Something for #Obamacare apologists to worry about

August 11, 2014

satire Train Wreck

Supporters of the ACA were blaring the trumpets when it was announced last April that the system had reached 8 millions enrollments, one million more than the the figure former HHS Secretary Sebelius said was the minimum needed for Obamacare to be viable. That’s great news for fans of state-run healthcare systems, right?

Maybe, except for the fact that those numbers seem to be crumbling:

The nation’s third-largest health insurer [Aetna] had 720,000 people sign up for exchange coverage as of May 20, a spokesman confirmed to IBD. At the end of June, it had fewer than 600,000 paying customers. Aetna expects that to fall to “just over 500,000” by the end of the year.

That would leave Aetna’s paid enrollment down as much as 30% from that May sign-up tally.

“I think we will see some attrition … We’re already seeing it. And we expect that to continue through the end of the year,” CEO Mark Bertolini said in a July 29 conference call.

It’s not clear how representative Aetna’s experience is of broader exchange trends, or whether its projection may be too conservative. (If it were representative, a similar 30% decline would drop ObamaCare enrollment to 6 million or less.)

Still, as one of ObamaCare’s largest players, participating in exchanges in 16 states plus D.C., Aetna’s experience provides a pretty good window into what is happening across the country, and there are other indications that enrollment has turned down.

Emphasis added.

One of the questions many of us have had about Obamacare enrollments has been “how many have really paid,” since you don’t get services until you make that first payment, and it’s not clear from article whether those initial 720,000 were all paying customers. IBD correctly points out that there are a number of reasons why paying customers might drop out of an exchange plan, other than simply being dropped for non-payment (1). For example, purchasers of exchange-plans may have since found work that provides employer-based coverage, or they may have suffered a decline in income and thus qualified for Medicaid. (That’s a plus?) But they may also have dropped out because the premiums, with or without subsidy, are still too much to bear, especially with higher deductibles and reduced provider networks. Some may have decided to do without insurance altogether, just paying the fine and buying coverage when a serious ailment strikes, since insurance companies can no longer turn one down.

Regardless of the reason or reasons, this is not a good trend, particularly if those leaving the exchanges are mainly those who mostly pay into the system, leaving behind those who mostly take from it. And when you factor in the coming premium increases, that rate of decline may accelerate. It will be interesting to see figures from other companies over the course of the summer.

As ST likes to say, stay tuned…

(1) I also wonder how many of these are duplicates or otherwise-defective applications weeded out in the effort to clean up Obamacare’s troublesome 834 problem.