Today is March 31, 2014: in theory, the last day you can sign up for coverage under the subsidized Obamacare insurance exchanges. If youve been a regular reader of this space, you know that the numbers routinely paraded by the Obama administration regarding Obamacare website sign-ups dont tell us much about the actual number of uninsured individuals who have gained coverage. A new study from the RAND Corporation indicates that only one-third of exchange sign-ups were previously uninsured.
The RAND study hasnt yet been published, but its contents were made available to Noam Levey of the Los Angeles Times. RAND also estimates that 9 million individuals have purchased health plans directly from insurers, outside of the exchanges, but that “the vast majority of these people were previously insured.”
The RAND report appears to corroborate the work of other surveys. Earlier this month, McKinsey reported that 27 percent of those signing up for coverage on the individual market were previously uninsured.
Around 1/4 of exchange enrollees were previously uninsured
One important finding of the McKinsey survey was that the proportion of those who had formally enrolled in coverage, by paying their first months premium, was considerably lower among the previously uninsured, relative to the previously insured. 86 percent of those who were previously insured who had “selected a marketplace plan” on the exchanges had paid, whereas only 53 percent of the previously uninsured had.
If you apply that math to the RAND figures, you get this: of the people who have paid their first months premium on the Obamacare exchanges, and are thereby enrolled in coverage, 76 percent were previously insured, and 24 percent were previously uninsured.
Two caveats. First, we know little about RANDs survey methodology at this time; well have to see the actual study to see the details of what they did. Second, we dont know how many previously uninsured people signed up for off-exchange coverage, above and beyond the normal rate of churn that this market would traditionally see.
CBO predicted nearly all exchange enrollees would be previously uninsured
Whats important to remember is that this is not how Obamacare was supposed to work. The Congressional Budget Office, in its original estimates, predicted that the vast majority of the people eligible for subsidies on the exchanges would be previously uninsured individuals.
Instead, the vast majority are previously insured people, many of whom are getting a better deal on the exchanges because they either qualify for subsidies, or because theyre older individuals who benefit from the laws steep rate hikes on the young.
This is a problem that may get worse over time, as the cost of plans continues to go up. In the McKinsey survey, of those who had decided not to sign up for Obamacare, the most common reason was the “affordability” of the offered plans. Indications from insurers like Aetna and WellPoint is that the premiums on the exchange will go up substantially next year.
The bottom line is this: there are a lot of numbers flying around out there about how many people are benefiting from Obamacare. A big part of the reason is political; advocates of the law want to claim that so many millions of people are dependent on the law for coverage, that it will be difficult to repeal.
I agree with them that the law will be difficult to repeal, but thats no excuse for whitewashing the real problems with affordability and access in the Obamacare exchanges.
Original Source: http://www.forbes.com/sites/theapothecary/2014/03/31/rand-only-one-third-of-obamacare-exchange-sign-ups-were-from-the-previously-uninsured/