The Early Rushes on the PPACA

by Dave Schuler on March 31, 2014

On the last day of the original open enrollment period Joe Gandelman points to an article in the LA Times that reckons the number of people newly-insured under the PPACA as around 9.5 million:

• At least 6 million people have signed up for health coverage on the new marketplaces, about one-third of whom were previously uninsured.

• A February survey by consulting firm McKinsey & Co. found 27% of new enrollees were previously uninsured, but newer survey data from the nonprofit Rand Corp. and reports from marketplace officials in several states suggest that share increased in March.

• At least 4.5 million previously uninsured adults have signed up for state Medicaid programs, according to Rand’s unpublished survey data, which were shared with The Times. That tracks with estimates from Avalere Health, a consulting firm that is closely following the law’s implementation.

• An additional 3 million young adults have gained coverage in recent years through a provision of the law that enables dependent children to remain on their parents’ health plans until they turn 26, according to national health insurance surveys from the federal Centers for Disease Control and Prevention.

• About 9 million people have bought health plans directly from insurers, instead of using the marketplaces, Rand found. The vast majority of these people were previously insured.

• Fewer than a million people who had health plans in 2013 are now uninsured because their plans were canceled for not meeting new standards set by the law, the Rand survey indicates.

It’s a bit too early to tell but it does not appear that the law has lead to a net increase in those without healthcare insurance, the claims of opponents of the PPACA notwithstanding.

I think the PPACA is a success on its own terms and that’s good. How you grade it depends largely on your political views. There are some who would give it an A and would give it an A regardless of its outcomes. They just like the idea of the PPACA. Some would give it a solid B. There are some who would give it an F regardless of its outcomes. They don’t like the idea of it and like it even less because it happened under Obama’s watch.

I think it deserves a gentleman’s C. As I see it the PPACA will be around for the foreseeable future and will remain largely unchanged but, sadly, is largely a distraction from the major problem which is the high cost of healthcare in the United States. Many, many challenges remain.

How the many court cases challenging various aspects of the PPACA will fare remains unknown. I think the PPACA will survive them but probably not unscathed. Whether the form in which it survives remains actuarially viable is anybody’s guess.

Only a fraction of the uninsured have gained insurance under the PPACA, at most 25%. We don’t know how many of those will remain insured, how many more will be insured, at what cost, or what effects the newly insured will have on costs, availability, or outcomes.

No one knows how many of those newly enrolled in Medicaid qualified under the old rules. The costs of those insureds will be borne completely by the states. The Medicaid expansion is presently funded completely by the federal government but that is scheduled to expire at which time the costs will revert to the states. States like Illinois are already teetering on the brink of insolvency. I don’t know whether Illinois can afford to continue to pay its Medicaid bills which account for the largest single bite out of the state’s budget even in the short term and nobody else does, either.

Whether the healthcare exchanges are actuarially sound is at present unknown. My guess is that some will be sound and some won’t. That’s accounted for in the PPACA for the next three years but what happens after that is anybody’s guess.

Congratulations to the Obama Administration for its completion of the important milestone of the original open enrollment period. It is the end of the beginning.

Update
Marc Thiessen retorts:

The stated goal of Obamacare was not to move millions of privately insured Americans into taxpayer-subsidized health coverage. The goal was to cover the uninsured. That was the justification for all the chaos and disruption Americans have experienced — and that is the standard by which the administration should be judged.

So how is it doing? We don’t know yet, but the signs are not good. A March survey by McKinsey & Co. found that only 27 percent of consumers who had purchased new coverage in the individual insurance market in February were previously uninsured — up from 11 percent in January. But McKinsey also found that the payment rate for the previously uninsured was just 53 percent, compared with 86 percent for the previously insured. We don’t know how many of those policies were purchased through Obamacare, but remember: Those who sign up and do not pay are not actually enrolled.

Goldman Sachs is projecting that only 1 million Obamacare sign-ups will come from previously uninsured Americans. Indeed, it estimates that the number of total signups will be just 4 million — not 6 million, as the administration claims — because “HHS figures . . . count all persons who selected an ACA exchange plan regardless of whether or not they have actually completed the enrollment process by paying their premium.” Goldman Sachs also anticipates that fully 75 percent of all the Obamacare sign-ups will be from people who already had insurance.

He goes on to question the reports of the increased enrollments in Medicaid.

{ 11 comments… read them below or add one }

michael reynolds March 31, 2014 at 11:58 am

The goal of Obamacare was to establish that American citizens have a right to get real health insurance.

What was wrong with the old system? Rescission, non-portability, unrealistic limits, pre-existing conditions, portability, adult children and free riders. Each has now been addressed. Perfectly addressed? No. But now permanently in the USG in-box.

Astoundingly bad roll-out, pathetic sales job, it all doesn’t matter. Because now when you buy health insurance, it’s real health insurance. I hate to think how much money this would have saved me had it come 5 years earlier. At least 20 grand to establish a corporation, pay lawyers, accountants, and finally inflated premiums. All so that I could deal with a system that Republicans seem to think was just hunky-dory.

Dave Schuler March 31, 2014 at 12:50 pm

The goal of Obamacare was to establish that American citizens have a right to get real health insurance.

That may be your goal but what’s your evidence that was the goal of those who enacted it into law? I’d have greater confidence that was the objective if the president or somebody in Congress had actually articulated that as the objective within a year either way of its enactment.

Here’s how the Senate stated the objectives:

The Patient Protection and Affordable Care Act will ensure that all Americans have access to quality, affordable health care and will create the transformation within the health care system necessary to contain costs.

As you can see, the emphasis is on care rather than insurance. You and many others persistently conflate “care” with “insurance”. Even if I accepted that insurance were necessary for care it most definitely is not sufficient and IMO that’s a major problem with the PPACA which, sadly, is not likely to be corrected for the foreseeable future.

The actual form that the real live PPACA has taken is to produce healthcare insurance plans that will be economically disastrous for many of those carrying them. $6,000 deductibles just aren’t affordable for most people.

My interpretation is a bit different. The president desperately wanted something he could reasonably claim as healthcare reform, the Congressional Democrats had been champing at the bit for decades for reform that included some pet buzzwords, e.g. “community rating”, “guarateed issue”, etc., the PPACA was what they cobbled together, and they’ve been casting around for a rationale for it they could actually deliver on ever since.

Also, have you ever heard of the “no true Scotsman” fallacy?

michael reynolds March 31, 2014 at 1:55 pm

A $6,000 deductible is a whole lot more affordable than a $250,000 heart attack when your insurance tops out at 50k. The hospital giving you a quarter million bucks’ worth of medicine doesn’t give a rat’s ass about the $6,000. They’ll carry the 6 grand so they can take the remaining $244,000.

I think the goal was to federalize a persistent problem: lots of Americans either had phony policies or no policies and we had a system that meant illness = bankruptcy. So long as this was not the USGs problem it wasn’t going to be addressed. Once it became the USGs problem it would inevitably be addressed.

I disagree that health insurance does not equal health care. An imperfect connection? Obviously. But the fact is that insurance means you can go see your doctor when you first notice that funny mole and not five years later when it’s untreatable melanoma. It means your hypertension can be treated before it’s a stroke. And it means if you get very sick you don’t lose your home, which makes regular medical care rather more difficult.

For working class people in particular health insurance absolutely equals health care, or at least the possibility of health care. Even if you’re not working class, it’s pretty damned great. I am breathing a huge sigh of relief thanks to Obamacare.

... March 31, 2014 at 3:54 pm

It’s a bit too early to tell but it does not appear that the law has lead to a net increase in those without healthcare insurance, the claims of opponents of the PPACA notwithstanding.

Proponents of the PPACA notwithstanding, that’s a really low fucking bar for measuring success! Wasn’t the goal to get 45 to 50 million uninsured people insurance? It’s funny, but only because I am so cynical and black hearted.

steve March 31, 2014 at 4:57 pm

As has been said many times, a big chunk of those previously “insured” people were actually on mini-med equivalent programs. They pay $2000/year for reduced raters on care, ie they get $6000 worth of care. They werent really insured. If they had a major medical bill, everyone else paid for it. If you include these people, you talking (private estimates) more like 70%.

I would give Obamacare an I. If it can reach 20-25 million of the 40 million originally predicted in 5 or so years, it will have done well. That will depend largely upon costs. I think that the Red state folks will only be willing to buy more expensive insurance outside of the exchanges for a limited period of time. (There are at least two alternative scenarios. First, competition on the exchanges really does not lower prices. Insurance bought directly from the insurers continues to cost the same and we find that markets in health care dont work so well at controlling costs. Second, the insurers use business on the exchanges to subsidize those consumers they have that buy directly from them, keeping costs. down. Probably limited to states with just one or two dominant carriers.)

Steve

Andy March 31, 2014 at 8:31 pm

I’m not sure we come to any conclusions yet. I’d still like to see official data, not a survey. It concerns me the Administration is stingy with the data.

jan March 31, 2014 at 11:51 pm

Robert Laszewski was named “Pundit of the Year” by the Washington Post for 2013, for having “one of the most accurate and detailed public accounts” detailing the beginnings of the PPACA’s rollout. Here he discusses if Obamacare Was Worth It?

IMO, it wasn’t.

Much like the pre-passage of the PPACA was imbued with deceptive marketing and general ignorance as to what the bill actually contained, so has the implementation been plagued by sheer incompetence and marked by a spectrum of inconclusive figures, much of which has been spun by supporters of the bill as signaling some kind of success.

However, it still puzzles me how people continue to rally around this bill when there is such a lack of transparency as to what these government figures really mean. It’s like filling a non-see-though container with coins and then estimating the value of what it contains by a crystal ball analysis. After all, it could be filled only with pennies, having relatively little worth. That’s how the demographics of the 6 million plus enrollment claim is evolving, being the HHS and government minions are so close-mouthed as to questions of “who has paid,” “age and health breakdown of these enrollees,” “how many previously uninsured are in this group versus those who lost their insurance due to Obamacare mandates,” etc. The figure, though, of those who lost their government-discredited HC insurance is now up to 6,286,000 plus. And, after some 80 million reported visits to the government HC site, along with millions who called in about the plans, only 6-7 million have been cited by the government as having enrolled. Why did so many opt not to sign up? Actually, it’s less than that, as up to 20% of that figure has not paid. And, still another estimated 5% only paid one month’s premium, and not their second month’s payment. How can that possibly be deemed a success?

Furthermore, people who used to pay for their own insurance now have government subsidies. Four out of five sign-ups apparently qualify for said subsidies. Other previously self-insured people are being forced into medicaid expansion programs they don’t want. And, as a side show to all this, the site continues to crash and need fixes when traffic gets busy. Now we’re talking about a country of over 300 million, and this government site is buckling under the weight of 100,000 hits!!! And, this is after an IT investment of $677 million to build it!

Then you have the CEO of the prestigious and government-touted Cleveland Clinic asserting that 75% of individual HC premiums are higher than before, with higher deductibles. They are also saying there are serious concerns regarding lower government payments to hospitals and cuts to medicare. Furthermore, some of the most respected hospitals and physicians are opting out of Obamacare altogether. How is that going to work out when a person, having low-cost insurance, has no good or nearby medical services that will take them on as a patient?

When you really look at all the unkept Obamacare promises, all the after passage changes, the disruption of medical care assurances in so many people’s lives, I just don’t see how anyone can look at this HC legislation as anything but a colossal misrepresentation of what it was intended to do.

michael reynolds April 1, 2014 at 9:18 am

Jan:

Death spiral! Death panels! Death!

Two to one, honey, two to one for keep and reform. And it looks like we’ll come within a hair of 7 million despite the colossal screw-up of the launch, and despite your people spewing lies (which you’re still doing, of course, and will continue to do,) 24/7 since before the law was even proposed.

You lose. We win. Suck it.

steve April 1, 2014 at 11:39 am

” Furthermore, some of the most respected hospitals and physicians are opting out of Obamacare altogether. ”

Who? No one in our area. Granted, places like University of Penn and U of Pitt may not be prestigious enough for you.

Steve

jan April 1, 2014 at 3:39 pm

Michael, you rarely disappoint in your knee-jerk ideological responses:

“You lose. We win. Suck it.”

It’s usually based on winners and losers kind of mentality. If you win, it’s wonderful. If you lose, the villainous republican party is cast as the devil incarnate. Nonetheless, your kind of thinking is based on forced redistribution between classes, pushing your definition of equality over open-minded opportunity, and having little to do with either non-judgmental fairness or merit. What you continuously bask in is your glorious estimation of how virtuous your social progressive ideology is towards the poor. It’s strange than that under the Obama regime the gap between rich and poor has only grown. The economy has stagnated regarding job opportunities for the middle class, along with their income. Everything in your world, however, is weighed and measured on government figures, which, in many people’s estimation, have only been juggled and misrepresent the real condition of this country.

Steve,

Here and here are some references to how the PPACA is limiting access to some of the top hospitals. Sloan Kettering Cancer Center and Seattle Children’s Hospital are also part of this group in deliberating if or how they can deal with Obamacare. There are also countless anecdotal stories of people losing their coverage, doctors, hospitals, treatment plans, access to medicines, all because of the reconfiguration of so many people’s HC lives in order to insure people who aren’t necessarily even interested in the PPACA coverage. I guess you all would simply brush that aside calling it insignificant collateral damage ….

However, the perplexing state of healthcare, as it now stands because of the confining restraints of the PPACA, has yet to fully reveal itself. Time will measure what has been lost and/or gained by this unfortunate legislation. I think, though, that HC could have been reformed in a much better, less bitter and hurtful bi-partisan manner. But, it’s too late now, as bureaucratic crap becomes embedded in the system, forever being a part of our ever-growing state of dependency and debt.

michael reynolds April 1, 2014 at 3:57 pm

Jan:

Jesus H. Christ you’re a hypocrite. Oh my God. There is not an honest molecule to be found in you.

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