On Sunday, the Obama administration announced that a total of 1.1 million Americans have signed up for health insurance coverage on Obamacare’s federally-run exchange at Healthcare.gov. While that number falls well short of the administration’s previous expectations of 3.3 million, it is a big step up; as of the end of November, only 137,204 individuals had “selected a marketplace plan.” But the Centers for Medicare and Medicaid Services continue to conceal critical data regarding actual enrollment in the exchanges—data that will tell us whether or not Obamacare’s insurance marketplaces will ever end up functioning as they were intended.
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‘Sign-Ups’ ≠ Enrollments
First off, CMS won’t tell us how many people have actually enrolled in exchange-based coverage. As a reminder, you aren’t actually enrolled in a health plan unless the insurer has received your premium payment for the first month of coverage. Previously, we heard that only around 5 to 15 percent of SAMPs—people who have “selected a marketplace plan,” in CMS lingo—had actually enrolled in coverage.
In addition, in November, one of CMS’ top IT officials, Henry Chao, testified before Congress that the administration has yet to build the system needed to pay the insurers.
Healthy vs. unhealthy enrollments
The most important thing CMS won’t tell us is the proportion of healthy people, as opposed to sick people, who are signing up for exchange-based coverage. If too many sick people sign up, and not enough healthy people, the average health spend per enrollee will increase, leading to higher premiums that are increasingly unaffordable for average Americans.
Some Obamacare enthusiasts argue that this problem doesn’t matter, because the poor will be protected from rate hikes by taxpayer-funded subsidies. But over time, the subsidies will not be able to keep pace, if healthy people drop out and only sick people by Obamacare-based insurance plans.
And make no mistake: on average, sicker and older people will fare far better under Obamacare than healthy people will. According to an analysis I conducted with colleagues at the Manhattan Institute, older, sicker individuals will benefit most from Obamacare’s exchange subsidies. On the other hand, in many parts of the country, healthier Americans—especially younger ones—will see their premiums double or triple under the law.
Congress should subpoena the enrollment data
If CMS won’t provide this information, on the mix of patients enrolling in Obamacare’s exchanges, Congress should subpoena it. Congress could also get the data directly from insurers like Aetna and Humana that are participating in the exchanges.
What we need to know is: What is the breakdown of enrollees by age? What percentage have chronic conditions like Type 2 diabetes, high cholesterol, and high blood pressure? This is the kind of data that can help us compare the pool of enrollees in the exchanges to the normal U.S. population.
It’s almost certain that, so far, this enrollment data is not encouraging. Because if it was encouraging, CMS would have released it.
Not a lot of time left
Unless CMS changes its mind, for the umpteenth time, the 2014 deadline for purchasing an Obamacare insurance plan is March 31. Within weeks of that deadline, insurers are going to have to start filing their proposed premiums for the 2015 plan year.
If their experience in 2014 is poor, we might see a second round of rate shock. Only this time, it won’t have been caused by Obamacare’s costly changes to the design of the insurance plan, but by the fact that the law incentivized healthy people to drop out of the market.
It’s good news that the administration has improved the ability of Americans to sign up for coverage on Healthcare.gov. But if you ever want to know the real story with Obamacare, you have to pay attention to what the administration isn’t telling you.
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INVESTORS’ NOTE: The biggest publicly-traded players in Obamacare’s health insurance exchanges are Aetna (NYSE:AET), Humana (NYSE:HUM), Cigna (NYSE:CI), Molina (NYSE:MOH), WellPoint (NYSE:WLP), and Centene (NYSE:CNC), in order of the number of uninsured exchange-eligible Americans for whom their plans are available.