Reality Check: Obamacare Enrollment: Will We Make It?

By all accounts, the rollout of the Affordable Care Act did not exactly go as scripted.

The word “glitch” became a part of the national lexicon. Contractors worked furiously to make the online exchange operable, back-end problems persisted, and inaccurate consumer information was sent to insurance companies with alarming frequency.

A grand total of 100,000 people signed up for Obamacare through November 2, nowhere close to the 500,000 new enrollees the administration targeted.

What a difference a few months makes.

This past week, Health and Human Services Secretary Kathleen Sebelius announced that enrollment through state and federal exchanges totaled 3.3 million by the end of January.

The figure represents roughly the halfway point for the Congressional Budget Office’s pre-rollout projection of 7 million, a sum that once sounded laughable.

So is the administration in the process of engineering one of the greatest federal program enrollment comebacks of all time?

Can the law’s supporters claim success, even if the pool is only in the ballpark of 7 million ‘new’ enrollees by the end of March?

To answer these questions, one must know who, exactly, is in this pool.

And therein lies the problem, for now.

“Who are these people?” questioned Sally Pipes, head of the Pacific Research Institute for Public Policy, a free-market think tank based in California.

“Of the people who have signed up for the exchanges, only 11 percent were people who were previously uninsured,” she said, referring to a recent study from consulting firm McKinsey & Co. “And so a lot of them are people who have had their employer take away their health coverage, or they are people who are part of [the pool] who had their individual plans cancelled.”

Should this assertion prove true- that many of the folks currently enrolled migrated to the exchanges after their small (or large) business owners pulled the plug on insurance, or their previous plan was terminated for not meeting ACA standards - the Obama Administration could have a problem.

What are the known facts?

“We can’t rule out, based on the numbers we see now, that almost everyone on the exchange pool is somebody who had some form of insurance before,” noted David Gamage, an assistant professor at Berkeley Law School who helped implement the Affordable Care Act while working at the U.S. Treasury Department.

“Now, that may or may not be the case,” he continued. “We don’t have evidence suggesting it necessarily is the case. We just don’t know yet. We’ll have much better information in a few months.”

Gamage points out that the law’s intent was not just to enroll the uninsured, but to also improve the coverage of those with flimsy plans.

The dual goals, he says, make creating a metric for enrollment success more difficult.

“Even if a large number of people have shifted from lower-quality policies or employer-dropped policies, that doesn’t necessarily mean Obamacare isn’t working,” Gamage said. “Many of those policies are being cancelled because they didn’t qualify as real insurance under the ACA’s guidelines.”

Gamage says those types of plans were called ‘mini-meds,’ because they didn’t offer protection for those who got seriously ill. Under the new law, that sort of bare-bones coverage can no longer continue.

The former Treasury tax guru added, however, that there are also real questions surrounding the makeup of the pool’s health, as a reflection of the general population.

“What really matters isn’t how many people are young, or how many people there are overall,” Gamage said. “It’s to what extent the overall population mix is reasonably healthy, looks reasonably like the nation’s population, or to what extent the population mix that gets exchange coverage is only those who are really sick.”

A flashpoint of enrollee age is seen as a good proxy, since younger people tend to require less medical care and can help offset the cost of aging Americans- making the Obamacare platform viable.

According to the latest figures from the Obama Administration, of the 3.3 million enrollees about 27 percent fall into the critical demographic of 18 to 34-years-old.

That’s well below the administration’s goal of 40 percent, a point that critics of the law have highlighted.

“I really believe that they’re not going to reach that 7 million, but a bigger problem, I find, is that young people are not signing up,” Pipes said.

“How is this going to work? Because they need the young people to sign up to cover the cost of the care for older people, people in my generation,” she said.

Concerns are mounting, Pipes continued, that if the administration can’t hit its benchmark range for 20- and 30-somethings, the ‘young invincibles’ as they’ve been dubbed, the results could be catastrophic.

“The insurance companies are not going to be able to survive,” Pipes said. “A lot will get out of the exchanges. Some haven’t even gone into the exchanges. And we’re going to see the insurance companies go under.”

The think-tanker also worries that many of the folks who have signed-up have not yet paid their premiums, further straining the insurers and complicating the process.

To all of these points, Gamage urges a more measured conclusion, starting with the idea that insurers will withdraw from the exchanges.

“There’s a three-year adjustment period built into the law, so even if the mix is disproportionately unhealthy for a year or two that’s not necessarily fatal,” he said.

That’s because the Affordable Care Act contains (and has always contained) a mechanism called a ‘risk corridor program,’ meant to hedge against lopsided numbers of sick enrollees.

“If the mix ends up being much different than expected, the federal government will partially compensate insurance companies if they end up getting an overly unhealthy population for the next three years,” Gamage said.

But, the inverse is also true.

“If the [enrollee] population is healthier than expected, insurance companies don’t get to keep all the profits for the first few years,” he added.

As for concerns that enough folks will actually pay their premiums, Gamage said that could prove a hurdle or a completely overblown fear.

“It’s not a huge problem if some small number of people don’t end up paying, at least immediately,” he said. “It’s a much bigger problem if, say, 50 percent of the people signed up don’t end up paying without the insurance companies having to spend significant resources having to track them down and going after them.”

So we’ve identified several areas that could dampen the glow of the administration’s 3.3 million figure, particularly the health mix of those who have enrolled.

Can the president really claim that Obamacare is back on track, or critics say the program is set for failure?

In either case, conclusions seem premature.

“Those who are declaring ‘doom and gloom’ based on the numbers available are taking a big leap,” Gamage said.

“There just isn’t the evidence to suggest that we have a serious problem, yet.”