObamaCare say it is really working. Those on the record with this opinion include President Obama – “working better than intended,”  Steven Rattner (The New York Times) – “working,” Gail Collins (The New York Times) – “working better than any of us imagined,” Jonathan Chait  (New York Magazine)– working incredibly well,” and Paul Krugman ( The New York Times) – “working, gasp!”

Those who believe this are either misinformed, delusional, or blinded by their liberal ideology. Either that or they think that if they repeat a lie enough times most people will begin to believe it. Unfortunately, they may be correct. That’s why this blog, and others like it, are so important as tools to communicate the truth.

One such blogger is Chris Conover, Research Scholar at the Center for Health Policy and Inequalities Research at Duke University, whose posts appear in Forbes. He gives four simple and objective ways to tell if ObamaCare is working.

Method #1: Exchange Enrollments vs. Target Population

The Obama administration is claiming 11.4 million enrolled under ObamaCare this year. Since these do not represent paid enrollments, and according to the administration itself, the expected rate off of payments will be only 87% (based on the 2014 experience), the real enrollment shrinks 13% to 9.9 million.

Also, these figures represent peak coverage, which greatly exaggerates the extent of coverage expansions. This is why analysts at the Congressional Budget Office (CBO) and in the Office of the Actuary for Medicare have always made their projections of coverage in terms of a much fairer and sensible metric: average daily coverage. The number of people who are ever uninsured during a year is anywhere from 28 to 40% higher than the number who are uninsured at any given point in time. Taking these issues into account, Conover estimates that average daily paid enrollment on the Exchanges was only 5.7 million, which is 29% below “peak” enrollment of 8 million last year. That would put the 2015 average daily paid enrollment figures at approximately 29% of 11.4 million or 8.1 million.

The White House once again extended the open enrollment period to allow more enrollments so the final figures are not yet counted. Allowing for additional enrollments, Conover makes a “best-possible-case” estimate of 10 million enrollees for 2015.

When compared to the number of people who hypothetically are eligible for Exchange coverage, Conover finds that ObamaCare achieved a market penetration rate of 20% last year and if we’re lucky it will hit 36% this year.

Market penetration - Exchanges

(click on image to enlarge)

There are two surprising conclusions from this graph.

  • First – the market penetration level is surprisingly low for a product that is being sold with subsidies for 85% of those enrolled.
  • Second – the pace of enrollment gains is slowing down. (The increase in market penetration from 2014 to 2015 will be only four fifths the number who newly enrolled in Exchanges in 2014.) The CBO projected that this year Exchange enrollments would be more than double those in 2014.

 

Method #2: Medicaid Enrollments vs. Target Population

The same analysis can be done for Medicaid enrollment. When we do this we find Medicaid enrollment has been better than Exchange enrollment. Assuming Medicaid enrollments follow the same pattern as in 2014 in terms of month-to-month growth rates, overall monthly enrollment for 2015 will be more than double that of 2014.

Market penetration - Medicaid

(click on image to enlarge)

Conover calls this “good news and bad news.” The White House is certainly pleased for it was their intention to force Medicaid expansion on all the states until the Supreme Court struck that idea down. But it is bad news for two reasons:

  • First – Medicaid accounts for 89% of the net gain in health insurance coverage in 2014.
  • Second – Medicaid is inferior healthcare insurance; for doctors and for patients. Doctors lose money seeing Medicaid patients so about one-third will not accept Medicaid patients. Patients are forced to use emergency rooms for primary care. (At least 50% more frequently than privately insured and even 40% more frequently than the uninsured.) Yet this inferior system is the principal means by which ObamaCare has expanded healthcare insurance coverage.

 

(Next post – Part II – two more methods of measuring how well ObamaCare is working.)

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