It has been a triumphant month for liberal journalists who have lived and died with the fortunes of the Affordable Care Act since its passage in March 2010. Ezra Klein and Jon Cohen have declared victory, describing an amazing recovery for the program and for President Obama since the dark days of near-total failure among people trying to sign up on the federal exchanges in October and November.
To listen to Obamacare supporters, Kathleen Sebelius leaves her post as secretary of the Department of Health and Human Services with her head held high, as her legacy now includes shepherding across the finish line a major expansion of health insurance for low-income, previously uninsured Americans. Howard Dean says the Republicans would be foolish to attack Obamacare in this year’ s campaign, now that the program has achieved so much success
Carl Sagan spoke of “billions and trillions”; now the president and the Obamacare support media can talk of millions and millions newly insured.
But how many millions?
Prior to the opening of the exchanges in October 2013, President Obama claimed that the ability of families to keep children on their health insurance policies through age 26 had already added three million people to the ranks of the insured. This claim appears to be nonsense. Avik Roy — one of the few journalists who has actually been examining the data and drawing his own conclusions rather than regurgitating or looking to justify each of the administration’s assertions — estimates that the actual number of newly covered young people is less than one-third of the number claimed, and perhaps far less.
In fact, the percentage of uninsured Americans aged 18 to 24 has not changed at all from 2008 — prior to the economic collapse — through 2013. And of course, the change in policy did not come free. Roy estimates that family plans now cost $160 to $480 a year more due to the new coverage — and that is for all families, including all those without children who are newly covered. Also, as with all the other “free things” offered on the screening side due to Obamacare, none of it is free as someone else has to pay for them.
The numbers for October 1 through the end of March — and now beyond due to late trickles from the exchanges — suggest 7.5 million people signed up on either the 16 state exchanges or the federal exchange (used by the other 34 states). Medicaid sign-ups, which can continue without any deadline during the current federal fiscal year, were 3.5 million. About half of the states did not participate in the Medicaid expansion, so any new enrollees in Medicaid in these states can not be attributed to Obamacare.
In the years 2010 to 2013 — after the act was passed but before any expansion of the program beyond those at 100% of the poverty level or below — and now, since the expansion, Medicaid enrollees have increased. If the growth in the non-expansion states is considered a proxy for the enrollment growth that would have occurred without Obamacare, then about a quarter of the Medicaid enrollment growth is “natural” and unrelated to Obamacare. That leaves about 2.5 million new Medicaid enrollees, who benefited from the expansion of the program to include those earning up to 138% of the poverty level.
Given the huge promotional push for Obamacare (some estimate a billion or more in federal, state, and corporate spending to advertise the new enrollment opportunities), it is likely that most of any surge in enrollment for Medicaid attributable to the coverage expansion has already occurred for this year. For point of reference, Medicaid enrollment grew by over 7% annually in the two years which overlapped with the economic recession, a faster growth rate than the recent six-month period which included a large eligibility expansion.
If you are keeping score, we may have 3.5 million total insured by counting young people kept on their parents’ policies and the expansion of Medicaid coverage. The big whale, then, is the enrollment number for the exchanges.
The Obama administration has released a mid-April figure of 7.5 million, though they admit this is not the number of those who have paid a premium (or paid once and continued to pay).
Several insurance companies — the ones actually providing new coverage and collecting premiums — have suggested that a ratio of 80% paid to enrolled is a good estimate so far. That would mean six million paid enrollees.
In total, 9.5 million are newly insured, of which a million or so come from the family plan expansion that occurred prior to October 2013 — leaving 8.5 million newly insured since the exchanges opened. This is a number well short of the administration’s first year goal of close to 15 million new enrollees, though in fairness another 2.5 million Medicaid enrollees might have signed on had all 50 states expanded coverage, bringing the total number since October 2013 to 11 million.
Of course, previously insured people lost coverage and did not obtain new coverage. This number may not be that large. Rand Corporation has estimated that a large percentage of the first few million enrollees in the exchanges had coverage before October 1, and shifted to the exchanges either to replace a cancelled policy or to obtain coverage with a generous federal subsidy to pay for it.
Of course, the subsidies are not free lunches. They are paid for with cuts to Medicare and higher taxes on a small percentage of Americans and industry groups.
A few new surveys from the last month provide numbers in line with Rand’s estimates on the number of Americans newly insured and the drop in the percentage of Americans without insurance. Gallup estimates a 4% reduction in the percentage of adults without insurance. Gallup goes on to note that a disproportionate percentage of the newly insured are younger people or lower income people, who tend to vote Democratic.
The youth aspect is not surprising, since those over age 65 are already covered in almost all cases by Medicare. Obamacare did nothing for them, and made some changes to Medicare Advantage programs that will likely make this alternative more costly and less attractive to the elderly.
Of course, the political damage to Democrats for this election cycle from the Medicare Advantage program cuts has been eased by one of the many program changes announced by the administration.
A major goal of the Affordable Care Act was to expand coverage through redistribution of income, taking taxes from haves to provide subsidies on the exchanges or expanded Medicaid coverage to have-nots. The legislation’s sponsors said this was a critical justification that they did not attempt to hide — “reform” meant “redistribution.”
On that score, the program seems to have achieved its goals if Gallup’s survey is accurate, and probably reinforced political positions on the wisdom of expanding big government social programs among its recipients.
For now, the administration is several million short of its first-year enrollment goal, even adjusting for the states that did not expand Medicaid. The Affordable Care Act’s backers may be right that the program numbers, whether nine million or something slightly smaller or larger, will make it much less likely that it can be legislatively dismantled.
A different threat may come from the Supreme Court. John Roberts passed on an opportunity in 2013 to kill the bill in its entirety. But the Court may get one more chance to deal a partial death blow for the states that are part of the federal exchanges. Sloppy drafting of the legislation seems, on its face, to prohibit federal subsidies when states fail to set up their own exchanges and rely on the federal government to do it.
I think this challenge faces long odds. Of course, what Obamacare is today is a lot different than the bill that was passed. Several dozen changes were unilaterally adopted by the administration to delay or modify provisions so as to avoid political damage in the 2012 election and in 2014.
The administration has never seemed to share Howard Dean’s confidence that everyone now or in the future will love Obamacare. All that is clear: whatever Obamacare is at any point in time, its original supporters will race to the barricades to defend it.
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