The White House obfuscates when it comes to Obamacare enrollment results.
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But some of the individual states that have set up their own on-line exchanges (and sidestepped the troubled healthcare.gov) have been forthcoming.
Enrollment in these states is outpacing healthcare.gov. So it’s a good bet that these state experiences are a proxy of what’s happening market wide.
And the individual state numbers look awful.
The entire scheme was predicated on enticing enough young, healthy consumers to sign up for insurance to subsidize the cost of the older Americans, and those with pre-existing health conditions (who were always more likely to enroll).
The state exchanges are badly missing these demographic marks.
The newest data comes from six states that have provided the most transparency around their enrollment figures. Totaled together, it shows that, on average, 54% of those purchasing plans were between the ages of 45 and 64. These states are California, Colorado, Connecticut, Minnesota, Rhode Island, and Washington State.
Consumers are also paying up for “silver” plans by a wide margin (55% of enrollees, on average, have bought “silver” coverage). This makes them eligible for increased cost-sharing subsidies that will reduce out of pocket costs (assuming they are below 250% of the federal poverty level — about $60,000 in annual income for a family of 4, or $30,000 for an individual).
At this income level, special subsidies kick in.
Selecting a costlier silver plan (rather than the cheapest, bronze plans) is a smart choice if a consumer plans to actually tap their health coverage. The cost–sharing subsidies made available only in the silver plans help reduce deductibles, copays, and co-insurance (giving consumer a richer and less costly set of benefits).
The heavy migration to “silver” plans is another indication that the people signing up for Obamacare are a sicker group. Younger, healthier beneficiaries were always expected to be far more likely to choose the cheapest bronze plans.
These numbers were further analyzed in an excellent report published yesterday by the managed care equity analysts at investment bank Morgan Stanley.
Among the states, Colorado and Washington State had the lowest percentage of enrollments in the key 18-34 demographic, at just 18% of the 23,000 people who have signed up in an Obamacare health plan in Colorado (through December 14th) and 20,000 who have signed up in Washington State (through November 30th).
In California, those between 18-34 accounted for 21% of enrollees (through December 7th). In Rhode Island, that figure was 20% and in Minnesota, 23%.
Very few people are signing up for the cheapest, catastrophic plans that are being marketed to the so-called “young invincibles.”
These plans were created with the sole purpose of luring health, young consumers into Obamacare. (These are the plans that the Whit House just offered to extend to people who were kicked off of their individual insurance policies as a result of the Obamacare mandates).
In California, just 1% of enrollees chose these plans, in Connecticut 2%, and Rhode Island 1%. For the other states, there were too few enrollees to get to 1%.
Most consumers who have signed up – about 85% on average — are eligible for subsidies because they fall below 400% of the Federal Poverty Level (about $90,000 in annual income for a family of four). And most of these folks are choosing silver plans.
Even more revealing are the choices being made by consumers who don’t qualify for subsidies. Almost 40% of these folks are selecting gold and platinum plans. Without the benefit of government subsidies, these plans are very pricey.
So who would be willing to pay up for this coverage?
Some are undoubtedly upper middle class and wealthy consumers who were thrown off their prior coverage once insurers cancelled their existing health plans in the individual market. They want the costlier coverage because, while the networks and formularies don’t improve over cheaper plans, the co-insurance often does.
But a healthy fraction of this cohort who are buying up to Gold are undoubtedly middle class folks who are paying more for better coverage because they have medical conditions, and know that they will need to access the healthcare services.
If you plan to consume a lot of healthcare, it makes sense to buy a platinum plan. That way, through the co-insurance that some of these plans offer, you can offload a bigger chunk of your medical costs as possible onto the government.
The bulk of those signing up for Obamacare will get some form of federal subsidies.
But among those who don’t qualify for subsidies, only 30% have selected the cheap bronze plans. These are likely the younger, healthier consumers that Obamacare needs in order to make its math work. And the scheme isn’t attracting these folks.
Finally, looking at the top line numbers, things don’t get much better.
In California, just 47% of those who have signed up have received a private health plan. The rest were put on Medicaid. (And remember, these figures only include those who have signed up, but not necessarily paid their first premium).
The figures for the rest of the states aren’t any better. In Colorado, just 17% got private coverage, with the other 83% put on Medicaid. In Connecticut, 61% got private coverage, in Minnesota, 71%, Rhode Island 33%, and Washington State 11%.
The weighted average across all the states shows that only 36% of those who have signed up (but not necessarily paid for) Obamacare, were put on private plans.
The rest have been added to the rolls of Medicaid.
When it comes to the data on Obamacare enrollment, the White House has been cooking their numbers. They are anxious to find the nuggets that can paint a pretty portrait. But the totality of the data doesn’t’ lie.
The top line trends are terrible. But it’s the demographic trends, buried in the Obamacare numbers, which should cause the administration the most concern.
These trends will inevitably impact Obamacare in 2014.
But the effects will spill into 2015, as health plans set their rates based on their initial experience.
The bad start makes it more likely this entire scheme remains a niche market to service a mostly older, sicker, and less wealthy demographic.
The insurers are calling the underlying health plans “Medicaid Plus.” The Wall Street Journal called it “Obamacaid.”
One of these maxims may soon stick.
You can follow Dr. Scott Gottlieb on Twitter @ScottGottliebMD
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