Less than one-third of ObamaCare exchange enrollees previously uninsured

January 21 2014

As few as 11 percent of those purchasing new health insurance policies and believed to be eligible for coverage in the ObamaCare health insurance exchanges were previously uninsured, according to a recent survey by McKinsey & Co. In other words, the Affordable Care Act, or ACA, which was supposed to reduce the uninsured by almost half through Medicaid expansion and subsidizing private coverage is – at best – barely making a dent in providing accessible and affordable coverage to the vast majority of the nation’s uninsured population.

Other preliminary surveys estimate that between one-quarter and one-third of the newly insured were previously uninsured. The bottom line is that many of those purchasing coverage on the ObamaCare exchanges were likely thrown into ObamaCare as a direct result of the new law, which canceled millions of private health insurance policies.

The ObamaCare enrollment numbers have been nothing short of disastrous. Not only is the nation woefully short of the end-of-year enrollment target of 3.3 million, but the reported numbers are not actual enrollments. The federal government is reporting the number of 2.1 million shoppers that have “selected” plans, which is the equivalent of placing a plan in one’s shopping cart but not necessarily purchasing it.

But even if you assume the government’s reported numbers are true, the impact of ObamaCare on the nation’s uninsured has been small and accounts for less than an 8 percent reduction in the number of previously uninsured (See Figure 1). Upon closer scrutiny, however, the numbers are likely far worse. In fact, it is possible that ObamaCare has reduced the number of uninsured by fewer than 500,000 or about 1 percent of previously uninsured nationally, to date.

ObamaCare-Rolling-Failure--Graph-1

Source: Author’s calculations based on U.S. Census Bureau, Current Population Survey, 2013 Annual Social and Economic Supplement, Table HI01 and U.S. Department of Health and Human Services, “Health Insurance Marketplace: January Enrollment Report,” ASPE Issue Brief, January 13, 2014 

Look at the impact of ObamaCare on the uninsured in Illinois. Using the administration’s enrollment numbers, ObamaCare has expanded coverage to 8 percent of the state’s previously uninsured population (See Figure 2). This provides the most optimistic scenario.

ObamaCare-Rolling-Failure--Graph-2

Source: Author’s calculations based on U.S. Census Bureau, Current Population Survey, 2013 Annual Social and Economic Supplement, Table HI05 and U.S. Department of Health and Human Services, “Health Insurance Marketplace: January Enrollment Report,” ASPE Issue Brief, January 13, 2014 

Now let’s assume that one-third (which is the most generous of the above-mentioned estimates) of the ObamaCare enrollments (which is counted as those who have selected a plan, but have not necessarily paid for one) were previously uninsured. That means that about 20,000 of the reported 61,000 ObamaCare health exchange enrollment through the end of 2013 in Illinois were previously uninsured.

The federal government is reporting that about 82,000 people in Illinois signed up for Medicaid since the ACA (under the Illinois Medicaid expansion) went into effect. What they don’t tell you is that they are including individuals who would have already been previously eligible before state lawmakers opted to expand the Medicaid program in the state. In other words, they are counting the regular pre-ACA Medicaid population. That is why it is likely that only up to 10 percent  of the new Medicaid enrolleees are those who are newly eligible as a result of the new law.

Furthermore, states, such as Illinois, that expanded coverage under the ACA to childless adults are likely seeing many of the previously insured drop their private coverage to enroll in Medicaid. Substituting Medicaid for their private coverage, there will likely be little overall reduction in the number of uninsured.

In short, the ACA has barely reduced the number of the uninsured in Illinois. ObamaCare likely accounts for less than a 2 percent reduction in our state’s previously uninsured population. In other words, more than 98 percent of the previously insured in Illinois will likely remain so (See Figure 3). If we had additional data on how many of the 185,000 policies canceled by ObamaCare in Illinois were not renewed, we might find an even smaller reduction in the state’s uninsured population.

ObamaCare-Rolling-Failure--Graph-3

Source: Author’s calculations based on U.S. Census Bureau, Current Population Survey, 2013 Annual Social and Economic Supplement, Table HI05 and U.S. Department of Health and Human Services, “Health Insurance Marketplace: January Enrollment Report,” ASPE Issue Brief, January 13, 2014

And while we do expect additional enrollments between now and the end of March, there is little reason to believe that ObamaCare is going to deliver health care access and affordability for the vast majority of Illinoisans. In fact, it is – and will continue – doing the opposite.

One of the most important precepts in medical ethics is: “First, do no harm.” Too bad many of our lawmakers in Washington D.C. and Springfield feel little to no constraint in following that advice when it comes to health policy.

TAGS: ACA, Affordable Care Act, insurance exchange, insured, medicaid, Obamacare, uninsured