Number of Obamacare sign-ups is greatly inflated
By Byron York | FEBRUARY 6, 2014 AT 6:36 PM
Democrats from President Obama on down have been touting Obamacare's sign-up numbers. Even after the system's disastrous rollout, they like to point out, roughly three million people have signed up for private insurance, while 6.3 million have signed up for Medicaid.
"Already, because of the Affordable Care Act, more than nine million Americans have signed up for private health insurance or Medicaid coverage," Obama said in the State of the Union speech. "Nine million."
The number is a little larger now, since the figures are a few weeks old. But there is strong new evidence to suggest the administration's claims are grossly exaggerated and deeply misleading. Obamacare is not doing nearly as well as the president wants you to believe.
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First, Medicaid. This week, the health consulting firm Avalere found that only 1 to 2 million of the 6.3 million who signed up for Medicaid were new enrollees brought into the program by Obamacare. The rest were people who were eligible and would have signed up for Medicaid irrespective of Obamacare, in addition to people who were already on Medicaid but were renewing their status. (The researchers reached their conclusion by comparing the Obamacare sign-ups with a recent period before the new health law went into effect.)
If the Avalere report is accurate — and experts are taking it seriously — then less than one-third, and perhaps less than one-quarter, of the new Medicaid sign-ups cited by the administration were previously uninsured people gaining coverage because of Obamacare. That's a major shortfall.
The numbers are important not only for policy, but for politics. In recent months, as the failures of the Obamacare website left the administration reeling and its supporters disheartened, Democrats often pointed to the number of Medicaid sign-ups as an example — the only example — of a shining success for Obamacare. Now that success looks a lot less shiny.
"It's a surprise because of all the outreach and the fact that Medicaid is free — there is no premium paid by individuals," said health care analyst Bob Laszewski. "This really is perplexing — they can't give it away!"
Then there are the roughly three million people said to have signed up for private insurance. In mid-January, the Wall Street Journal reported that a relatively small percentage of the new sign-ups were previously uninsured Americans gaining coverage through Obamacare. The rest were people who were covered and lost that coverage in the market disruptions largely caused by Obamacare.
A McKinsey and Co. survey cited by the Journal found that just 11 percent of private insurance signups were people who previously had no coverage. Other surveys found that about one-quarter of new sign-ups were previously uninsured.
Whatever the precise number, it appears that a large majority of the activity in Obamacare private coverage sign-ups is essentially a churn operation: The system throws people out of their coverage, and then those people come to the system to sign up for new coverage, and that is reported as a gain for Obamacare.
Put the two together — Medicaid and private insurance — and it's clear the response of the nation's uninsured to Obamacare has been far less enthusiastic than the administration claims. Which means that the Affordable Care Act has gotten off to a terrible start at its core mission, insuring the uninsured.
The Congressional Budget Office has estimated there are 57 million uninsured people in the United States. Even if Obamacare worked perfectly, an estimated 31 million would remain uninsured when the law is fully in effect. And if Obamacare continues to sputter and fail as it has so far, that number of still-uninsured could be much higher. Was it worth roiling the nation's health care system to achieve such lackluster results?
It's still possible Obamacare will catch on. But if the predictions of several health care experts are right, it will likely cause still more dislocation later this year in the small-group market, which has more people in it than the individual market that was cast into chaos late last year. More people will have their coverage cancelled, forcing them into the still-troubled federal exchange. And when they buy coverage to replace what they had, the administration will claim more success for Obamacare. Meanwhile, the White House will continue to point to inflated Medicaid numbers as even more evidence of success.
Put aside the political debate: Something is essentially wrong with Obamacare.