The Early Rushes on the PPACA

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• At least 4.5 million previously uninsured adults have signed up for state Medicaid programs, according to Rand’s unpublished survey data, which were shared with The Times.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.