Obamacare’s Enrollment Cliff

by Patrick Brennan
At some point, the White House has to admit its enrollment numbers are inflated.

‘We may not get to 7 million, but if we get to 5 or 6 million that’s a hell of a start,” Vice President Joe Biden said Wednesday when asked about whether enrollments in the Affordable Care Act’s exchanges would hit the White House’s goal of 7 million by the end of March.

But Biden’s windy expectations management may not be enough to prepare the country for Obamacare’s disappointing enrollment numbers.

A politically toxic “Obamacare enrollment crash,” National Journal argues, will become clear once the White House’s count of “enrollments” is adjusted to consider how many people have actually enrolled in private health insurance plans — a number that will be significantly lower than the White House has been claiming.

The Department of Health and Human Services (HHS) said that by the end of January, 3.3 million people had signed up for private plans on state and federal health-insurance exchanges — when the White House had hoped for 7 million by the end of March.

But that 3.3 million number counts people who have entered their information, seen what options they have, and selected a plan. They don’t have to have committed to buy it or paid their first premium to insurance companies.

How many of the 3.3 million “enrollees” have done that? Somewhere between 70 and 80 percent, probably. California says 75 percent of its 828,000 enrollees have paid their premiums. The federal government has promised it will release data soon about enrollees through the federal exchange, which is used in 34 states.

That would mean the exchanges have seen about 2.5 million actual enrollments, not 3.3 million. The exchanges beat their January enrollment target, but in terms of fake or real enrollments, HHS is far off the projections it made last fall, which had 4.4 million enrollees — as in 4.4 million people who’d paid their premiums — by the end of January.

Is there any way to avoid cable-news chyrons about the “Obamacare crash”?​ The admission of how many people have actually gotten shiny new insurance cards out of the ACA certainly can’t be put off until November.​ One possibility: If they think they’ll get a surge in enrollments in March (HHS didn’t project one), they can announce the final tally of paid enrollments and it might not be lower than the number of broadly defined enrollments that they’ll announce toward the end of February. Barring a boost like that, presumably the White House finds some way to downplay the disconnect, but the admission should still provide some political fodder for Republicans.

The White House says it planned to report these unpaid “enrollment” figures all along, before the program’s disastrous rollout, because it would be too difficult to get payment data from insurers in a timely manner. But at least publicly, it’s created a real disconnect between the number of people they’ll eventually have to admit have gained insurance on the exchanges, and the number they set out as an unofficial goal for the end of open enrollment, in March: 7 million paid enrollees.

That was more optimistic than the Congressional Budget Office had projected. The nonpartisan body thought that 7 million Americans would gain insurance from the exchanges by December 2014. Most people won’t be eligible to buy an exchange plan after open enrollment closes on March 31, but some will: people who lose or leave their jobs, for instance, or turn 26 and have to leave their parents’ plans. (Enrollment for plans beginning January 2015 opens in October, but doesn’t count toward the 7 million.)

Some of the factors depressing enrollment: the massive problems that plagued the federal government’s online exchange and the ones run by several states, the extensions the Obama administration made to more affordable, non-Obamacare-compliant plans, and high premiums.

None of this is likely to doom the law as an actuarial matter. It’s the number and composition of each state’s exchange enrollees that will determine future premiums and insurers’ profits and losses, much more than the total number of enrollments. There are indications of problems with the risk pool: Young-adult enrollment, for instance, is probably not going to hit projections, and some states have been seriously lagging in enrollment. A number of aspects of the law, however — sliding subsidies, for instance, and the risk-corridor and reinsurance programs – should keep premiums from shooting up significantly or insurers from dropping out.

But the enrollment target matters politically, and it matters for the ACA as social policy: The law was supposed to expand insurance coverage and provide affordable, comprehensive insurance via the exchanges. If it misses the Obama administration’s enrollment targets, it can rightly be judged to have failed on an early measure of the latter goal.

It will be a while before we find out how many exchange enrollees had been uninsured or would have become uninsured were it not for the ability to buy an exchange plan — whether, in other words, this part of the law is expanding insurance. For now, we know there can’t be as many of them as the White House makes it seem.

— Patrick Brennan is an associate editor at National Review.