Just before Christmas, the
Department of Health & Human Services (HHS) released the ObamaCare Week 5
enrollment figures, in their HHS blog, and the numbers
look pretty impressive.
The week of December
13 through 19 drew almost 4 million individuals selecting a healthcare plan on the
federal healthcare exchange, 3,927,484 to be exact, bringing the total number
of those selecting a plan during the first 5 weeks of the 2015 open enrollment
period to just under 6.4 million.
So let’s take a look at the numbers and see how they stack up against Week1, Week 3 and Week 4.
Turning Oranges into Apples
Just as we did in the previous weeks, we will have to take the total number of selected plans on the federal exchange and make it more reflective of nationwide enrollment. The one thing we will do different than in previous weeks is we will us the week 5 totals instead of the accumulative total. The reason for this is due to a significant change in the percentage of new and returning customers during week 5 as compared to previous weeks.
As the federal exchange enrollment accounts for 73% of the 50 states and DC, increasing the number who selected insurance plans on the federal exchange by 27% will give us a fair representation of the total number of plans selected on the state and federal exchanges nationwide. In doing so, the number of those who selected a plan during week five yields a total just shy of 5 million.
With just under 5 million plans selected, next we will need to determine how many of those plans were “new” selections verses those made by returning customers. The HHS blog indicates that during week 5, 17% of the plans selected were made by new customers which equates to about 848,000 selections.
Last we need to factor in attrition. As we did in previous weeks, we will use the 2014 attrition rate of 17% brining us to a week 5 projected new customer enrollment of 704,000, more than double that of previous weeks.
Reasons Behind the Boom in Enrollment
So let’s take a look at the numbers and see how they stack up against Week1, Week 3 and Week 4.
Turning Oranges into Apples
Just as we did in the previous weeks, we will have to take the total number of selected plans on the federal exchange and make it more reflective of nationwide enrollment. The one thing we will do different than in previous weeks is we will us the week 5 totals instead of the accumulative total. The reason for this is due to a significant change in the percentage of new and returning customers during week 5 as compared to previous weeks.
As the federal exchange enrollment accounts for 73% of the 50 states and DC, increasing the number who selected insurance plans on the federal exchange by 27% will give us a fair representation of the total number of plans selected on the state and federal exchanges nationwide. In doing so, the number of those who selected a plan during week five yields a total just shy of 5 million.
With just under 5 million plans selected, next we will need to determine how many of those plans were “new” selections verses those made by returning customers. The HHS blog indicates that during week 5, 17% of the plans selected were made by new customers which equates to about 848,000 selections.
Last we need to factor in attrition. As we did in previous weeks, we will use the 2014 attrition rate of 17% brining us to a week 5 projected new customer enrollment of 704,000, more than double that of previous weeks.
Reasons Behind the Boom in Enrollment
Enrollment during
week 5 has certainly been robust and leaves little doubt that new enrollment will
surpass the significantly lowered goal of putting a qualified healthcare plan
in the hands of an additional 2 million uninsured Americans, a goal revised by
the Obama Administration. But let’s not
throw a victory parade just yet as enrollment is still on target to fall well
short of the original forecast of 6 million to which the fiscal viability of
the law was built around.
The week 5 enrollment surge was both predicted and temporary. Facing significantly higher penalties than last year, many of the uninsured who opted out of obtaining healthcare insurance in 2014 found themselves compelled to adhere to the federal mandate which subsequently drove them to the exchanges in order to beat the December 15th deadline required for January 1st coverage. The penalty increase for not having insurance in 2015 vs. 2014 jumped from $100 to $325 per individual and from 1% to 2% of the household income for families.
Another group that wished to beat the December 15th deadline were those who received an insurance cancelation notices in the mail. The number of non-ACA compliant cancelations sent out this year is claimed to be significantly lower than what was experienced in 2013 but still number in the hundreds of thousands. We will not know the exact number until some independent group performs a study as HHS not likely to produce this information for public consumption.
An anomaly that accounts for at least part of the last minute surge in enrollment comes from those who purchased qualified healthcare plans through the Oregon and Nevada healthcare exchanges last year. Both of these states have thrown in the towel trying to fix their states exchanges and have instead moved over to the federal exchange, bringing with them roughly 100,000 customers in total. While these customers are actually renewals, they are recognized as “new” on the federal exchange and therefor counted as such by HHS.
And with the temporary surge of enrollment now in the rear view mirror, we can expect to see a sharp drop in enrollment, likely much lower than what has been experienced in the earlier weeks.
ObamaCare Renewals
The largest portion of the
2015 sign-ups are being made by those renewing or replacing their plans
purchased through the healthcare exchanges last year. The week 5 enrollment surge was both predicted and temporary. Facing significantly higher penalties than last year, many of the uninsured who opted out of obtaining healthcare insurance in 2014 found themselves compelled to adhere to the federal mandate which subsequently drove them to the exchanges in order to beat the December 15th deadline required for January 1st coverage. The penalty increase for not having insurance in 2015 vs. 2014 jumped from $100 to $325 per individual and from 1% to 2% of the household income for families.
Another group that wished to beat the December 15th deadline were those who received an insurance cancelation notices in the mail. The number of non-ACA compliant cancelations sent out this year is claimed to be significantly lower than what was experienced in 2013 but still number in the hundreds of thousands. We will not know the exact number until some independent group performs a study as HHS not likely to produce this information for public consumption.
An anomaly that accounts for at least part of the last minute surge in enrollment comes from those who purchased qualified healthcare plans through the Oregon and Nevada healthcare exchanges last year. Both of these states have thrown in the towel trying to fix their states exchanges and have instead moved over to the federal exchange, bringing with them roughly 100,000 customers in total. While these customers are actually renewals, they are recognized as “new” on the federal exchange and therefor counted as such by HHS.
And with the temporary surge of enrollment now in the rear view mirror, we can expect to see a sharp drop in enrollment, likely much lower than what has been experienced in the earlier weeks.
ObamaCare Renewals
At the close of week 5, approximately 5.7 million renewals were selected and there is little reason to believe that the majority of the renewals will not advance and become full and paid for enrollments. There does seem to be some concern from within the Obama Administration however, that this may not be the case.
Fearing that those who selected the auto-renewal feature in 2014 may be surprised by premium increases and subsequently cancel their plans, HHS and the president himself have been encouraging those who are set-up for auto-renewal to still take the time to visit their exchange and shop for better deals. Most concerning by the administration are those who have the low tier Silver plans. These plans are by far the most popular and as well have experienced the greatest rate hikes.
To Sum It All Up
The surge to get enrollment before the December 15th deadline occurred just as expected and if the trend follows that of 2014, enrollment will decline significantly until the closing minutes of the 2015 enrollment period.
As for how enrollment my finally play out, it is pretty hard to tell at the moment however, it is fairly safe to say that new enrollment of the uninsured nonelderly should easily exceed the lowered bar of 2 million. How much it will exceed the lowered projection would be pure speculation but my less than scientific number crunching will call the final tally someplace between 3.1 and 3.5 million which is significantly less than the 6 million needed to help ensure the fiscal wellbeing of the struggling healthcare law.
If my projection comes to fruition, ObamaCare will have placed a qualified healthcare plan in the hands of roughly 8 million uninsured nonelderly since the opening of the healthcare exchanges in October of 2013. That is a 38% shortfall or 5 million shy of the 13 million uninsured the Obama Administration once claimed ObamaCare would have insured by 2015. This leaves an awful lot of ground to make up if the Obama Administration still expects to hold to its word of putting a qualified healthcare plan in the hands of 24 million uninsured Americans by 2017.
The number of those renewing their 2014 healthcare plans looks really good. At the end of week 5, enrollment renewals are only 1 million shy of the 2014 enrollment which is a strong indication that most who purchased a qualified healthcare plan through one of the state and federal healthcare exchanges will do so again this year.
UPDATE: 12/30 4:10pm pst
HHS just released the Week 6 enrollment numbers. Week 6 yielded the lowest number of new plans selected in any week and by a significant amount. More alarming however, is that for the first time since they began reporting enrollment figures, HHS failed to differentiate the percentage of new verses renewed plans. HHS claims that the data was not available at the time of release however, if history is any indicator, the information is likely being withheld as the news does speak well for new enrollment. Time will tell if they reveal the information or not.
And a quick crunching of the numbers, using the same factors as has been used in past weeks, and assuming all selected plans reported for week 6 are new enrollments, I arrived at a 6 week accumulative total enrollment of just over 2 million.
It must be noted that week 6 did fall in the middle of the Christmas Holiday week so this would attribute to a lower enrollment turn out. A sharp drop in enrollment was also expected, having passed the December 15 enrollment deadline to be insured by January 1st.
After a quick review of the numbers. I stand by my prediction of a final new enrollment between 3.1 to 3.5 million although I am leaning to the lower side of this prediction. It also should be noted that the new enrollments include those who may have been formerly insured and transferred to the healthcare exchanges after having their insurance policy canceled.
HHS has just released the Week 6 enrollment figures. I added a short updated to the blog that addresses week 6 enrollment.
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