Sunday, March 30, 2014

Was Obamacare Worth It? How Many of the Previously Uninsured Have Really Signed Up?

Health insurance reform was long overdue. But did it need to be done the way the architects of the Affordable Care Act did it?

Obamacare was enacted, and the private health insurance market fundamentally changed, so that we could cover millions of people who previously couldn't get coverage.

Are enough people getting coverage who didn't have it before to justify the sacrifices the people who were already covered––in the individual, small group, and large employer market––are making or will make?

I will suggest the country will never really be able to judge how good or how bad Obamacare is until that question is answered.

Forget the Obama administration's spin over hitting 6 million. Forget all of the opposition spin over Obamacare's failings.

The country's judgment should and will come down to a simple answer to this simple question.

Of course, the more than 6 million enrollment the administration recently announced overstates Obamacare's success because this includes enrollments that were never completed since the person never paid the premium. There are lots of reasons why a consumer might not complete the enrollment. The person may have hit the enroll button a number of times and ended up paying only once. It may have been one of the infamous "834" transactions that never made sense and the consumer ended up having to enroll again later. Or, the person might have had second thoughts about the cost/benefit of Obamacare and decided not to move forward.

Then there were a measurable number of people who paid their first month's premium but never paid the second month's premium. I am told that 2% to 5% of January's enrollments never paid in February, for example.

Whatever the reason, the real enrollment number will likely be about 20% lower than what the administration finally reports. That means the real enrollment will be closer to 5 million than 6 million.

But 6 million sounds better than 5 million.

There are two important pieces of information we need to have before the country can really answer this fundamental question about the way Obamacare accomplished health insurance reform:
  1. How many people have actually paid and completed their enrollment?
  2. To what extent have we reduced the ranks of the uninsured––how many of these people who enrolled were previously insured and how many of them were previously uninsured?
Reporters often ask these questions and the Obama administration says they don't know. And, that's the end of it.

But these questions are easily answered.

Every insurance company knows exactly how many people it has enrolled and who paid their premium at the end of every billing period. How else would they be able to process the claims for these people?

How many people were enrolled and paid for?

All HHS Secretary Sebelius has to do is write each of the 400 insurance companies selling in the exchanges and ask them for the total number of people enrolled and paid for on the insurance exchanges as of a certain date. She could email each of them on April 1 and ask for their hard enrollment numbers, for example, as of the end of the month of March. Either the feds or the state exchanges communicate with the carriers daily. The carriers would be able to respond in a matter of hours with the data.

Then, get a pad of paper, a pencil, and a dime store calculator and add up the numbers. By April 5th, we would know the precise answer.

Then there is the second question: Just how much have we reduced the ranks of the uninsured since Obamacare went into effect? It's just as easy to answer this question.

We only need ask the carriers for two numbers:
  1. The number of people they insured (and were paid for) in both the individual and small group markets as of December 31, 2013––the day before Obamacare started covering people.
  2. The number of people that were insured (and paid for) in both the individual and small group markets on a specific date––March 31, 2014, for example.
I will suggest that asking for both the small group and individual market numbers is important as people have a tendency to move between the markets, particularly as employers drop coverage and their people go, or don't go, into the exchanges.

Then subtract one total from the other. We would have an excellent idea of just how many more people, net of any gains and losses, secured private insurance since Obamacare's launch.

Then people could make their judgments about how well Obamacare accomplished health insurance reform free from all of the spin.

My conversations with carriers suggest that about half of the enrollments come from the ranks of the previously insured. But that is just anecdotal information. I don't have a hard number. And, why should anyone believe me particularly when the real answer so easy to get?

Yes, there might be some movement between the large employer market and these other markets and there are a very few carriers not participating in the exchanges. But, I will suggest, to the 90th percentile, we'd have our answer. It would sure be a lot more accurate answer than someone doing a poll involving a few hundred or even a few thousand people.

Why should the administration make the effort to get this information? They know the answer wouldn't spin as well as saying they have enrolled 6 million people and arguing that millions of previously uninsured people have coverage.

But the fundamental question is: Did we sign-up enough people to really reduce the ranks of the uninsured and therefore make this new health law worth it?

The information the country needs to answer that question, and to really judge Obamacare for themselves, is remarkably easy to produce.

And, the press needs to do its job making sure the people get it.
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