ACA enrollment milestone

Midnight was the enrollment deadline, but people who were in process with applications can complete the process through the first two weeks of April. This is a big milestone in the law, but no matter how much everyone wants an instant assessment of the ACA as “working great” or “sucking” that answer is not forthcoming based on how many signed up. I will, however, go out on a limb and predict the answer is somewhere between “working great” and “sucking”.

Here is what I will look for over the next 6 months:

  • What happened to the rate of uninsurance? There is a RAND study that sounds like quite a comprehensive look at this question, but the details aren’t public. Coverage of the leak of the study is essentially a Rohrshach test for what you already thought. It seems likely that the uninsured rate has gone down, probably by quite a lot in historical terms, but likely not by as much as CBO projected it would in year 1. Some of this is related to explicit decisions by States, and other aspects are not. Note that the leak says the rate of uninsured for those age 18-64 fell from 20.9% last fall to 16.6% as of March 22. I would have to read the details of how the survey/study was done to really be able to say for sure what I think of it. Note that when Gallup polls, they include persons covered by Medicare, so they have uninsured as 18% in the last quarter of 2013, falling to 15.9% through February 2014.
  • Many are now realizing that there will never be a static number of people “signed up” just as there has never been a static number of people signed up for employer sponsored coverage (or the prior individual market). People get born, die, divorced, lose their job, become eligible for Medicaid, become uneligible for Medicaid, leave their job voluntarily, stop paying for coverage and so on. Monitoring rates of all these things is important, but they do not hold the breathless answer to “working great” v. “sucking” question in and of themselves.
  • Most important question is not how many young/healthy people signed up? It is, who did insurers plan to sign up and whether and how who actually signed up differs? The actual use of health care, as compared to what was assumed in setting premiums that were offered, is the key to what the premiums will be next year. And the answer to this will almost certainly differ by state, as well as by insurer within a state. We will have a sense of this when the premiums come out for year 2.

As always, the most important thing in public policy is the answer to the question: as compared to what? When people invariably ask me ‘does Obamacare suck or is it working great?’ I always ask them, as compared to what? They look at me like I have 3 heads, but I don’t know how else to even begin to provide them with an answer.

cross posted at freeforall

Author: Don Taylor

Don Taylor is an Associate Professor of Public Policy at Duke University, where his teaching and research focuses on health policy, with a focus on Medicare generally, and on hospice and palliative care, specifically. He increasingly works at the intersection of health policy and the federal budget. Past research topics have included health workforce and the economics of smoking. He began blogging in June 2009 and wrote columns on health reform for the Raleigh, (N.C.) News and Observer. He blogged at The Incidental Economist from March 2011 to March 2012. He is the author of a book, Balancing the Budget is a Progressive Priority that will be published by Springer in May 2012.

8 thoughts on “ACA enrollment milestone”

  1. The reactionaries are making a curious attempt to portray the upgrading of cover, for those previously insured with non-compliant policies, as "not counting." In terms of the aims of ACA, it's a metric of success along with reductions in the uninsured.

    There will still be 30m uninsured people in the USA in 2020 according to the CBO. The Democrats will have an interesting choice in 2016: to stand pat and defend this great but partial achievement; or to push forward with a progressive agenda and lay the ground for a second-wave expansion, perhaps with a public option or early Medicare. Pace Don, it is for now a Broderist waste of time for Democrats to triangulate with reforms designed to appeal to the rational conservatives in hiding somewhere. I hope somebody runs against Hillary from the left, if only to get a debate going on this (as well as on climate disruption), as happened in the 2008 primaries.

  2. I think the biggest issue is going to be the quality of the insurance people are getting. The big weakness of Obamacare is that it relies on for-profit insurance companies to provide the insurance (their incentive is to pay as few claims as possible so that they make more money) and state regulators to ensure that they do (and state regulators tend to be captured by insurance companies).

    There hasn't been a ton of coverage on this issue, but here's a hint of the sort of issues that could come down the pike:
    http://www.motherjones.com/kevin-drum/2014/03/nar

    (Essentially, in order to ensure they can offer low priced policies and still make a profit, insurance companies define their "networks" so narrowly and narrow the exception for out of network emergency care such that consumers end up with huge out of network bills for care they thought was covered.)

    In other words, the issue isn't how many people purchase insurance, it's how useful the insurance turns out to be.

    1. Like a lot of other things in health care, I put this at least as much on the health care providers as I do the insurance companies. If they're going to participate in a narrow network, it's on them to know which labs to send work to to keep it in their customers' networks.

    2. The big weakness of Obamacare is that it relies on for-profit insurance companies to provide the insurance (their incentive is to pay as few claims as possible so that they make more money)

      I invite you to learn a bit more about the ACA before you proclaim its flaws. I'm no fan of the medical insurance industry, but – like the people who drafted the ACA – I'm not an utter fool, either. The term of art you should read up on is "medical loss ratio"

      Narrow networks are more of an issue, indeed a serious one – but problems with in-network versus out-of-network care are not a strange new land for consumers of health care in this country.

      1. But…

        The Medical Loss Ratio under the ACA is a minimum of 80%. The comparable figure for Medicare is in excess of 95%. Therein lies the problem of the ACA. I agree that it's better than what we had before, but it's sub-optimal.

        1. It is certainly true that the insurance industry has far higher administrative overheads (including marketing, etcetera) than does Medicare or Medicaid. But what Steve Stone said was that insurance companies will authorize ever-fewer claims in order to make ever-more money; under the ACA, they cannot do this. They cannot boost their profits by reducing "medical losses".

          Indeed, it's arguably the opposite: the insurance companies have an incentive to spend more on medical care, so long as they can jack up the premium to cover the outgoing, because the more they spend the more they can pocket: at most, they can pocket 1/4 of what they spend on medical care, less actual administrative costs, so they have a reason to spend more on care.

      2. No kidding. I just had reason to check my employer provided insurance for some potential medical issues. There are preferred providers, participating providers and non-participating providers. They have an online database of providers but you have to look around to figure out whether this is a preferred list or a participating list. It doesn’t say in the listings themselves. Of course, there are also the disclaimers that the list may not be completely up to date. The chart of covered services contradicts the narrative elsewhere as to the covered or not covered status of two different procedures–and I was only looking up three.

        This is a big insurer with many providers and good benefits at reasonable cost. Their documentation and approval process are more accessible than most, in my experience. It still takes hours to make sure you aren’t going to get socked with an unexpectedly large charge for anything of significance.

      3. The medical loss ratio relies on state insurance commissioners to enforce it. Time will tell if state regulators, who tend to be in the pocket of the insurance companies, actually enforce it.

        In any event, the narrow networks are worse in Obamacare because the mandate requires that people buy insurance. It's one thing if you are allowed to opt out of narrow network coverage, as was previously true. But under the current system, everyone is required to buy insurance, they are being led to believe (based on Obama Administration rhetoric) that they are covered, when in fact, they have phantom coverage because if they don't act with superhuman caution they will end up going out of network and on the hook for huge charges.

        Further, because of Obamacare's cost controls, we are seeing more narrow networks than before and the networks will likely get narrower in the future. It's the only way for insurance companies to make a profit if they obey the loss ratios that you seem to think they will.

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