How many of the Uninsured will ObamaCare Really Insure?

“I don’t have to explain to you that nearly 46 million Americans don’t have health insurance coverage today.  In the wealthiest nation on Earth, 46 million of our fellow citizens have no coverage.”  -  President Obama, August 2009

That same year, the Census Bureau reported that 48 million Americans lacked health insurance.

While the issue of affordability can be argued, the fact that ObamaCare did and continues to provide “access” to healthcare for those 48 million uninsured Americans remains true.  However, it was, is and will continue to be unrealistic to believe that the majority of those 48 million will ever actually gain any form of healthcare insurance coverage simply because it is mandated by law.

Yes, there has long been a group of Americans who have been denied or could not afford wanted healthcare insurance but this group makes up small fraction of the 48 million who were uninsured prior to the passage of ObamaCare.  The larger portion of that 48 million uninsured choose to opt-out of purchasing healthcare insurance on their own accord and have since shown to be just as unlikely to purchase healthcare insurance under mandate of law as the were prior to ObamaCare being enacted.

 

The Financially Secure “Opt-Outs”

Roughly 20% of the 48 million who have, in the past, chosen to “opt out” of purchasing healthcare insurance come from a group of hard-working, tax paying Americans who are financially secure.  This group of the uninsured has never been denied affordable healthcare insurance nor do they place a financial burden on the healthcare system.  This group “chooses” to pay for their healthcare needs “out of pocket” and, as a result, do not find themselves running to the doctor’s office every time they have a sniffle or a headache, a common abuse by those who have healthcare insurance.

Numbering nearly 10 million, the financially secure opt-outs have taken a much more cost effective approach to manage their own healthcare needs and, as we have experienced over the past two open enrollment periods, continue to opt-out of purchasing a traditional healthcare plan despite the federal mandate to do so.

 

The Young Invincibles

Numbering around 19 million, the young invincibles make up about 40% of the 48 million, as reported by the Kaiser Family Foundation.  While a significant portion of the uninsured, they are in large very healthy thus finding little need for healthcare insurance prior to the implementation of the new healthcare law.  Little has changed in the age of ObamaCare as this group has shown little desire to bear the bulk of the burden for the older and less healthy, by paying a disproportionate amount for healthcare insurance, a key component of the ObamaCare law. 

Like the financially secure opt-outs, this large group of the uninsured has never been denied affordable healthcare insurance.  Their insured counterparts, including hundreds of thousands of college and university students, typically took advantage of low cost “bare-bones” insurance plans that were both affordable and well suited to their particular need.  However, under ObamaCare, these well suited bare-bones healthcare plans are a thing of the past.

For those under the age of 26, the problem ObamaCare created by putting an end to the well suited catastrophic plans was mitigated though a provision in the law that allows these sub-26ers to remain on their parents insurance plans.  This provision in the law is said to have increased the number of insured sub-26ers by about 3 million, according to HHS.  For the balance of the uninsured young invincibles, they were left to purchased healthcare either from the private marketplace or though one of the state and federal healthcare exchanges.  To date, very few have done so.  They are still young, invincible and see little need to spend a large portion of their meager income on insurance that they do not believe they need.

 

Those Living in the Shadows

The homeless, addicts and other small groups of American’s that sadly live in the shadows of our society make up about 15% or roughly 7 million of the uninsured.  Most of these individuals have long been eligible for some form of healthcare assistance but for whatever reason most have chosen not to or have been unable to capitalize on these offerings.  However, since the HealthCare.gov website was launched about half of those living in the shadows have come out of the “woodwork” and have enrolled on to Medicaid.
 

Pre-Existing Conditions

Amongst the 48 million there are those that have, in the past, been denied insurance due to a pre-existing condition.  The Obama Administration did a masterful job at misleading the American people into believing that their numbers ran into the millions when in fact the number is actually quite low. 

In lieu of the “guaranteed issue” that went into effect on January 1, 2014 which no longer allows insurers to discriminate against a person having a pre-existing condition, the Pre-existing Conditions Insurance Plan (PCIP) provision was put in place.  The PCIP was a stop gap that made insurance available to high risk individuals with a pre-existing condition almost immediately after ObamaCare was passed in to law back in 2010. 

When the PCIP was being crafted, it was estimated that no more than 375,000 high risk individuals that would seek enrollment.  This, in addition to roughly 200,000 that were actively participating on 35 state operated High Risk Pools (HRP), brought the number of individuals in the pool of those with a pre-existing condition and possibly seeking healthcare insurance to 575,000.  Yet, of the 375,000 estimated to participate in the PCIP, less than one third or about 1/4 of 1% of the 48 million, enrolled on to the PCIP bringing the number of individuals with a pre-existing condition and seeking healthcare insurance to just over 300,000.  That’s a far cry from the millions the president had been touting.

 

The Semi-Low Income “Opt-Outs”

The balance of the 48 million are made up of the semi-low income “opt-outs”.  Prior to the passage of ObamaCare, this pool of about 12 million fell in to a grey area where their income was too high to qualify for Medicaid yet two low to be able to afford healthcare insurance without giving up basic necessities to live.  This created a forced healthcare insurance opt-out situation.

The expansion of Medicaid eligibility criteria has opened the door for these 12 million people, most all of which have or are expected to take advantage of the Medicaid Expansion.
 

The Numbers Fit

Of the 48 million who were uninsured when ObamaCare was passed in to law it looks as though as many as 18.5 million have or will eventually seek out healthcare insurance, mostly through the Medicaid Expansion.  The remaining 29.5 million look as though they will continue to opt-out of purchasing a qualified healthcare plan for a variety of reasons.

As for those who will continue to opt-out of purchasing a qualified healthcare plan, just as they have done in the past, the majority of the financially secure opt-outs will remain responsible for their own healthcare costs.  As well, the bulk of the young invincibles will remain healthy and without the need of costly healthcare insurance.  Those living in the shadows who remain uninsured of course will continue to be a financial burden on the healthcare system.

 

What about those Uninsured with a Pre-existing Medical Condition?

The question remains unanswered as to exactly how successful ObamaCare has been in insuring the pool of people with a high cost/high risk pre-existing medical condition and if the performance of the PCIP is any indication, the law is not helping near as much as is being claimed.

The PCIP attracted only 36% of the 375,000 participants as originally projected and over its short lifespan lost 23% of its 135,000 peak enrollment in its final year, despite rate reductions of 20%.  Additionally, 20% of PCIP enrollees failed to transfer to one of the state and federal healthcare exchanges before the PCIP provision expired, even after three extensions were granted for them to do so.

It’s hard to imagine HHS over projecting, by nearly 300%, the number of individuals with a pre-existing condition that were in need of healthcare insurance.  Even if the over projection was only 200%, this would still mean that 135,000 individuals with a pre-existing condition opted-out of the PCIP provision, this in addition to the 31,000 documented attrition and the additional 20,000 that did not transfer over to the healthcare exchanges. 

But there is no real way in knowing exactly how well those with a pre-existing condition are currently being treated by the ObamaCare law.  First, we are unsure as to exactly the number of individuals with a pre-existing condition that ObamaCare could have effected and second, there is no mechanism in place to determine a person enrolling on the healthcare exchanges was one of those individuals.  And what about the states that ended their HRP programs, how many of their enrollees found their way and purchased a healthcare plan through the healthcare exchanges?  There is no way of knowing for sure.

Eventually some group will do a study to try and determine just how many of those with a pre-existing condition ObamaCare is actually helping but for now, it looks as though far fewer are being helped that the Obama Administration would like us to believe.

 

The 2016 Open Enrollment Period Will Soon Be Upon Us

The third ObamaCare open enrollment period is just around the corner and this is a make or break for ObamaCare.

Over the 9 months that made up the first two open enrollment periods the healthcare exchanges managed to attract only about 3 million customers from the nation’s pool of the non-elderly, long term uninsured, a 70% shortfall from projection.  This leaves a lot of ground to make up in addition to another 6 million uninsured that were projected to enroll through the exchanges in 2016. 

Reaching the laws 2016 goal of reducing the number of uninsured by 16 million, through the purchase of a qualified healthcare plan, is a virtually insurmountable task, achieving even 50% of the goal looks to be out of reach.  But we must go through the motions and after the open enrollment period ends endure the countless ways the Obama Administration will try and defend an unpopular law that continues to fail to meet one of its primary objectives by a significant margin.