Obamacare Update: Lots of Unanswered Questions

The Fiscal Times
Obamacare OK’s Fake Accounts and Fake Promises
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Obamacare OK’s Fake Accounts and Fake Promises

Now that the final numbers are out for Obamacare’s first enrollment period, we have a better idea of how the new insurance marketplaces are shaping up, as well as what questions still need to be answered in order to evaluate the law.

First, we know that more than 8 million people signed up for health insurance on the state and federal exchanges between October and April 15—87 percent of whom were previously uninsured, Business Insider noted.

Related: A Little Known Glitch Could Derail Obamacare

This number is significant primarily because it shows demand for the new plans. However, it does not represent how many people will actually have insurance through the exchanges, since people may drop their plans throughout the year. So-called “churn” is common in the health insurance industry, with people leaving and changing jobs and plans all the time.

The figure also doesn’t account for how many people have paid their premiums. This data point is huge and will need nailed down in order to find out how many people are actually covered by these plans.

The White House has yet to provide this number to the public, which has enraged critics of the law who have accused the administration of inflating Obamacare’s numbers.

Earlier this week, the House Energy and Commerce Committee released data from insurers showing that about 67 percent of enrollees had paid their first month premiums through April 15. The insurers that provided the committee with that data cautioned that the figures were not “final verified numbers,” since they were expecting more payments to come in.

Related: Insurers On Obamacare: Expect Prices to Soar

Insurers had previously estimated about 80 percent of enrollees had paid their premiums—a figure embraced by the administration. Still, it’s unclear when the White House will release an official estimate. On a call to reporters on Thursday, Julie Bataille, communications director for the Centers for Medicare and Medicaid Services, said these numbers won’t be released until “later this year.”

The administration’s numbers also provided a demographic breakdown of its national data, which gives a better idea of who is signing up.

The latest enrollment figures show about 28 percent of all exchange enrollees are between the ages of 18 and 34—a crucial cohort needed in order to stabilize the price of premiums by offsetting the costs of older, sicker people.

This number has been closely watched by insurers who are setting their rates for next year. Though the overall percentage of young people enrolling on the exchanges is significantly lower than the 40 percent benchmark experts said was needed to hold premium prices down, some insurers still say they have a healthy mix and aren’t worried about a so-called death spiral. At least 5 million people signed up for plans off the exchanges, which also count in the risk pool. eHealth estimates about 40 percent of its total enrollees were young people.

Still, the national enrollment data and demographic breakdown tell us very little about how the risk pools will impact the price of premiums next year. While some insurers previously estimated they would have to significantly raise their rates—some as high as 300 percent, others said there will likely be only a modest and expected increase.

That all depends on how sign ups align with insurers expectations in each individual market.

“It doesn’t matter that we meet the White House’s goals; it matters that enrollment actually reflects what the insurers were anticipating, and that’s something we don’t know,” Adrianna McIntyre, managing editor of The Incidental Economists said on BloggingHeads.

Rates will also depend on the size of the market. An earlier analysis from Kaiser Health News revealed that the price of premiums in some regions like Southern Georgia, which has one hospital system dominating the entire market, were drastically higher than those in regions with multiple systems that could compete to drive down prices.

This story was updated on Monday at 12:17 p.m. to reflect that 87 percent of exchange enrollees were previously uninsured. An earlier version of this story said 85 percent had previously lacked insurance.

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