For the
11th week of open enrollment on the Federally Facilitated Marketplace (FFM), the
Department of Health and Human Services (HHS) reported that 179,710 plans were
selected, a nice increase over the previous week. If enrollment continues to improve over the
final two weeks, which it likely has, HHS could in fact reach its enrollment projection
but only after having significantly changing the goals of the federal and state
operated marketplaces as well as the ObamaCare law itself.
HHS Has Changes the Goal of the Marketplace and ObamaCare
Once upon a time the goal of the stated and federal operated marketplaces was to put a qualified healthcare plan in the hands of 24 million uninsured nonelderly Americans by 2017. The Obama Administration seems to have drifted from that goal considerably however, and through a conscious effort put forth by HHS, has taken the proponents of ObamaCare along with them.
The change started almost immediately after the HealthCare.gov website rolled out in October 2013 when it became apparent that the bulk of early enrollments on the healthcare exchanges were a product canceled healthcare plans. Overnight HHS seemed to have dropped the term “uninsured” from its vocabulary and strictly referred to activities on the exchanges as enrollments.
Even with constant pressure from Republican Lawmakers and opponents of the healthcare law, for HHS to provide enrollment data that differentiated between the number of uninsured verses reinsured that had enrolled on the exchanges, with the support of the White House, HHS has avoided doing so to this day. And while 6.7 million individuals may have obtained a qualified healthcare plan through the state and federal exchanges in 2014, as few as 1.4 million of those plans might have actually made it in to the hands of the formerly uninsured, a significant shortcoming from the 7 million the president himself once proclaimed would have the security of securing healthcare insurance through the marketplace by the close of the inaugural open enrollment period.
And the change continues. This open enrollment period HHS does not refer to “uninsured” at all. The distinction in enrollment made on the FFM is between renewals and new consumers, the definition of which the latter has nothing at all to do with the uninsured. Here is how HHS defines a new consumer as taken directly from the Week1 HHS enrollment blog:
HHS Has Changes the Goal of the Marketplace and ObamaCare
Once upon a time the goal of the stated and federal operated marketplaces was to put a qualified healthcare plan in the hands of 24 million uninsured nonelderly Americans by 2017. The Obama Administration seems to have drifted from that goal considerably however, and through a conscious effort put forth by HHS, has taken the proponents of ObamaCare along with them.
The change started almost immediately after the HealthCare.gov website rolled out in October 2013 when it became apparent that the bulk of early enrollments on the healthcare exchanges were a product canceled healthcare plans. Overnight HHS seemed to have dropped the term “uninsured” from its vocabulary and strictly referred to activities on the exchanges as enrollments.
Even with constant pressure from Republican Lawmakers and opponents of the healthcare law, for HHS to provide enrollment data that differentiated between the number of uninsured verses reinsured that had enrolled on the exchanges, with the support of the White House, HHS has avoided doing so to this day. And while 6.7 million individuals may have obtained a qualified healthcare plan through the state and federal exchanges in 2014, as few as 1.4 million of those plans might have actually made it in to the hands of the formerly uninsured, a significant shortcoming from the 7 million the president himself once proclaimed would have the security of securing healthcare insurance through the marketplace by the close of the inaugural open enrollment period.
And the change continues. This open enrollment period HHS does not refer to “uninsured” at all. The distinction in enrollment made on the FFM is between renewals and new consumers, the definition of which the latter has nothing at all to do with the uninsured. Here is how HHS defines a new consumer as taken directly from the Week1 HHS enrollment blog:
New Consumers:
New consumers are those consumers who are selecting a plan for the first time
or whose plan selection in 2014 was terminated, because, for example, they
failed to pay their premium or gained coverage through employer-sponsored
insurance. In addition, because Oregon and Nevada consumers now use the
Federally Facilitated Marketplace platform, they are considered new
enrollments.
Keeping in
mind that this definition pertains only to how HHS classifies a New Consumer on the FFM, it is
significant that in this definition HHS points out that the state of Oregon and
Nevada are considered new enrollments.
Why is this significant? It is so
as it explains how the FFM distinguishes between enrollments.
For the 2015 enrollment period, the FFM has only two distinctions, renewals and new enrollments. To be counted as a renewal, the customer’s 2014 enrollment had to be made through the FFM so that when they returned in 2015, they would be recognized on the FFM database and counted as a renewal. Customers enrolling on the FFM but not recognized on the database are all considered new enrollments regardless of their previous insured or uninsured status. For example, those who lost their 2014 employer sponsored insurance and those who were insured on a state facilitated marketplace 2014 and transferred to the FFM in 2015 are counted as new enrollments or new consumers regardless of the fact that they were previously insured. After week 5 of the open enrollment period the auto re-enrollment period ended and all plans selected beyond that point were considered to be new enrollments aka new consumers.
There is absolutely no distinction made between an uninsured and previously insured individual on the FFM other than recognized renewals, at least not in HHS’s reporting, and this appears to be the way HHS and the Obama Administration wants it to be. The goal of the state and federal healthcare exchanges no longer seems to be to insure the uninsured.
For the 2015 enrollment period, the FFM has only two distinctions, renewals and new enrollments. To be counted as a renewal, the customer’s 2014 enrollment had to be made through the FFM so that when they returned in 2015, they would be recognized on the FFM database and counted as a renewal. Customers enrolling on the FFM but not recognized on the database are all considered new enrollments regardless of their previous insured or uninsured status. For example, those who lost their 2014 employer sponsored insurance and those who were insured on a state facilitated marketplace 2014 and transferred to the FFM in 2015 are counted as new enrollments or new consumers regardless of the fact that they were previously insured. After week 5 of the open enrollment period the auto re-enrollment period ended and all plans selected beyond that point were considered to be new enrollments aka new consumers.
There is absolutely no distinction made between an uninsured and previously insured individual on the FFM other than recognized renewals, at least not in HHS’s reporting, and this appears to be the way HHS and the Obama Administration wants it to be. The goal of the state and federal healthcare exchanges no longer seems to be to insure the uninsured.
Have the Exchanges Achieve Their Enrollment Goal?
Whether or not the enrollment goal for 2015 has been met depends on ones understanding of what the goal is or at least was.
Here is the forecasted change in uninsured taken directly from Table 1 of the CBO’s May 2013 Estimate of the Effects of the Affordable Care Act on Health Insurance Coverage report {see full report here}:
EFFECTS ON INSURANCE COVERAGE 2013 2014 2015 2016 2017
(Millions of nonelderly people by calendar year)
Change Medicaid and CHP 1 9 12 12 12 Employment-Based 2 * -2 -6 -6 Nongroup and Other * -2 -3 -4 -5 Insurance Exchanges 0 7 13 22 24 Uninsured -2 -14 -20 -25 -25
(Millions of nonelderly people by calendar year)
Change Medicaid and CHP 1 9 12 12 12 Employment-Based 2 * -2 -6 -6 Nongroup and Other * -2 -3 -4 -5 Insurance Exchanges 0 7 13 22 24 Uninsured -2 -14 -20 -25 -25
It’s no coincidence that the enrollment goal originally touted by HHS during
the 2014 enrollment period was 7 million nor is it a coincidence that, before
their last minute revision, the goal for 2015 was 6 million {7+6=13}. These enrollment
targets adopted by HHS were taken directly from the CBO forecast provided to
HHS, at their request, and are indisputably earmarked for the uninsured.
It is important to understand that these enrollment forecasts were also provided to and utilized by insurers who used them in their rate calculations for plans they would offer on the exchanges. With this in mind, it is easy to conclude that any significant shortcoming in the enrollment of the uninsured will have an impact on future rates set by the insurers and possibly even a particular insurer’s participation on the exchanges.
To put a little history to the original intent of the law, we need to look no further than the CBO report prepared for then Speaker Nancy Pelosi in response to her request for spending estimate revisions outlined in H.R. 4872, the Reconciliation Act of 2010, the House Bill that would be voted on and would push the ObamaCare bill forward to final signing by the President. Two excerpts from page 9 of the CBO report make it clear that the goal of the insurance exchange was for 24 million uninsured nonelderly to purchase a healthcare plan through insurance exchanges that would be set up as part of the law {see full report here}:
It is important to understand that these enrollment forecasts were also provided to and utilized by insurers who used them in their rate calculations for plans they would offer on the exchanges. With this in mind, it is easy to conclude that any significant shortcoming in the enrollment of the uninsured will have an impact on future rates set by the insurers and possibly even a particular insurer’s participation on the exchanges.
To put a little history to the original intent of the law, we need to look no further than the CBO report prepared for then Speaker Nancy Pelosi in response to her request for spending estimate revisions outlined in H.R. 4872, the Reconciliation Act of 2010, the House Bill that would be voted on and would push the ObamaCare bill forward to final signing by the President. Two excerpts from page 9 of the CBO report make it clear that the goal of the insurance exchange was for 24 million uninsured nonelderly to purchase a healthcare plan through insurance exchanges that would be set up as part of the law {see full report here}:
the combined effect of enacting H.R. 3590 and the
reconciliation proposal would be to reduce the number of nonelderly people who
are uninsured by about 32 million
and
Approximately 24 million people would purchase their
own coverage through the new insurance exchanges, and there would
be roughly 16 million more enrollees in Medicaid and the
Children’s Health Insurance Program than the number projected
under current law.
The goal to
significantly reduce the number of uninsured through the exchanges is again
emphasized in another CBO analysis produced a year after the law was
enacted. The report was prepared as part
of testimony for a Subcommittee hearing regarding the Affordable Care Act. An excerpt in the summary reads as follows {see full report here}:
In 2021, approximately 24 million people will purchase
their own coverage through insurance exchanges, and Medicaid and the Children’s
Health Insurance Program(CHIP) will have roughly 17 million
additional enrollees, CBO and JCT estimate.
Table 3 in
the same report concludes that 23 million will have obtained insure through the
exchanges by 2017.
These are
just a few examples that make the goal of the healthcare exchanges clear and
indisputable.
Back to Week 11 Enrollment
Here are the enrollment figures HHS has reported for the first 11 weeks of the period:
Week 1 - 462, 125 plans selected, 51% new enrollments
(235,684)
Week 2 - 303,010 plans selected, 49% new enrollments (148,475)
Week 3 - 618,548 plans selected, 48% new enrollments (296,903)
Week 4 - 1,082,879 plans selected, 47% new enrollments (508,953)
Week 5 - 3, 927, 484 plans selected, 17% new enrollments (667,672)
Week 6 - 96,446* plans selected
Week 7 - 102,896* plans selected
Week 8 - 163,050* plans selected
Week 9 - 400,253* plans selected
Week 10 - 137,298* plans selected
Week 11 - 179,710* plans selected
* No distinction between new enrollment and renewals provided
Week 2 - 303,010 plans selected, 49% new enrollments (148,475)
Week 3 - 618,548 plans selected, 48% new enrollments (296,903)
Week 4 - 1,082,879 plans selected, 47% new enrollments (508,953)
Week 5 - 3, 927, 484 plans selected, 17% new enrollments (667,672)
Week 6 - 96,446* plans selected
Week 7 - 102,896* plans selected
Week 8 - 163,050* plans selected
Week 9 - 400,253* plans selected
Week 10 - 137,298* plans selected
Week 11 - 179,710* plans selected
* No distinction between new enrollment and renewals provided
For the 11 weeks reported, there have been 7,473,699 plans selected though the FFM. Based on current enrollment trends, this should bring the cumulative total of both the state and federal marketplaces, for the full open enrollment period, to roughly 10.3 million. If a robust last minute surge in enrollment were to occur it would come as no surprise if as many as 11 million plans were selected before the marketplaces close their doors on 2015 shoppers.
As for the number of uninsured that are expected to show up for the party, there is reasonable disagreement between the My Daily POV model and what is being projected by HHS, neither of which comes close to the original CBO projection of 6 million.
How Many Uninsured Will Gain Healthcare Coverage Through the Marketplaces?
Just how many of America’s uninsured nonelderly population will have gained healthcare coverage through the state and federal marketplaces this open enrollment period will depend largely on who you ask. If last year is any indication, we should not hold our breath waiting for HHS to release a breakdown of the enrollment figures but then again, under the new leadership of Secretary Sylvia Burwell, HHS has been a great deal more forthcoming with information, lest we forget however, that the White House still controls the puppet strings.
HHS has not provided an actual figure as to the number of uninsured they predicted to gain healthcare coverage through the marketplaces this open enrollment period however, they have eluded to it in a round about way, without committing to an actual figure.
HHS has broken away from using the CBO forecast as their target and instead have developed their own “bottom-up” methodology in predicting enrollment. The fundamentals behind their newly adopted methodology are described in a report they issued just days before the 2015 open enrollment period started {see full report here} in which HHS also disclosed their lowered enrollment projection of 9.1 to 9.9 million for the period. This projection of course includes all renewals, transfers and newly insured marketplace customers.
A hint of what HHS expects in the way of enrollment by the uninsured is given in this excerpt taken directly from the report {see bottom of page 4 and top of page 5}:
HHS’s analysis implies that most of
the new Marketplace enrollment for 2015 is likely to come from the ranks of the
uninsured, with approximately three or four previously uninsured new enrollees
for each new enrollee drawn from the ranks of those who previously had
off-Marketplace individual coverage.
In other words, for every 1 off-marketplace transfer to one of the state and
federal marketplaces, HHS is concluding that an additional 3 to 4 of American’s
uninsured would sign up for a qualified healthcare plan through the exchanges
as well.
This is a pretty ambitious claim being made by HHS and one that prompted some digging into the numbers. And while anything is possible, what a little number crunching revealed was that the chances of HHS’s claim to come to fruition are slim to none, siding heavily to the side of none.
Starting with the lesser side of the claim, that for every 1 transfer 3 uninsured would enroll through the marketplace, based on the current rate of enrollment, the number of renewals reported and the know number of off-exchange transfers that will affect 2015 marketplace enrollment, for the HHS claim to hold water the following would have to occur:
This is a pretty ambitious claim being made by HHS and one that prompted some digging into the numbers. And while anything is possible, what a little number crunching revealed was that the chances of HHS’s claim to come to fruition are slim to none, siding heavily to the side of none.
Starting with the lesser side of the claim, that for every 1 transfer 3 uninsured would enroll through the marketplace, based on the current rate of enrollment, the number of renewals reported and the know number of off-exchange transfers that will affect 2015 marketplace enrollment, for the HHS claim to hold water the following would have to occur:
·
Total
enrollment would have to reach a minimum of 11.6 million, an increase of almost
1.7 million in the final two weeks.
·
The
very least number of expected off-exchange transfers would have to occur.
·
A
2014 retention rate of 100% must be achieved.
HHS however predicts only 83% retention of 2014 marketplace enrollments.
It is
unlikely that any of the above listed is achievable much less all three. Where
it appears HHS may have failed the most in their projection is in accurately quantify
the number of off-exchange transfers which looks as though they have completely
ignored in their bottom-up projection.
If HHS’s 3 for every 1 prediction were to be correct, the current low ball estimate of off-exchange transfers would have the number of uninsured obtaining a qualified healthcare plan through one of the marketplaces at 4 million with the total number of plans selected at 11.6 million, neither number of which is believed to be achievable. And if we use the more realistic off-exchange transfer figure, the uninsured enrollment rate would rise to 4.3 million and the total number of plans selected would be well in excess of 12 million. Unless HHS is making the assumption that a large percentage of those losing their off-exchange healthcare plans will chose to remain uninsured, an act that is counterproductive to the goal of ObamaCare, the model used by HHS to predict 2015 enrollment appears to be highly flawed.
As for HHS’s 4 for every 1 prediction, this would require that no off-exchange transfers take place or a total enrollment figure so high that it would be impossible to achieve.
The flawed HHS model is unable to provide a reasonable answer to the question of how many uninsured will gain healthcare coverage through the marketplace this open enrollment period so let’s consider the other model.
If HHS’s 3 for every 1 prediction were to be correct, the current low ball estimate of off-exchange transfers would have the number of uninsured obtaining a qualified healthcare plan through one of the marketplaces at 4 million with the total number of plans selected at 11.6 million, neither number of which is believed to be achievable. And if we use the more realistic off-exchange transfer figure, the uninsured enrollment rate would rise to 4.3 million and the total number of plans selected would be well in excess of 12 million. Unless HHS is making the assumption that a large percentage of those losing their off-exchange healthcare plans will chose to remain uninsured, an act that is counterproductive to the goal of ObamaCare, the model used by HHS to predict 2015 enrollment appears to be highly flawed.
As for HHS’s 4 for every 1 prediction, this would require that no off-exchange transfers take place or a total enrollment figure so high that it would be impossible to achieve.
The flawed HHS model is unable to provide a reasonable answer to the question of how many uninsured will gain healthcare coverage through the marketplace this open enrollment period so let’s consider the other model.
A Simpler Uninsured Enrollment Prediction
The My Daily
POV enrollment model (the model) takes a very simplistic approach in predicting
the number of uninsured that will purchase a qualified healthcare plan through
the state and federal marketplaces this open enrollment period.
The model does not consider the results of numerous studies, enrollment by age demographic or any number of other statistics that are considered in the HHS approach, the model instead relies only on enrollment data, largely provided by HHS, along with a small number of fair and well supported assumptions that have a direct impact on enrollment. Unlike HHS, which had the misfortune of having to devise a method of predicting what the future held for enrollment, the My Daily POV model is a work in progress and improves with each week’s enrollment report as well as other aspects of enrollment we may learn and can be used to improve the fortune telling of the model.
With 11 weeks reported and at the current enrollment rate the model projects that the final cumulative number of plans selected will surpass 10.3 million. After accounting for renewals, off-exchange transfers and adjusting for attrition, the resulting number of uninsured gaining healthcare coverage through the marketplaces is predicted to be no more than 1.5 million.
What is not considered in the prediction just stated is a surge in enrollment that will likely occur in the closing weeks and days of the open enrollment period. To what degree the surge in enrollment will be is unknown but if we assume that week 12 enrollment will be 50% greater than week 11 and the final week 100% greater than week 12, then the model projects just over 11 million plans will be selected and the number of uninsured that will obtained a qualified healthcare plan through one of the exchanges will number between 1.4 and 2.2 million. The large disparity in the projection number of uninsured obtaining a healthcare plan stems from the number of off-exchange transfers that can be confirmed with a reasonable degree of certainty verses an unconfirmable but more realistic number of off-exchange transfers.
The model does not consider the results of numerous studies, enrollment by age demographic or any number of other statistics that are considered in the HHS approach, the model instead relies only on enrollment data, largely provided by HHS, along with a small number of fair and well supported assumptions that have a direct impact on enrollment. Unlike HHS, which had the misfortune of having to devise a method of predicting what the future held for enrollment, the My Daily POV model is a work in progress and improves with each week’s enrollment report as well as other aspects of enrollment we may learn and can be used to improve the fortune telling of the model.
With 11 weeks reported and at the current enrollment rate the model projects that the final cumulative number of plans selected will surpass 10.3 million. After accounting for renewals, off-exchange transfers and adjusting for attrition, the resulting number of uninsured gaining healthcare coverage through the marketplaces is predicted to be no more than 1.5 million.
What is not considered in the prediction just stated is a surge in enrollment that will likely occur in the closing weeks and days of the open enrollment period. To what degree the surge in enrollment will be is unknown but if we assume that week 12 enrollment will be 50% greater than week 11 and the final week 100% greater than week 12, then the model projects just over 11 million plans will be selected and the number of uninsured that will obtained a qualified healthcare plan through one of the exchanges will number between 1.4 and 2.2 million. The large disparity in the projection number of uninsured obtaining a healthcare plan stems from the number of off-exchange transfers that can be confirmed with a reasonable degree of certainty verses an unconfirmable but more realistic number of off-exchange transfers.
The Success of the Marketplace Put In Perspective
From the pool of 38 million uninsured Americans eligible for marketplace plans
this year, the best we are likely to see is this number shrinking by roughly 2
million.
On the outside, our current projection of 10.3 plans being sold through the state and federal marketplaces looks like a success and will be portrayed as such by the administration and the liberal media. However, of those plans sold, 6.5 million can be attributed to plan renewals and another 1.7 million to off-exchange transfers, the majority of which originate from employer sponsored healthcare insurance program cancelations. The Daily POV model also predicts a worst case scenario where fewer than 1 million uninsured participate on the exchanges this year but let’s be optimist and hope this not to be the case.
Similar results were experience during the 2014 open enrollment period where over 5 million plans purchased were the result of off-exchange transfers on to the state and federal marketplace. The 2014 open enrollment period yielded as few as 1.4 million uninsured obtaining a qualified healthcare plans through the exchanges.
On the outside, our current projection of 10.3 plans being sold through the state and federal marketplaces looks like a success and will be portrayed as such by the administration and the liberal media. However, of those plans sold, 6.5 million can be attributed to plan renewals and another 1.7 million to off-exchange transfers, the majority of which originate from employer sponsored healthcare insurance program cancelations. The Daily POV model also predicts a worst case scenario where fewer than 1 million uninsured participate on the exchanges this year but let’s be optimist and hope this not to be the case.
Similar results were experience during the 2014 open enrollment period where over 5 million plans purchased were the result of off-exchange transfers on to the state and federal marketplace. The 2014 open enrollment period yielded as few as 1.4 million uninsured obtaining a qualified healthcare plans through the exchanges.
In Conclusion
At the close of the 2015 open enrollment period the law’s original goal to have reduced the number of uninsured nonelderly American’s who were eligible to participate on the marketplaces by 13 million will likely fall short by 10 million. This leaves little if any doubt that reducing the eligible pool of uninsured nonelderly Americans by 24 million, as has been the intended purpose of the marketplaces from the start, will never come close to being successful.
Unless a miracle takes place over the final days of enrollment, it should be clear now that the insurance marketplaces established by the ObamaCare law are a complete and abysmal failure. After two rounds of open enrollment, they will have accomplished little more than to have moved the already insured from one marketplace to another while hardly putting a dent in the number of the uninsured eligible to participate on the stated and federal marketplace’s. Even with the incentive of federal subsidies and the threat of penalty, the vast majority of American’s uninsured are simply not interested in ObamaCare.
No comments:
Post a Comment