This past Wednesday, in a closed press
call, the Department of Health and Human Services (HHS) Secretary Sylvia Burwell
gave us our first look at how things were shaping up with the 2015 ObamaCare
open enrollment.
In a marked improvement to her predecessor Kathleen Sebelius, Burwell provided not just the total number of customers who had selected a qualified healthcare plan (QHP) on the federal healthcare exchange, she also was candid in qualifying this number to include those that were renewing or changing their plans from 2014. Such transparency was unheard of during the initial enrollment where figures were falsely inflated in any and every way possible to give the perception of success.
Going forward, it appears Burwell is looking to do a better job in providing transparency when it comes to releasing enrollment figures, at least as much transparency as the administration will allow her to provide.
Here are the Numbers!
During her press call, Burwell stated that in the first week of the 2015 enrollment period 462,125 customers selected a healthcare plan on the federal marketplace and of those customers, 240,000 were renewals or customers changing their plans. This would indicate that just less than half of those plans selected, about 222,000, are new customers.
222,000 new customers selecting plans, that looks to be a pretty good start right? Well maybe yes and maybe no.
The federal marketplace encompasses 73% of the 50 states and DC making the nationwide new enrollment somewhere around 303,000, all things being equal. With 13 weeks available in the enrollment cycle, if the same new enrollment trajectory were maintained then we could expect to see enrollment numbers approaching 4 million. That would be a welcome sight no doubt but highly unrealistic considering that there were only about 3.4 million1 long term uninsured who purchased a QHP during the inaugural 6 month open enrollment period.
We Won’t Be Fooled Again!
We learned a valuable lesson from getting caught up in the preliminary numbers released by the administration during the first enrollment period. Who can forget the outlandish claim made by the president in his 2014 State of the Union Address where he stated that, as a result of his signature healthcare legislation, more than 9 million had signed up for healthcare through the states exchanges and Medicaid expansion. This falsehood earned President Obama 4 coveted Pinocchios from The Washington Post’s Fact-Checker and was one of many inaccurate enrolment claims that surfaced from the administration throughout the initial enrollment period and for months to follow.
Hopefully the days of the Obama Administration’s intentional misleading the public on ObamaCare enrollment are behind us but we still must remain diligent in our interpretation of what it is exactly that both the administration and the media are reporting. Selecting a plan is significantly different than paying for one.
It does seem however that HHS is being forthcoming in their differentiation between new and returning customers and they no longer appear to be bundling those that are taking advantage of the Medicaid expansion with those who have selected plans on one of the healthcare exchanges either.
The Second Wave of Insurance Cancelations is Underway
Of the 6.7 million who purchased and paid for a QHP on the healthcare exchanges for 2014, more than half came from those who had their insurance plans canceled for being non-ACA compliant. And with the second wave of insurance policy cancelations already in the mail, the process will repeat itself with hundreds of thousands more individuals expected to soon lose their old healthcare plans.
For those that have their healthcare policy canceled, they do have the option of shopping for a new ACA compliant plan directly from the private insurance marketplace. However, the skyrocketing healthcare insurance premiums which resulted from the ObamaCare mandated essential benefits package, will force most to seek out the tax subsidies offered only on the state and federal healthcare exchanges.
Those that do purchase a healthcare plan through one of the healthcare exchanges will be counted as a ‘new customer’ by HHS but of course these enrollments do nothing in regards to lowering the number of the nation’s uninsured and should not be counted as such, as they have been in the past.
How Many Will End Up Paying
The difference between a selected plan and an actual enrollment is payment! The distinction between the two became a massive point of contention between the Obama Administration and ObamaCare opponents during the 2014 open enrollment period when the administration was spinning weak sign-ups every way possible.
When the dust finally settled nearly 20% of those that had selected a healthcare plan on one of the exchanges never made their first payment or had canceled their plan shortly after.
Will we see the same trend during the 2015 enrollment period? Likely so as there are always a certain number of consumers who change their minds.
Some Will Not Renew Their Policies
The gravest concern of the administration is the number of those who will not renew their insurance plan.
Almost universally, insurance premiums for 2015 have increase although not near as much as many had feared. None the less, premiums did go up which makes consumers unhappy and the president very uneasy.
Overall, premiums across all tier levels and all states increased by 5.2%, as reported by PricewaterhouseCoopers, but the most popular plan of 2014, the cheapest Silver tier plan, realized an average premium increase of 10%, as stated in a study conducted by Avelere Health.
A 10% increase to an average middle tier plan of $328 adds up to nearly $400 out of wallet to the holder annually, much more if they are a millennial. For the average family, the 10% increase will pull over $1000 out of their annual budget. Their goes that summer vacation.
Unable to get away from the premium increases, President Obama has stated that there are plenty of choices on the exchanges and suggests that people shop around for better deals that fit their budget, i.e. trade in their Silver plan for a leaner Bronze plan. Is this what having quality and affordable healthcare insurance has come to?
What Happened to the Massive Rate Hikes Some Were Predicting?
Giving the marketplace a moment to settle out after the close of the 2014 enrollment period, around mid-year several think tanks and insurance industry watchdog organizations began the task of analyzing the effects the new law was having on the marketplace and started making predictions of what we could expect down the road. Across the board groups such as the Urban Institute published reports predicting that insurance premiums were likely to increase significantly in 2015. So what happened, did they all get it wrong? Absolutely not, the devil is in the details.
Once the insurers began to echo what others were reporting, President Obama began to put on the pressure. He negotiated tirelessly with insurers and pleaded that they keep their premiums as low as possible. Insurers obliged the president as best they could and offset some of the premium increases by shifting the cost to other components of the insurance plans such as increasing co-payments, deductibles and other out of pocket expenses.
At the request of the president, insurers may have held premiums down to a level that would help retain and attract customers but as a result many customers cannot afford to get sick.
What All This Means to ObamaCare
In a nut shell, the future of ObamaCare continues to looks pretty grim. Insurance premiums that were once predicted to be so low that the uninsured would flock to the exchanges and sign up for healthcare insurance have turned out to be so high that many cannot afford to purchase the cheapest plans even with federal tax subsidies. The poor turnout of the uninsured forced the administration to lower enrollment expectations to 9.1 million, down from 13 million, and the administration still remains unforthcoming in disclosing how many of those who purchase a QHP were formerly uninsured.
A footnote; Let us not forget, the goal of ObamaCare is to insure the long term uninsured not to transfer responsible individuals off of one insurance plan and on to another, at least that is what they told us!
In a marked improvement to her predecessor Kathleen Sebelius, Burwell provided not just the total number of customers who had selected a qualified healthcare plan (QHP) on the federal healthcare exchange, she also was candid in qualifying this number to include those that were renewing or changing their plans from 2014. Such transparency was unheard of during the initial enrollment where figures were falsely inflated in any and every way possible to give the perception of success.
Going forward, it appears Burwell is looking to do a better job in providing transparency when it comes to releasing enrollment figures, at least as much transparency as the administration will allow her to provide.
Here are the Numbers!
During her press call, Burwell stated that in the first week of the 2015 enrollment period 462,125 customers selected a healthcare plan on the federal marketplace and of those customers, 240,000 were renewals or customers changing their plans. This would indicate that just less than half of those plans selected, about 222,000, are new customers.
222,000 new customers selecting plans, that looks to be a pretty good start right? Well maybe yes and maybe no.
The federal marketplace encompasses 73% of the 50 states and DC making the nationwide new enrollment somewhere around 303,000, all things being equal. With 13 weeks available in the enrollment cycle, if the same new enrollment trajectory were maintained then we could expect to see enrollment numbers approaching 4 million. That would be a welcome sight no doubt but highly unrealistic considering that there were only about 3.4 million1 long term uninsured who purchased a QHP during the inaugural 6 month open enrollment period.
We Won’t Be Fooled Again!
We learned a valuable lesson from getting caught up in the preliminary numbers released by the administration during the first enrollment period. Who can forget the outlandish claim made by the president in his 2014 State of the Union Address where he stated that, as a result of his signature healthcare legislation, more than 9 million had signed up for healthcare through the states exchanges and Medicaid expansion. This falsehood earned President Obama 4 coveted Pinocchios from The Washington Post’s Fact-Checker and was one of many inaccurate enrolment claims that surfaced from the administration throughout the initial enrollment period and for months to follow.
Hopefully the days of the Obama Administration’s intentional misleading the public on ObamaCare enrollment are behind us but we still must remain diligent in our interpretation of what it is exactly that both the administration and the media are reporting. Selecting a plan is significantly different than paying for one.
It does seem however that HHS is being forthcoming in their differentiation between new and returning customers and they no longer appear to be bundling those that are taking advantage of the Medicaid expansion with those who have selected plans on one of the healthcare exchanges either.
The Second Wave of Insurance Cancelations is Underway
Of the 6.7 million who purchased and paid for a QHP on the healthcare exchanges for 2014, more than half came from those who had their insurance plans canceled for being non-ACA compliant. And with the second wave of insurance policy cancelations already in the mail, the process will repeat itself with hundreds of thousands more individuals expected to soon lose their old healthcare plans.
For those that have their healthcare policy canceled, they do have the option of shopping for a new ACA compliant plan directly from the private insurance marketplace. However, the skyrocketing healthcare insurance premiums which resulted from the ObamaCare mandated essential benefits package, will force most to seek out the tax subsidies offered only on the state and federal healthcare exchanges.
Those that do purchase a healthcare plan through one of the healthcare exchanges will be counted as a ‘new customer’ by HHS but of course these enrollments do nothing in regards to lowering the number of the nation’s uninsured and should not be counted as such, as they have been in the past.
How Many Will End Up Paying
The difference between a selected plan and an actual enrollment is payment! The distinction between the two became a massive point of contention between the Obama Administration and ObamaCare opponents during the 2014 open enrollment period when the administration was spinning weak sign-ups every way possible.
When the dust finally settled nearly 20% of those that had selected a healthcare plan on one of the exchanges never made their first payment or had canceled their plan shortly after.
Will we see the same trend during the 2015 enrollment period? Likely so as there are always a certain number of consumers who change their minds.
Some Will Not Renew Their Policies
The gravest concern of the administration is the number of those who will not renew their insurance plan.
Almost universally, insurance premiums for 2015 have increase although not near as much as many had feared. None the less, premiums did go up which makes consumers unhappy and the president very uneasy.
Overall, premiums across all tier levels and all states increased by 5.2%, as reported by PricewaterhouseCoopers, but the most popular plan of 2014, the cheapest Silver tier plan, realized an average premium increase of 10%, as stated in a study conducted by Avelere Health.
A 10% increase to an average middle tier plan of $328 adds up to nearly $400 out of wallet to the holder annually, much more if they are a millennial. For the average family, the 10% increase will pull over $1000 out of their annual budget. Their goes that summer vacation.
Unable to get away from the premium increases, President Obama has stated that there are plenty of choices on the exchanges and suggests that people shop around for better deals that fit their budget, i.e. trade in their Silver plan for a leaner Bronze plan. Is this what having quality and affordable healthcare insurance has come to?
What Happened to the Massive Rate Hikes Some Were Predicting?
Giving the marketplace a moment to settle out after the close of the 2014 enrollment period, around mid-year several think tanks and insurance industry watchdog organizations began the task of analyzing the effects the new law was having on the marketplace and started making predictions of what we could expect down the road. Across the board groups such as the Urban Institute published reports predicting that insurance premiums were likely to increase significantly in 2015. So what happened, did they all get it wrong? Absolutely not, the devil is in the details.
Once the insurers began to echo what others were reporting, President Obama began to put on the pressure. He negotiated tirelessly with insurers and pleaded that they keep their premiums as low as possible. Insurers obliged the president as best they could and offset some of the premium increases by shifting the cost to other components of the insurance plans such as increasing co-payments, deductibles and other out of pocket expenses.
At the request of the president, insurers may have held premiums down to a level that would help retain and attract customers but as a result many customers cannot afford to get sick.
What All This Means to ObamaCare
In a nut shell, the future of ObamaCare continues to looks pretty grim. Insurance premiums that were once predicted to be so low that the uninsured would flock to the exchanges and sign up for healthcare insurance have turned out to be so high that many cannot afford to purchase the cheapest plans even with federal tax subsidies. The poor turnout of the uninsured forced the administration to lower enrollment expectations to 9.1 million, down from 13 million, and the administration still remains unforthcoming in disclosing how many of those who purchase a QHP were formerly uninsured.
A footnote; Let us not forget, the goal of ObamaCare is to insure the long term uninsured not to transfer responsible individuals off of one insurance plan and on to another, at least that is what they told us!
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