The second open enrollment of ObamaCare ended on February 15th. According to HHS Secretary Burwell everything is going great. President Obama goes so far to say, “The Affordable Care Act is working. It’s working a little better than we expected.”
Last post I quoted the work of Chris Conover to show how Obama’s broken promises contradict his narrative that the law is working. Today I will refer to the work of insurance industry analyst Robert Laszewski to compare the enrollment numbers with actual expectations
In November, I quoted Laszewski’s predictions for the second open enrollment period in ObamaCare Open Enrollment 2.0. Laszewski warned then that enrollment numbers could not be trusted for at least 90 days after the end of enrollment. That’s because the insurance industry cannot drop the policies of previous policyholders for 90 days even after they fail to make a payment. The result will be many duplications when counting new enrollment.
With the close of the second open enrollment, the White House is claiming 11.4 million people signed up for ObamaCare. Laszewski says the actual number will drop to about 10.5 million based upon his conversations with the insurance industry. But even if he concedes as many as 11 million enrolled, would that exceed expectations?
Table 1 shows the Congressional Budget Office (CBO) projections for enrollment in May 2013. (click on table to enlarge) These projections were decreased from earlier projections and intended to portray a more accurate representation of expectations.
The table may seem confusing but the message is that the CBO estimated in 2013 that there would be an average of 13 million people in the insurance exchanges during 2015. Recalling the first open enrollment that ended April 1, 2014, the White House claimed 7.1 million enrolled, then 8 million, but eventually conceded that number dropped to 6.7 million by the end of 2014. A similar attrition would take an 11 million enrollment to about 9 million by the end of 2015. The HHS own 2015 estimate is for 9.1 million.
Next, remember the CBOs original enrollment projection for 2016 was 22 million. So, at the end of 2014 they had 6.7 million, at the end of 2015 they will likely have 9 million. Is 22 million a realistic number for 2016?
Why This Matters
Perhaps you’re thinking this is “much ado about nothing.” Why do all these numbers matter?
The primary purpose of the Affordable Care Act was to insure the uninsured. President Obama famously claimed in 2007 he would “cover every American” with health insurance. But the CBO, which has missed its projections every time so far, still projects 31 million Americans will be uninsured by 2016. If their projections continue to be overly optimistic, as they have been in the past, the number of uninsured by 2016 may approach 40 million. This is only slightly less than the number of uninsured before the law was passed!
It also matters because rising numbers of uninsured create political pressure to do something better. It matters financially because uninsured people raise the cost of insurance premiums for those who actually pay for them. That means premium prices go up for everyone.
Lastly, Laszewski warns us that the “back room” of Healthcare.gov is still not completely built. That means the web site can’t pay the insurance companies. Insurers are still getting paid based upon a workaround that involves them manually filing out worksheets – for 7 million people.
Healthcare.gov also can’t reconcile the cost sharing subsidies the lowest income people get from ObamaCare – like lower deductibles and co-pays. This increases the inaccuracy of the enrollment numbers. Laszewski reports one insurance carrier told him they only ended up with half of the net January enrollments the web site originally reported to them.
President Obama claims, “It’s working a little better than expected.” Does this really meet his expectations?