Republicans Do Not Need a Replacement for ObamaCare

There mere fact that Democratic Lawmakers are constantly asking the question, “Where is the Republican plan?” tells the world that they are worried about the fate of ObamaCare and this has been going on long before King v Burwell took center stage.

Look, ObamaCare was not a Republican idea and the few Republicans that did support some of the very very early drafts quickly abandoned ship when they saw the direction their democratic counterparts where heading with the bill.

ObamaCare did not replace any other legislation, there was no broken reform law on the books prior to ObamaCare that it replaced.  And let’s not forget the passage of ObamaCare not only came with nationwide opposition but was passed with ZERO Republican support.

After the initial attempts at creating new healthcare legislation, the process became a pure partisan, behind the doors process so much so that a large portion of the legislation was specifically crafted to block the Republican’s ability to filibuster the bill.  How could this approach have any possibility of creating good reform?

The bill faced major opposition, not just from Republican Lawmakers, but from business professionals, industry experts, medical professionals and hard-working, tax paying Americans from one end of the country to the other.  There has not been a more contentious issue put before the people in decades nor have so many people ever been so engaged in defeating a bill.  The people voiced their opposition, aired their grievances and displayed their lack of support for the bill at countless town hall meetings, hundreds of thousands of letters, petitions, organized protest and through thousands of opinion polls, none of which has ever indicated a majority in favor of the law.  

And yet, the president moved forward and signed the highly controversial, vastly unpopular and purely partisan bill that passed the Democratic controlled House and Senate using unethical practices and last second, bill saving rule changes.  There was nothing that spoke in favor of this major piece of legislation, legislation that would adversely affect the lives of exponentially more people than it would help.

And everything that Republicans were concerned about, warned about and fought to prevent has come to fruition.

No, sir, Republicans have no need or obligation to come up with a replace for ObamaCare, this mess is on President Obama and the Democratic Lawmakers that rammed this poorly written and disastrous piece of partisan legislation down the throats of Americans.

And how about those millions who now have some form of healthcare coverage which will be taken away from them if in fact ObamaCare is repealed of fails on its own, what happens to them?  Maybe it’s time that Democratic Lawmakers start devising a plan B for this scenario as it was they who thought it wise to bundle the Medicaid Expansion into a massive and complex piece of legislation that they knew would face a fight to have it repealed the moment it was passed in to law, not to mention the Supreme Court challenges it was certain to face.  It’s almost as if it was the Democrat’s intention to include the Medicaid expansion into the law to serve as some sort of human shield so to speak, now putting millions of individual’s newly found healthcare in jeopardy.  Again, this was not a Republican idea, this falls flat in the laps of Democrats and President Obama.

Democrats really F’d this one up.  They threw every ounce of their support behind an unproven president and his desire to create a legacy for himself, created the largest social entitlement program seen in half a century and allow it to move forward on a pure party line vote.  ObamaCare is the single act that set the political tone for Obama’s entire presidency and it’s not been a good tone.  ObamaCare was unliked by the majority as a bill and has been a never ending divide between the parties for nearly 6 years now.

It’s on the president and his party to come up with a replacement to ObamaCare, they can’t pass the buck and hold Republicans responsible for this mess, this is all on them!

The Reason Democrats Think ObamaCare is Working

On March 9th the Congressional Budget Office (CBO) released its latest budget projections which included updated estimates for ObamaCare.

If you were to believe what has been written by the vast majority of the mainstream media reporting on the findings contained in the CBO report, you would in fact think that ObamaCare is a grand success.  For example:

 

LA Times Article starts  -  Five years after Obamacare became law, the projected costs continue to tumble, according to the nonpartisan report released Monday.

Costs of providing healthcare under the Affordable Care Act are projected to be almost one-third less than what had been anticipated by the Congressional Budget Office in 2010.  By 2019, the costs are expected to be 33% less than forecast.

CNBC article starts  -  Going down: CBO says Obamacare costs set to fall  -  The sky actually wasn’t falling when Obamacare began, but its costs apparently are now.

Congressional Budget Office on Monday said it expects the federal government will spend significantly less on Obamacare than had been projected.

The Washington Post article starts  -  Obamacare’s projected cost falls due to lower premiums under health care law.  CBO says  -  The estimated cost of President Obama’s signature health care law is continuing to fall.

 
Here lies the problem that has surrounded President Obama’s signature healthcare legislation since before it became a law. 

There is no denying that mainstream news agencies are overwhelmingly left leaning however, what most on the left fail to realize, or maybe choose to ignore, is that most of these agencies have chosen to compromise journalistic integrity in order to protect a liberal/progressive ideology.  More so, these same news sources willfully take advantage of reader/viewer apathy which allows them to spin facts unchecked.  Nothing could be a finer example of how the liberal media protects their ideology than how they report on ObamaCare!

Let’s take an article from the more conservative Washington Times (WT), published at the same time and on the same subject matter as the above mentioned articles for example.

The opening paragraph of the WT article is in sharp contrast to those shared above in pointing out one of the major pitfalls that consumers of ObamaCare will soon have to face:

Obamacare exchange customers are about to see spikes in their premiums, the Congressional Budget Office predicted Monday, saying insurers that offer plans are facing twin pressures from the government and the marketplace that will mean hikes of more than 8 percent a year through 2018.

The article does not however explain the reasons behind the forthcoming spike in premiums so the revelation will be passed over by readers without a thought.  As for the reasons, they will be addressed in a moment.


The third paragraph in the WT article goes on to promote enrollment on the exchanges during the second open enrollment period:

Nearly 11.7 million Americans bought plans on the exchange in the second enrollment period, Health and Human Services Secretary Sylvia Mathews Burwell announced Monday afternoon, hours after the CBO’s analysis was released.

What this paragraph fails to mention is the make-up of the 11.7 million.  As well, if this is a verbatim quote from Burwell, she is misrepresenting the figure which accounts for the number of Americans included on plans that have been “selected” and by no means accounts for the number of plans that have actually been purchased and paid for.  Here is a better look at the make-up of those 11.7 plans selected:

Total plans selected (2015 open enrollment period)  11.7 million
Plan renewals (from 2014)                                         5.9 million
Attrition (as projected by HHS)                                   1.0 million
Known transfers (from other marketplaces)                2.5 million
Plans purchased by uninsured                                2.3 million

That’s right, only 2.3 million uninsured showed up to the ObamaCare exchanges to purchase a qualified healthcare plan in 2015.  The balance of the 11.7 million who enrolled through the ObamaCare exchanges were already insured or will fall to attrition.  That 11.7 million does not look so impressive now does it, and why aren’t all the enrollment figures reported?


The following couple of paragraphs, from the WT article, address premiums but are not very forthcoming in explaining why premiums are expected to rise so sharply:

The CBO said premiums for the key “benchmark” exchange plans will rise an average of 8.5 percent per year from 2016 to 2018, faster than the rest of the health care market.

The budget analysts said part of the reason is that the plans offered now are narrower than private plans and reimburse providers at lower rates. They said both trends probably will change, forcing insurers to raise premiums.
           

You may or may not recall, but at the close of the 2014 open enrollment period, using similar models to what insurance companies use, industry experts warned of skyrocketing premiums heading our way in 2015.  The projected increases were due mainly to an unexpectedly low turnout of the uninsured {1.4 million} which insurers were counting on as new customers.

The news of skyrocketing rates sent a shockwave through the White House and had both the Department of Health and Human Services (HHS) and the president scrambling to do damage control as well as to come up with a fix.  Damage control was easy, simply float a story that the claims are skyrocketing premiums was drummed of by republicans, the fix on the other hand was a bit more difficult and required negotiation directly between insurers and the president.

Fearing a stronger pushback by republicans to repeal his signature healthcare law, the president pleaded with insurers to hold down 2015 premiums and in exchange he gave his assurance that they would be compensated for any losses realized by doing so.  Insurers did the best they could in holding premiums down for 2015 by pushing their risk to the ragged edge as well as passing on a portion of the increases to plan deductibles.

But with another low turning of the uninsured during the 2015 open enrollment period, the CBO recognized that insurers will have no choice but to start raising premiums especially since the risk-corridors provision will end at the close of 2016 at which time insurers will no longer have any protection from losses.

If the CBO projections stand, this will mean a five year string of rate increases to the individual healthcare insurance marketplace that surpasses the increases that were being realized in the marketplace pre-ObamaCare.

In the next paragraph of the WT article makes the point of health care costs being lower than expected, as reported by the CBO, but provides no explanation as to why:

Overall, the CBO said, health care costs for the government and for private consumers are lower than expected just a few years ago. That means Obamacare is less expensive than predicted when the Affordable Care Act was enacted in 2010, though it’s covering fewer Americans than President Obama hoped.

The last sentence of this paragraph tells most of the story.  Of course the projected cost of ObamaCare is going down, far fewer have signed up for the healthcare law than originally projected meaning that fewer people will be receiving subsidize.   But there is more to the lower cost than just low enrollment, the other part of the equations is ‘who' is signing up.

The make-up of the pool of people purchasing qualified healthcare plans through the ObamaCare exchanges is significantly different than what was originally projected during the crafting of the law.  Contributing to the lowered cost the most is the low turnout of the uninsured, a group which was anticipated to be highly subsidized.  With participation of this uninsured group being only one third that of what was originally projected, the drop in the amount of subsidies being paid out is significant. 

The much larger group that is purchasing healthcare insurance through the ObamaCare Exchanges is a group of individuals that were previously insured and transferred over from another marketplace.  This group is three fold larger than projected and on average, consumes significantly less subsidies again lowering the overall cost of ObamaCare.

The slower growth rate in the cost of health care has also attributed to the lower cost of ObamaCare however, the slowdown has been linked to the recession and slow economic recovery and has little if anything to do with ObamaCare, a fact that the CMS actuary agrees with.

In truth, the lower cost of ObamaCare being reported is an admission of failure as it is driven primarily by low uninsured participation and a much higher transfer rate of the already insured than projected.


The very next paragraph of the WT article pretty much sums up the reason for the misconception that ObamaCare is working by those more inclined to take the word of our government officials than question them:

Ms. Burwell said the law is working as intended, and she urged the Supreme Court not to invalidate the way the administration pays subsidies. Cutting off the tax payments would harm millions of Americans who “need, want and like” the plans they’ve bought, she said.

“The simple truth is that millions of Americans in all 50 states rely on the Affordable Care Act for tax credits to buy insurance,” she said.

Is the law really working as intended?  Not by a long shot.

A full year after ObamaCare was passed into law, the house subcommittee of the Health Committee on Energy and Commerce held a congressional hearing, a part of which included written testimony from the CBO in the form of a report on the effects of ObamaCare. 

In the summary of the report, the CBO including the following estimates as to the effect ObamaCare was projected to have on healthcare coverage once fully implemented:

CBO and JCT estimate that PPACA and the Reconciliation Act will increase the number of nonelderly Americans with health insurance by about 32 million in 2016 and about 34 million in 2021. About 95 percent of legal nonelderly residents will have insurance coverage in 2021, compared with a projected share of about 82 percent in the absence of that legislation (and an estimated 83 percent currently). 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.

 

 
The estimates provided in this CBO report {see table 3} fall close in line with their earlier analysis of which were used by the crafters of the law to sell the law to other congressional democrats.

That’s right, at the time ObamaCare was sold to the American people it was projected that the number of uninsured Americans would fall by 32 million by year 2016, just one year away.  So, where are we now?

As of December 2014, 10.8 million individuals had gained healthcare coverage through the Medicaid expansion, as reported by HHS, and after two full open enrollment periods the number of uninsured Americans that obtained a qualified healthcare plan through the ObamaCare exchanges number well under 4 million.  With a reduction of the uninsured fewer than 15 million, that puts a great deal of pressure on the already struggling law to reach the 32 million mark by the close of next year’s open enrollment period.  And the biggest deterrent keeping the uninsured away is cost. 

Affordability still remains as elusive to individual healthcare insurance plans as transparency is to the Obama Administration.  In fact, cost has been such a large deterrent that one of the groups ObamaCare was supposed to help the most, those with a high cost/high risk pre-existing medical conditions, have been largely locked out from obtaining healthcare insurance.


In reading such articles as posted by the LA Times and the Washington Post, is it any wonder why democrats and other proponents of ObamaCare believe the law is working?  Why wouldn’t they, these left leaning news sources have spun the latest CBO projection’s in such a manner that it makes the law sound like it is over performing.  But such is not the case as has just been revealed. 

Complete and factual reporting on the projections portrayed in the most recent CBO report are literally non-existent in most of the media reporting and the similarities in the fluff pieces published by these news sources is mind boggling.  Liberal news agencies cannot shoulder all the blame for providing sub-standard reporting however as it is the apathy of the people that has for decades allowed them to continually lower the bar of journalistic integrity as well as has allowed them to engage in agenda based instead of fact based reporting.

 

Gaba Confirms ObamaCare Exchange Failure

Anyone that closely follows ObamaCare enrollment is familiar with Charles Gaba and his extensive efforts in compiling ObamaCare enrollment data.  Gaba’s ACASignups.net website has become the go to place for anyone and everyone seeking comprehensive, accurate and verifiable enrollment information.  And so it came with great pleasure that figures shown on his recently released 2015 enrollment graph validated my own efforts in determine the success or failure of the ObamaCare exchanges.

While Gaba’s work is geared towards determining the total number of individuals who gained any form of healthcare coverage as a result of the ObamaCare law, whole or in part, my focus has strictly been on determining the number of uninsured nonelderly that gained a qualified healthcare plan through the state and federal healthcare exchanges as insuring the uninsured is the ultimate goal of the healthcare law or at least so we were told.

From an administration which so often boasts the success of ObamaCare, one would have thought that the efforts Gaba, myself and so many others have taken to get to the bottom of enrollment would be unnecessary especially considering President Obama once claimed his administration would be the most transparent of any.  However, this has proven not to be the case and in regards to providing a breakdown on the make-up of enrollment, there has been nothing short of an information blackout from the Obama Administration both in 2014 and again in 2015.  It stands to reason I guess once you realize how poorly the exchanges have actually performed in insuring the uninsured, the Obama Administration really does hate to broadcast its failures.

At this point in the game some 10 million uninsured nonelderly individuals were expected to have purchased a qualified healthcare plan through the state and federal healthcare exchanges, as projected numerous times by the Congressional Budget Office (CBO), as was accepted as the enrollment goal by the Obama Administration and most important, as used as terms to sell the law to congressional lawmakers and the American people.  Sadly, participation by the uninsured looks to be about one third that.


The Uninsured Don’t Seem to be Interested in ObamaCare

For a very long time I stood alone with my very low prediction in the number of uninsured that ultimately purchased a healthcare plan through the ObamaCare exchanges in 2014.  With each new study released quantifying the nations uninsured population and with each revised report on Medicaid enrollment released by the Department of Health and Human Services (HHS), it became more and more evident that Medicaid enrollees were taking up most of the picture, leaving little room for the uninsured who purchased a healthcare plan.  But nobody was reporting this, at least not the low enrollment figures I was arriving at.

For 2015, with HHS providing weekly enrollment reports for the federal healthcare exchange, along with data collected from various other reliable industry sources, I attempted to project how effective the ObamaCare exchanges were in attracting America’s uninsured population.  I posted my final projections in an earlier blog dated February 25th.  As stated in the blog, for 2014 the ObamaCare exchanges appear to have attracted a mere 1.4 million uninsured enrollees while 2015 fared better with an uninsured enrollment of 2.3 million.

Of course, me being an unknown entity, my projections have come under great scrutiny by many low information proponents of ObamaCare too apathetic to do a little research and some basic math in fear of proving themselves wrong.  But those who have called my projections into question have been put in check as I am no longer that lone wolf out their touting the failure of the ObamaCare exchanges, I now have the ultimate ObamaCare enrollment support group, Charles Gaba and his graphs!

Now let me be clear, I am not implying that Charles Gaba has endorsed my little know blog, my opinion or my findings, it’s not likely that Gaba has even the slightest inkling as to who I am.  However, in his highly accepted reporting of enrollment, he has provided what is a very rare commodity, the actual reporting of the number of uninsured that have participated on the healthcare exchanges.

From Gaba’s website in regards to his enrollment findings:

“However, now that every state (except for Idaho) has been updated through at least February 15th, here, once again, is the complete 2015 ACA enrollment graph, showing the rough breakout of all 32.3 million people whose current healthcare coverage is either wholly or partly due specifically to the Affordable Care Act.

Again, that does not mean that all 32.3 million were uninsured to begin with. By my best estimates based on the available data, I estimate that around 19 million already had some form of insurance coverage. Around 11 million were uninsured prior to January 2014, and around another 2 million were uninsured prior to January 2015.”

In 2014, of the 11 million reduction of the uninsured reported by Gaba, 9.5 million are true Medicaid enrollments directly linked to the Medicaid expansion, as depicted in his graph.  This leaves no more than 1.5 million possible uninsured enrollments through the ObamaCare exchanges during the 2014 open enrollment period which is in close agreement to the 1.4 million enrollment figure I arrived at.

For 2015, Gaba states that another 2 million of those who now have healthcare insurance were uninsured prior to January 2015.  This too is not far off from my more generous prediction of 2.3 million.

Gaba and I did not reach our conclusions using the same method which brings increased validity to these numbers. 

My method was quite simplistic and for 2014 I used nothing more than a study from a well-respected industry source as my baseline for the reduction in the nations uninsured and subtracted the number of those taking advantage of the Medicaid expansion over the same period, as reported by HHS.  The difference is the maximum possible number of uninsured that could have purchase a qualified healthcare plan through the ObamaCare exchanges.  It does not take in to account any off exchange enrollment which would drive the figure down even lower.

For 2015 I compiled HHS weekly enrollment reports along with a little internet research to estimate the number of transfers to the ObamaCare exchanges from other marketplaces.  My method for both years is better explained in an earlier blog post of mine. 

Gaba on the other hand amasses tons of enrollment data from numerous sources to create his data table.  Gaba’s method is significantly more accurate but when dealing with figures well into the millions, being off by a few thousand is not enough to change the argument.

Two very different and verifiable methods both conclude that after two open enrollment periods (9 full months plus extensions) and from a pool of 40 million uninsured nonelderly Americans eligible to purchase healthcare plans through the ObamaCare exchanges, significantly fewer than 4 million chose to do so.  You can draw your own conclusions as to the effectiveness of the ObamaCare exchanges in attracting the uninsured.

Is ObamaCare Fulfilling Its Intended Purpose?

If you are a proponent of ObamaCare then you are likely to stand by the claim that ObamaCare is working great and helping millions of people and in some regards you would be right.  Certainly the Medicaid expansion has helped millions gain the security of healthcare coverage but honestly, how hard is it get people to sign up for something when it is FREE, especially when that FREE is someone else paying the tab on your healthcare!  The Medicaid expansion can hardly be used as a measure of the success for the massive healthcare law much less deem it a major accomplishment as again it is FREE to the end user!

Beyond the Medicaid expansion there is little else that has gone well for ObamaCare.

Insuring the Uninsured Nonelderly  -  As we have already ascertained, enrollment of the uninsured nonelderly through the ObamaCare exchanges has missed its mark nearly threefold and there is every reason to expect future enrollment to get worse instead of better.  As premiums and deductibles continued to rise, the pool of interested uninsured participants shrinks. 

Overall, participation on the ObamaCare exchanges will increase significantly in the coming enrollment periods as more employers terminate the healthcare relationship with their employees the majority of which will likely transfer over to the ObamaCare exchanges in search of taxpayer funded subsidies.  But as for the uninsured, they will continue to be a scarce commodity.

Reducing HealthCare Premiums  -  Despite all the signs of increased premiums heading our way back in 2013, President Obama remained adamant that his signature healthcare law would lower premiums on the individual marketplace.  And it was on the eve of the rollout of the HealthCare.gov website that he took a victory lap while exclaiming “See, ObamaCare Works”, this happening shortly after the Governor of New York released the insurance rates that would be offered on their state run exchange.

The liberal media was all over the story of the 40% rate reduction in New York while they ignored reporting on the reality that was faced the next morning, a reality that industry experts such as the Manhattan Institute had been reporting on during the months, weeks and even days leading up to the rollout.  While New Yorkers were elated to finally be able to afford healthcare insurance, residence in 43 other states (including DC) woke up to a very different reality.  In each of those 43 states insurance premiums offered on the ObamaCare exchanges increased on average, compared to the previous years rates on the individual healthcare insurance marketplace.  36 of those states realized an increase of 20% or greater, six of which had an average rate increase of over 80%. 

The Obama Administration’s response to these near nation-wide rate increases was at the very least pathetic.  Sweeping over the fact that the law failed to reduce individual insurance premiums as promised, the administration’s reply to the question was that with subsidies, most would still see a reduction in their insurance premiums.  This gave little comfort to the millions whose insurance policies were canceled and ended up paying more through the ObamaCare exchanges, even after subsidies.  As well this provided little comfort to those picking up the tab.  This was neither the plan nor the promise made by the Obama Administration and Democratic Lawmakers who forced this law upon the American people.   

So why did the State of New York experience such a rate reduction windfall while all others did not?  The answer is simple, New York and a very broken healthcare system due to decades of overregulation and attempts to do the very same thing the ObamaCare law is now attempting to do nation-wide.  Similar to how RomneyCare worked well in fixing the broken healthcare system in the State of Massachusetts, the ObamaCare model was well suited to address the problems faced by the State of New York’s broken healthcare system.  Unfortunately this one-size-fits-all approach is not suited for the balance of the states which were not suffering from the same overregulation and out of control rate issues as New York and a small handful of other states. 

And let us not forget that before ObamaCare came into existence, healthcare insurance on the individual marketplace was affordable to most working Americans even without subsidies.  What have we really accomplished here?

Slowing the Growth Rate of Healthcare Costs  -  When President Obama speaks of the slowing in the growth rate of healthcare cost, listen closely to what he says or more important, what he does not say.  At no time does the president ever tie the slowing growth rate of healthcare costs to his signature healthcare law although the subject is always brought up when he is touting the law’s success.

There is no denying that the growth rate in healthcare costs has slowed however, this is a trend that started in 2009 and before ObamaCare was a bill much less a law.  Economist and industry experts, including the CMS actuary, contribute most if not all of the slowdown in growth to the 2007/2008 recession and slow economic recovery.  As well, they expect growth to return to its previous rate once the economy returns to normal as ObamaCare has done little to reform the actual cost of healthcare. 

In a nutshell, ObamaCare has done nothing measurable that can attribute to the slowdown in the rise of healthcare costs and the president never actually states that it does.

Insuring Those With Pre-Existing Conditions  -  One of the grandest lies perpetrated by the sellers of ObamaCare was that the law would ensure that millions who have been denied affordable healthcare due to a pre-existing medical condition would no longer be discriminated against.  Millions, what millions?

In an attempt to mislead the American people as to the severity of the pre-exiting condition issue facing or nation, then HHS Secretary Kathleen Sebelius and the president publically stated that without healthcare reform 129 million people with a pre-existing medical condition could be denied affordable {healthcare} coverage, a claim also published in an report issued by HHS.  Of course democrats ran wild with this claim and used it to demonize those heartless republicans who opposed the law. 

There is no question that for decades private healthcare insurers have denied coverage to many with high cost/high risk medical conditions but for the administration to insinuate that there are millions or even potentially millions of people with a pre-existing condition that could suffer without healthcare reform is nothing short of a fairy tale  And to support the fairy tale claim, when the High Risk Pool provision, better known as the Pre-Existing Condition Insurance Plan or  PCIP, of ObamaCare was created, CMS Chief Actuary reported that only 375,000 people would enroll in this provision.  What happened to all those millions?

Only those with their heads buried three feet in the sand actually believed that 129 million people could be affected by the new healthcare law, most did believe the number to be well into the millions however, as that is what was repeatedly told to them since the day Obama was sworn into office.  But the real kicker is, of the 375,000 estimated to be in need of assistance through the federal PCIP provision, as stated the CMS Chief Actuary, ObamaCare managed to attract fewer than 135,000 participants across all 50 states and DC over the three and a half years the federal PCIP program was in play.   

During the first year the federal PCIP was made available, fewer than 50,000 individuals enrolled on the program and by the end of 2013, enrollment increased to just under 135,000.

So why so few enrollees, did CMS get it wrong?  Likely not, at least not in regards to enrollment estimates, but they did get the cost wrong.  As it turns out, there was little affordability provided in the federal PCIP and therefore nearly two thirds of the projected enrollees remained lock out just as they had been in the past, they simply could not afford the insurance being offered to them.  In addition to the high buy in cost of the federal PCIP, the administration grossly underestimated the overall cost to cover the medical needs of those who did enroll.  With barely over one third the projected enrollment the federal PCIP still ran through its entire budget and actually cut off enrollment early to prevent having to ask congress for more money.

It is hard to fathom that the Obama Administration wasted so much time, energy and American tax dollars creating the unaffordable Affordable Care Act which continues to leave the very people it was intended to help, out in the cold.  And let us not forget that the combined enrollment of the state and federal PCIP programs numbered in the hundreds of thousands not tens of millions as the Obama Administration wished us all to believe.
 

ObamaCare is clearly missing all of its marks.  So despite all the claims of greatness and the continued rhetoric from the left against those who oppose the law, the president’s legacy legislation has turned out to be nothing more than an extremely costly expansion of the Medicaid system which has unnecessarily transformed the private insurance industry and has driven affordability so far out of individual healthcare plans that even under federal mandate and massive fines, the uninsured still reject the law. 

Based on the long list of ObamaCare failures, any congressional lawmaker that possesses an ounce of moral fabric, any degree of fiscal responsibility and claims that he or she is looking out for the overall best interest of the American people should be screaming at the top of their lungs to repeal this law.  And judging from all the laws shortcomings, I think it is safe to say that any alternative to ObamaCare would be a marked improvement.

ObamaCare Enrollment Fails to Attract the Uninsured Once Again

It has been just over a week now since the ObamaCare exchanges 2015 open enrollment period closed and nary a word has been heard from neither the Obama Administration nor the news media, even the report that 11.4 million individuals selected a healthcare plan through the state and federal exchanges lasted no more than a day in the news cycle.

So why all the quiet?  According to the Department of Health and Human Services (HHS) report, enrollment far surpassed their projection of 9.1 to 9.9 million.  Even with the expected attrition rate enrollment should still end up someplace in the mid 9 million range.  Shouldn’t the Obama Administration be jubilant over this?

Maybe the hush hush from the administration is due to the fact that for the second year since their opening, the ObamaCare exchanges have fallen far short of their intended purpose.


The Purpose of ObamaCare

The intended purpose of ObamaCare was to make healthcare insurance both affordable and accessible to the uninsured and by doing so it would attract millions who have for years found healthcare insurance unobtainable, at least that was the plan.  But if that didn’t work, the new law imposed a federal mandate requiring all individuals to have healthcare insurance or face a penalty.

To accomplish this, ObamaCare created two avenues through which the uninsured could gain access to affordable healthcare.  For the lowest income earners, an expansion of the Medicaid system brought them access to free healthcare services.  And for those with incomes above the Medicaid threshold, government managed healthcare exchanges were formed through which taxpayer subsidized, private insurer provided healthcare plans could be purchased.

Of course, the Medicaid expansion provision of ObamaCare is working great, maybe even too great for some states which are now facing budgetary issues as a result of higher than anticipated participation.  And why shouldn’t the Medicaid expansion be working great, it provides fully taxpayer funded healthcare for the very low income.  It’s pretty hard to beat FREE!

The healthcare exchanges on the other hand, are not fairing as well in their effort to attract the uninsured.  Why are the exchanges experiencing difficulties?  There are two primary reasons the first being quite simple, affordability. 

The number one mission of ObamaCare was to drive affordability into the individual healthcare insurance market but it failed to do so in epic proportion.  The new law transformed how private insurers packaged and rated their healthcare plans through a mountain of new regulations and mandates.  There were some minor reforms put in place but nothing close to what was needed to offset the cost of the new regulations and mandates now being imposed on individual insurance plans much less enough to lower rates.

Instead, the new mandates drove individual insurance plan rates up substantially in virtually every state as the nation saw firsthand when the healthcare exchanges first opened back in October of 2013.  Even with tax subsidies, only the lowest income qualifiers receive any substantial savings. The exchanges did make affordable healthcare available to those who were previously denied coverage by private insurers however, this accounts for a very small fraction of the uninsured in this country.

The second and far less talked about reason the exchanges have failed to attract the uninsured is the fact that many of the nations uninsured simply are not interested in obtaining healthcare insurance.  It was naïve for the Obama Administration to think that millions of people who have historically chosen to be uninsured were going to have a change of heart.  Failing to bring affordability to healthcare gave even less incentive for this particular group of individuals to get in line and sign up.


What Where the Enrollment Goals?

All we hear from the liberal media today is that the ObamaCare exchanges have met their enrollment goals, but have they?  It all depends and what you believe the goal is!

Was it the goal of the ObamaCare exchanges to merely transfer millions of insured individuals from one marketplace to the ObamaCare exchanges or was it the goal of the ObamaCare exchanges to play a major role in lowering the number of this nation’s uninsured population?  It was the latter of course although this certainly is not being promoted by the Obama Administration.  And the administration’s silence on the intended goals of the ObamaCare exchanges is for good reason as they have missed their mark by a huge margin.

So what were the goals of the ObamaCare exchanges exactly?

At the request of then Speak of the House Nancy Pelosi, the Congressional Budget Office (CBO) performed a study regarding the projected effects of H.R. 3590 PPACA.  The study projected that in 2014, the number of the nation’s uninsured would be reduced by 6 million as a direct result of enrollment through the ObamaCare exchanges.  For the following year (2015) the study projected the reduction would increase to 10 million and by 2016 16 million Americans were projected to have purchased and maintained a qualified healthcare plan through the ObamaCare exchanges.  The following day that this CBO report was released, the House voted on H.R. 3590 PPACA which passed without a single republican vote.  Just 2 days later, ObamaCare was signed into law.

Exactly one year later the CBO released another study which included the projected effect of the ObamaCare exchanges.  The report was submitted as testimony in a March 20, 2011 hearing conducted before the Subcommittee on Health Committee on Energy and Commerce U.S. House of Representative.  This CBO report revealed the same projections for the reduction of the uninsured through the ObamaCare exchanges as did the CBO report of one year prior.  There were many other CBO reports on the effect that ObamaCare would have on the uninsured population released during the crafting of the law, all of which provided similar results.

More recent CBO studies have lowered the projected effect of the ObamaCare exchange on the nation’s uninsured population slightly however, the figures state above are the enrollment projections use to sell the law to Democratic Lawmakers who voted for the law as well these are the enrollment figures that the law is expected to achieve by those who have been stuck picking up the tab.

Just How Bad Have the ObamaCare Exchanges Fail?

Overshadowed by the attention generated by the massive failures of the HealthCare.gov website, the first round of ObamaCare open enrollment has been largely forgotten.  Nearing the end of the enrollment period and fearing major public and political backlash from what appeared to be horribly low enrollment, the Obama Administration lowered expectations from 7 million down to 6 million.  But with the bandaids applied to the website and a surge in last minute enrollment, at the closing bell it appeared that some 8 million individuals had selected a healthcare plan through the state and federal exchanges during the 2014 open enrollment period.

Over the following year those 8 million selected plans slowly dwindled down to 6.7 million enrollments, just short of the original enrollment projection however, no report has ever been released by the administration which identifies exactly how many of those enrollments were made by the formerly uninsured.  Republican Lawmakers and watchdog groups have tried and tried again to get the Obama Administration to release a breakdown of the 2014 enrollment figures but transparency not being this administration’s strong suite, they have failed to do so to this day.  But there is always more than one way to skin a cat!

The Urban Institute conducted a study that looked at the effects of the ObamaCare during its first year of implementation.  What the study revealed was that at the end of the first year 10.6 fewer American’s were uninsured.  The report also went on to state that the most of the gains in reducing the number of uninsured were made through the Medicaid expansion which a report released by the Centers for Medicare andMedicaid Services (CMS) quantifies as 9.2 million during the same period.   The net, 1.4 million, is the reduction in the uninsured through the purchase of a qualified healthcare plan during the first year the law was fully implemented, not all of which were purchased through one of the ObamaCare exchanges it must be noted.

The 2015 open enrollment period did better at attracting the uninsured than did the 2014 open enrollment period although the numbers are still terrible.  Let’s take a look.

2015 Open Enrollment by the Numbers:

            Total plans selected                            11.7 million
            Renewals                                             5.9 million
            Attrition                                              1.0 million
            Known Transfers                                2.5 million
            Reduction in Uninsured                   2.3 million

The total plans selected reported here differs slightly from the 11.4 million that HHS announced to the media.  This figure is based on the weekly enrollment on the federally managed exchange which HHS reported in their weekly blog and expanded to represent 100% of exchange enrollment.  The same method was used for renewals which were also reported by HHS in their weekly blog enrollment updates. 

New enrollment attrition, i.e. those who will never pay for the plans they selected or will cancel their plans within the first few months is a projection based on a loss of 17% of the non-renewal plans selected, the new enrollment attrition rate of 2014 enrollment. 

Know transfers are the sum of 2015 employer healthcare cancelations, 2015 private policy cancelations, late renewals and state exchange closure transfers.  What is missing from the know transfer figure is the number of off-exchange non-cancelation transfers that took place as there is no accurate method to determine this figure.

When all the figures are tallied up, 2.3 million enrollments remain which is the maximum number of individuals who could have obtained a qualified healthcare plan through the state and federal exchanges during the 2015 open enrollment period.


ObamaCare is Losing Customers

Almost as troubling as the low turnout by the uninsured in 2015 is the prediction that 1.2 million 2014 ObamaCare enrollees would likely not renew their plans in 2015.  This admission was made in a brief issued by HHS (ASPE) just days before the open enrollment period began.  In the brief HHS made reference to industry information regarding insurance marketplace retention rates being between 80-85% and predicted the same for the 2014 ObamaCare exchange enrollment. 

The problem with this prediction is that in the pre-ObamaCare marketplace the 15% lost  enrollment of one insurer becomes a 15% gain by another insurer whose loss moves to another and so on and so forth.  In the case of ObamaCare however, the ObamaCare exchanges are the last stop for those seeking out the most cost effective healthcare plans as only through the exchanges can the vital cost saving tax subsidies be obtained.  With 87% of those enrolled through the exchanges receiving subsidies, those leaving ObamaCare are not doing so because they found a more affordable plan.  More likely those leaving the ObamaCare exchanges are doing so as even with subsidies, healthcare insurance has still been found to be too costly.  There are also certain number of individuals ending their subsidized coverage and transitioning to employer provided insurance plans.

The argument of normal attrition, made by HHS, to account for enrollment losses they predicted to suffer in 2015 is little more than a smoke screen raised in an effort to try and explain away the losses caused by other variables such as high premiums and deductibles.  But if it is any consolation, renewals appear to have been better than HHS projected with 5.9 million of the 6.7 million 2014 enrollment returning.  That equates to a net loss of 0.8 million versus the 1.2 million HHS projected prior to the open enrollment period beginning.

   
To summarize, fewer than 1.4 million uninsured Americans purchased a healthcare plan through the ObamaCare exchanges during the 2014 open enrollment period and an additional 2.3 million did so in 2015 making the total reduction of the uninsured through the ObamaCare exchanges a whopping 3.4 million to date.  This figure is significantly short of the 10 million that was originally projected when selling the bill to congressional lawmakers back in 2010.  And with the loss of 0.8 million re-enrollees in 2015, at least a portion of which are a direct result of the ObamaCare exchanges, the reduction in the number of the nation’s uninsured through the exchanges likely lingers around the 3 million mark as we enter our second full year of ObamaCare.

The uninsured seem unimpressed with the offerings made to them through the ObamaCare exchange and even under federal mandate and the threat of penalty seem to be disenchanted with the whole idea of ObamaCare!

ObamaCare Enrollment Week 12 - Nothing New To Report

On Wednesday HHS reported the federally facilitated marketplace (FFM) enrollment figures for Week 12 of the 2015 open enrollment period.

There is little new to report that was not covered in last week’s enrollment update.  As was predicted, as we approach the end of the open enrollment period the rate of enrollment improved by 53.5% from the previous week.  The HHS report indicated that 275,676 additional plans selected during week 12 bringing the cumulative number of plans selected on the FFM to 7,749,375.  If this enrollment rate holds, and accounting for the expected last minute surge in enrollment, the Daily POV best estimate for the total number of plans to be sold through all exchanges by the end of the enrollment period will be just over 11 million. 

If enrollment continues as expected, it is also projected that at very best case 2.2 million uninsured nonelderly will have purchased a qualified healthcare plan through one of the state or federal healthcare marketplaces.  More realistic however is the number of uninsured nonelderly obtaining a healthcare plan through the exchanges this enrollment period to be closer to 1.4 million.

What if we were surprised with a massive last moment enrollment surge?  Hypothetically, if the last week’s enrollment were to be four times that of week 12, the number of uninsured nonelderly obtaining a healthcare plan through the exchanges could be as high as 2.8 million.

Enrollment Numbers by the Week (as reported by HHS)

Here are the enrollment figures HHS has reported for the first 12 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
Week 12  -  275,676* plans selected
Week 13  - 
* No distinction between new enrollment and renewals provided

With less than 4 days remaining in the 2015 open enrollment period at the time of this writing, we should expect to see the final week’s enrollment figures in just over a week from now, assuming HHS maintains their past reporting schedule.  It’s hard to say when they will release the final enrollment report as they will need input from the 14 states which operate their own exchanges.
 

Breaking Down the Number of Plans Sold

Once all the states chime in and HHS has a moment to put together a rough tally of the total number of plans sold through the exchanges, the claims of success will quickly hit the streets.  If our predictions are correct, the total number of plans sold will be just over 11 million, well in excess of the 9.1 to 9.9 million enrollment projection stated by HHS.  What will be lacking in the mainstream and social liberal media hype is the qualification of the number of plans sold and don’t expect HHS to be volunteering any information either.

From the estimates derived from the My POV Model, here is how the numbers break down:

·         Total number of plans selected *                    11,067,636

·         Plans sold (after attrition) **                          10,291,034

·         Renewals ***                                                  6,499,387

·         Plans sold non-renewals                                  3,791,647

* Assumes week 12 enrollment twice that of week 11 and expands the federal exchange reported figure by 25% to reflect the portion of enrollment that is expected from the state exchanges.
** Adjusted for a 17% attrition rate (as adopted by HHS) on new enrollments only.
*** New enrollments, as reported by HHS expanded by 25% to reflect state marketplace enrollment.

What is left out in the above totals is the number of individuals who were already insured and transferred to the state and federal marketplaces for any number of reasons. 

·         Transfers from other marketplaces (fewest)               1,618,527

·         Transfers from other marketplaces (realistic)              2,382,928

And when you reduce the “plans sold non-renewals” by the number of other marketplace transfers, what remains is the number of plans purchased by the uninsured nonelderly, 2.2 million on the high side and 1.4 million on the low end.

Of course, the next question is, where did we come up with the number of “other marketplace” transfers?  A simple enough question to answer.

The bulk of the off exchange transfers come from employer plan cancelations.  A second round if private policy cancelations also attributed to the large number of off exchange transfers as did the states of Nevada and Oregon closing their states exchanges.

·         Employer plan cancelations  -  A survey of insurers conducted by the Society of Human Resource Management reviled that 1% or 964,000 employer provided healthcare plans would be canceled at the end of the 2014 insurance period.  This count does not including spouses and children which when included will significantly increase this figure.

 

·         Private policy cancelations  -  348,914 private policy cancelations were identified in 9 of the 13 states whose insurers sent out cancelation notices near the end of 2014.  As not all states require insurers to publically report cancellations nor are all states required to do so, it is likely that the actual cancelation number exceeds 500,000.

 

·         State exchange closures  -  Nevada and Oregon have thrown in the towel in trying to get their states exchanges functioning properly and have deferred to the federally managed healthcare exchange for individual enrollment for 2015.  The number insured by these states in 2014 was 105,000 all of which are expected to have renewed their plans through the federally managed healthcare marketplace.

Certainly every policy canceled may not have resulted in a transfer to the state and federal exchanges but the alternative would be the canceled individual would then be uninsured, an action counterproductive to ObamaCare and from a numbers standpoint creates a net zero gain or loss, therefore we will assume a 100% transfer rate for simplicity.

The above listed off exchange transfers do not include the 200,000 late renewals or any other off exchange transfer that did not fall in the three categories listed.

Unless it is discovered that a gross error in the number of off exchange transfers exists, the predicted best and likely cases of 2.2 million and 1.4 million uninsured nonelderly enrollment projections appear to be the sad truth to a healthcare law that now looks to be roughly 9 million short of its second year marketplace target.

ObamaCare Enrollment Week 11 - The Marketplaces are Failing

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:

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.

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

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}:

 

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

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:

·         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.

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 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.

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.