Avik Roy, Forbes Staff
The Obama administration has, for months now, been peddling nice-sounding numbers as to how many people are gaining health coverage due to Obamacare. But their numbers have been inflated on two fronts. First, not everyone who has “selected a marketplace plan” under Obamacare has actually paid the required premiums, payment being required to actually gain coverage. Second, only a fraction of people on the exchanges were previously uninsured. A new survey from McKinsey gives us a better view into the real numbers. Of the 3.3 million people that the White House has touted as Obamacare exchange “sign-ups,” less than 500,000 are actual uninsured people who have actually gained health coverage.
Many Obamacare ‘enrollees’ aren’t actually enrolled
McKinsey, the leading management consulting firm, has been conducting monthly surveys of the exchange-eligible population under the auspices of its Center for U.S. Health System Reform. McKinsey’s most recent survey, conducted in February with 2,096 eligible respondents, found that only 48 percent had thus far signed up for a 2014 health plan. Within that 48 percent, three-fifths were previously insured people who liked their old plans and were able to keep them. The remaining two-fifths were the ones who signed up for coverage on the Obamacare exchanges.
Of the Obamacare sign-ups, only 27 percent had been previously uninsured in 2013. And of the 27 percent, nearly half had yet to pay a premium. (By contrast, among the 73 percent who had been previously insured, 86 percent had paid.)
Put all those percentages together, and you get two key stats. Only 19 percent of those who have paid a premium were previously uninsured. Among those that the administration is touting as sign-ups, only 14 percent are previously uninsured enrollees: approximately 472,000 people as of February 1.
Those not signing up cited affordability of plans as biggest issue
Here’s an important finding from McKinsey. The authors of the study—Amit Bhardwaj, Erica Coe, Jenny Cordina, and Mahi Rayasam—asked those who decided not to enroll in a plan what their reasons were for doing so. The most frequent reason—cited by 50 percent of respondents—was that “I could not afford to pay the premium.” Only 27 percent cited technical challenges; 14 percent said they couldn’t find a plan that met their needs. 21 percent said they were still deciding.
This is the biggest problem with the way the “Affordable Care Act” approached coverage expansion. The reason why so many Americans are uninsured is because health insurance in this country is too expensive. Obamacare increases the underlying cost of health insurance, and then uses taxpayer-funded subsidies to offset those costs for some.
AP: 4.7 million Americans have had their plans canceled
Keep in mind another fact: According to the Associated Press, at least 4.7 million Americans who shop for coverage on their own have had their plans canceled because they don’t conform to Obamacare’s regulations. So Obamacare has disrupted the coverage of millions of Americans, requiring many to purchase costlier policies with higher deductibles and narrower doctor networks, for a fairly modest expansion of coverage.
According to the administration, total sign-ups now exceed 4 million. But on a recent HHS conference call, Obamacare implementation point man Gary Cohen was asked the key question: how many of the people who have signed up for Obamacare were previously insured? His response: “That’s not a data point that we are really collecting in any sort of systematic way.”
So. The whole point of Obamacare was to expand coverage to the uninsured. But for the tens of thousands of regulations that the law has imposed on the country, its authors never bothered to try to measure the one thing that they were actually trying to achieve. That about sums it all up.* * *
UPDATE: A Daily Kos blogger named Charles Gaba, at acasignups.net, argues that the McKinsey study “tells us pretty much nothing,” because it did not distinguish between off-exchange and on-exchange individual-market sign-ups. “My personal suspicion,” he writes, “is that the true ‘previously insured / uninsured’ breakout nationally is closer to 50/50 overall.”
Fortunately, we don’t have to rely on personal suspicions. As my colleague Scott Gottlieb notes, we have actual data from insurers on this topic; most analyses estimate that approximately 20 percent of sign-ups to date have been off the Obamacare exchanges.
If we (generously) assume that every single off-exchange signer-upper was previously insured, in order to make the math as flattering to Obamacare as possible, and that 20 percent of sign-ups were off-exchange, we arrive at the following paid enrollee breakdown on the exchange: 76 percent previously insured, 24 percent previously uninsured.
24 percent is better than 14 percent, but not so much better as to justify a furious defense of the exchanges’ performance in this regard. And the percentage of off-exchange uninsured signups is unlikely to be zero.
AVIK’S NEW BOOK, How Medicaid Fails the Poor, is now available in paperback, Kindle, and iBooksversions. Follow @Avik on Twitter, Google+, andYouTube, and The Apothecary on Facebook. Or, sign up to receive a weekly e-mail digest of articles fromThe Apothecary.