Brian Blase explains why ♡bamaCare!!! exchange enrollment after two years remains poorer, sicker, and far smaller than the law’s supporters ever imagined:
Low enrollment figures have been driven, in large part, by the exchange plans’ failure to attract middle-class uninsured people. Most recently, CBO projected 3 million unsubsidized enrollees in 2015, when in fact there were only 1.6 million. In early 2015, the Urban Institute estimated that 25 percent of enrollees in 2016 would be earning more than 400 percent of the federal poverty line; at the end of the 2015 open enrollment period, only 2 percent of enrollees fell into that income class. Most strikingly, only 2 percent of eligible individuals earning more than 400 percent of the federal poverty line chose to purchase exchange plans.
A contributing factor to these forecasting errors was the assumption that the individual mandate would be a more effective tool than it has been thus far. Several forecasting organizations assumed a large noneconomic motivation to conform to laws and to a new social norm for having health insurance. However, a recent study found that most households above 200 percent of the poverty line would be financially better off forgoing ACA insurance for economic reasons, an effect that appears to be dominating decision-making more than any noneconomic desire to conform to the mandate.
Imagine Barack Obama’s, Nancy Pelosi’s, and Harry Reid’s hubris that they could construct “a new social norm” out of whole cloth, by ramming through an incomprehensible bill through unconstitutional means over the strenuous objections of voters even in ultra-blue Massachusetts.
The result of that hubris isn’t pretty, much less “affordable.” Read on:
Early results from the risk corridor program, an ACA-created profit- and loss-sharing program between insurers, show significant losses for insurance companies selling ACA plans. Specifically, profitable insurers owed $360 million, while unprofitable insurers filed claims for $2.9 billion, a shortfall of $2.5 billion. The risk corridor data indicate that insurers’ 2014 losses on ACA plans equaled about 12 percent of the premiums collected.
The performance of the risk corridor program falls short of CBO projections and reflects a significantly sicker (and thus more expensive) pool of enrollees than originally expected.
It’s still too early to say “death spiral,” but the prognosis isn’t improving.