Those meager ♡bamaCare!!! enrollment expectations we discussed here last week? It’s worse than we thought:
If the administration is able achieve an average paid-for enrollment of 10 million people during 2016, they would have only signed up 36% of the potential market of 28.1 million.
Why is this important?
Because in order for a health insurance program to be sustainable and affordable, it must sign up many more healthy people than sick people in order to pay the costs of those who are sick. Since Obamacare is still relatively new we don’t know for certain what percentage of the total eligible we need to make the program work. But, we do know that the longtime health insurance industry underwriting rule is that 75% of an eligible group is necessary to get “an adequate cross section of risk”–the right balance between sick and healthy.
By historical standards, if the administration were to meet its 2016 enrollment estimates it would have only half of the population needed to make the program sustainable. No matter what Obamacare’s actual take-up requirement turns out to be, 36% is not even close.
They’re losing money on every sale, but will make it up with lack of volume.