The ACA: Still Falling Short
A realistic assessment of Obamacare shows it is not delivering what was promised.


James C. Capretta

The Obamacare open-enrollment season (supposedly) closed yesterday, so it is good time to step back and assess where things stand with the law and its first-year implementation.

Interestingly, Obamacare remains something of a Rorschach test for journalists and health-policy analysts. Looking at the same set of facts, two observers can reach very different conclusions.

For instance, Noam Levey of the Los Angeles Times writes that Obamacare “has spurred the largest expansion in health coverage in America in half a century.”

Meanwhile, health consultant Howard J. Peterson, writing at the Philadelphia Inquirer news site, says “the first four years of Obamacare has led to solving about 10 percent of the problem of uninsured citizens.” He expects no further improvement in the coming years.

So which is it? Is Obamacare on track to be a historic achievement? Or is it falling well short of the lofty goals set for it by the administration?

The Obamacare exchanges reportedly will have enrolled at least 7 million persons in health insurance plans through the end of March. As the Obama administration predicted, there was a large increase in sign-ups in the final days of the open-enrollment period, pushing the total enrollment numbers up even beyond the 6 million estimate touted by the president just last week.

This is without question good news for the law’s supporters and a significant turnaround since last November. After the first two months of shaky enrollment numbers, I expected the first year sign-up totals to be far short of projections. I was clearly wrong about that.

Administration officials realized when the fiasco was unfolding last fall that nothing mattered in the first year except getting people on the program — and so they did whatever was necessary to to make signing up easy. Those fixes are likely to lead to a large percentage of erroneous subsidy payments, as controls and other checks were turned off. That’s clearly a price the administration will gladly pay to get more people onto the program.

Seven million is also an overstatement of true enrollment in the insurance plans. About 20 percent or so of the enrollees have failed, or will fail, to continue payment of their required premiums, according to insurance-industry observers. So 7 million sign-ups translates into a little less than 6 million people who are expected to receive coverage.

And who are these enrollees? Remember, Obamacare forced the cancellation of many millions of insurance plans sold in the individual insurance market. The president later indicated that these plans could be reopened, but only in states with insurance regulators willing to go along with the president’s last minute change of heart. Some number of people with canceled plans likely ended up in the exchanges because they had no other real choice. Thus, several surveys have unsurprisingly shown that a relatively small percentage — perhaps one-third or lower — of the enrollees in the exchanges were previously uninsured. That implies that, so far, enrollment in the exchanges has reduced the ranks of the uninsured by about 2 million people.

It is also clear at this point that there are large state-by-state differences in enrollment experience. In states with activist governments pushing hard for enrollment, such as California and New York, the enrollment numbers are relatively high. But in large parts of the country, the numbers are far lower. For instance, at the end of February, enrollment in the California exchange had reached 2.3 percent of the state population. Meanwhile, in West Virginia, it was just 0.6 percent, and in Oklahoma it was just 0.9 percent. The numbers will obviously go up with March added to the enrollment totals, but the state disparities are unlikely to disappear entirely.

Each state is its own insurance market, whether it uses the federal exchange system or not. These state differences could mean that the Obamacare exchanges are viable in some states and regions of the country, while in other states and regions the numbers remain too low to sustain a stable insurance pool.


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