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137,000 People Have Selected Plans on HealthCare.gov, Most of Them Can’t Get Subsidies



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Just before Secretary Sebelius testified before Congress this morning, HHS released its Obamacare enrollment numbers for November, and they’re better, but not great: 137,000 people have picked plans on the federal exchange, and 264,000 people have picked plans on the state-run exchanges, for a total of 364,000 enrollees, up from 106,000 in October. All of these customers picked their plans (which HHS defines as an enrollment; one doesn’t have to have committed to buy the plan or paid for it) before the apparently significant upgrades made to the federal-exchange website on December 1, after which the site’s traffic and capacity jumped noticeably.

At the beginning of November, CMS official Marilyn Tavenner said HHS’s goal was to have 800,000 enrollments by the end of the month, so they’re certainly well behind pace. Overall, the federal government expected 7 million people to enroll in the exchanges. Though that number isn’t necessary to make the exchanges work properly (avoid being composed of mostly sick and older people, etc.), more enrollments are obviously better, since each additional customer convinced to sign up is probably healthier and younger. November saw almost twice as many enrollments as October, allowing HHS to produce the mildly encouraging chart below, but the numbers of federal enrollments — whether because of lack of interest, the website’s issues, or because people won’t bother until the last minute — remain basically insignificant.

Approximately 800,000 people were determined eligible for Medicaid, as well, meaning that, technology issues notwithstanding, they’ll be added to the program in January.

About one-fourth of the people who have entered their income information on their applications were deemed eligible for subsidies on the exchanges (about 900,000 out of about 2.3 million [see update below]), which is lower than the number we saw in October alone and remains really far from what was projected. The CBO projected that just 1 million out of the 7 million people to enroll in the exchanges in the first year would be ineligible for subsidies, so the ratio is way off from what was expected (15–75 vs. 60–40 [see update below]). I had some thoughts on that surprising fact a month ago, and I’ll add a couple now: Unsubsidized customers (basically, those above the national median income) are generally savvier and more likely to have the resources to enroll and make their payments ahead of time, so maybe this is understandable and doesn’t say anything about who will eventually enroll. On the other hand, it may demonstrate that the people to whom insurance was supposed to be expanded — the uninsured, who tend to be low-income and not well educated — aren’t getting to the exchanges at all, and covering them will be a much longer term project.

Perhaps more worrisome, Charles Ornstein of ProPublica reports that very few of the people who’ve enrolled with insurers have paid up – two consultants he talked to said clients have seen 5 to 15 percent of enrollees pay for their plans so far. Note that this “slippage” (between the transmitting of data to insurers and paying for the plan) is happening with people who’ve actually had their choice of plan sent to the insurers, a subset of the 364,000 “enrollments,” and not the same thing as another risk with the progress so far. People just have to have selected a plan — it can be in their “shopping cart” — and don’t have to have committed to buy it or transferred their information to the insurers to count as an enrollee, and plenty of them, also, may not pay for plans eventually.

It still sounds pretty bad, and suggests some people may be deciding to remain uninsured or to drop coverage because it’s gone up too much in price, but there are innocent explanations for it, too: People of modest means don’t have any reason to pony up several hundred dollars in November to pay their January insurance premium if it can be paid on December 23, and especially if they have an existing health-insurance bill to pay that month. Most customers have to make their first premium payment by December 23 for their coverage to begin January 1. Insurers would normally set that date around December 15, but the Obama administration pushed it back to December 23 — and some state exchanges told Ornstein that they have pushed it back even further (it’s January 6 in California).

People can still enroll after the deadline, of course — they can sign up for a plan until March 31 — but it looks like the millions of Americans who’ve seen their insurance policies canceled this fall may not have coverage January 1. That said, not all individual insurance plans begin and end January 1, and some of the cancellees likely will re-enroll in the coverage offered to them by the companies that just terminated their existing plan. That kind of “churn” happens every year in the individual market as insurers change up their plans. But this year, it will be a much more expensive experience for many people, because of the cost of the ACA’s new insurance regulations, meaning they may go uninsured — either until they can get a cheaper or subsidized exchange plan, or for the entire year.

UPDATE: Ross Douthat points out a stupid mistake I made in calculating the share of exchange applications eligible for subsidies: It’s 900,000 people out of 2.3 million, not out of 3.6 million, meaning 40 percent of them are eligible for subsidies, not 25 percent (the 3.6 million number I used as the denominator includes people who turned out to be eligible for Medicaid, who can’t buy exchange insurance). This is still striking versus the CBO’s expectation that the vast majority of enrollees in the exchanges will be subsidized. Of course, completed applications are not enrollees — and that’s an important distinction. Ross has some more thoughts on the matter worth reading.



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