Is the Affordable Care Act only affordable for people who already have health insurance?
Halfway through Obamacare’s open enrollment period, insurers, brokers and healthcare consultants are finding that the vast majority of Obamacare enrollees already had health insurance before switching to the exchange, the Wall Street Journal reports.
Some of them may have had their individual policies cancelled by Obamacare. Others may have seen their employers drop their insurance. And still more may have found taxpayer subsidies attractive. But whatever the reason, most enrollees so far already had insurance before Obamacare was even launched.
In fact, a McKinsey & Co. survey of enrollees found that just 11 percent of enrollees were previously uninsured. When the consulting company surveyed 4,563 exchange customers between November and January, just 389 had enrolled in a new insurance plan.
Insurance agency Health Markets Inc. enrolled close to 7,500 customers in exchange coverage, but 65 percent already had prior insurance. Fifteen percent had their plans canceled and another 10 percent dropped out of employer coverage. A full 40 percent switched over from an individual insurance policy.
Given the heavy regulations the Affordable Care Act imposed on all plans, the primary motivation for switching over from an employer policy or individual coverage is the generous taxpayer subsidy provided for exchange customers under 400 percent of the federal poverty line.
Reports of low enrollment by the previously uninsured indicate that the subsidies are not enough to get those who want and can’t afford health insurance out to purchase it.
Another possibility is that Obamacare’s Medicaid expansion overwhelmingly covered this demographic, leaving the Obamacare exchange subsidies as a bonus for those previously covered. There have been many reports from consumers that wanted to purchase their own insurance and were sidelined into Medicaid — including, notably, Kentucky Republican Sen. Rand Paul’s son.
“One of the intents of the law was to address the uninsured problem in our country,” David M. Cordani, Cigna Corp. CEO, told the WSJ. Cigna hasn’t reported on its exchange enrollees previous coverage.
President Barack Obama scolded his opposition nonstop for keeping the uninsured without coverage, and he’s stuck with that attack for years. It was the key inspiration Obama cited for pushing health care reform in 2009.
As recently as October, during the government shutdown, Obama panned Republicans for “keeping people uninsured.”
But these reports suggest that Obamacare’s real change has not been to insure the poor or those without coverage, but just to replace plans and provide subsidies for those that were already covered.
Obamacare has so far faced low overall enrollment, with few young adults signing up for exchanges. The administration has also been hit for claiming that Medicaid expansion enrollment is higher than it is.
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