“The verdict is in: Obamacare lowers uninsured,” says a headline on Politico.
“Obamacare haters, your case just got weaker,” writes The New Republic.
“For millions who signed up, Obamacare is working,” proclaims Vox.
Sorry to be a buzzkill, but the celebration is a little premature. Coverage has increased, but 20 million? That’s a clear overstatement. The actual gains are nowhere near that high.
Had the Obamacare cheerleaders more closely scrutinized the Commonwealth Fund’s report, which appeared in the New England Journal of Medicine, they might not have been so quick to reach for the pompoms.
The foundation arrived at its headline figure by adding together the following groups: the 8 million consumers who selected an ACA marketplace plan; the 6 million who enrolled in Medicaid or the Children’s Health Insurance Program; the 5 million who purchased a plan directly from an insurer; and the 1 million young adults who gained coverage under a parent’s policy.
The first problem is that the report counts all people obtaining health care coverage, regardless of whether they previously had it. That’s not “gaining” coverage – that’s replacing one form of coverage for another.
Next, the 8 million people the Obama administration claims signed up for private coverage through the law’s health exchanges includes those who signed up but never paid.
It also ignores the number of people who likely will fall out because of nonpayment in the coming months, but the report can’t necessarily be faulted for that.
As for the Medicaid enrollees, the 6 million figure is technically accurate. But it’s a stretch to claim those numbers as an ACA victory because many of those people always were eligible for Medicaid. They just never signed up until after October.
Only someone looking for reasons to pad the numbers would make such a leap.
Then there’s the 5 million who purchased coverage outside the exchange. This group includes people who bought plans directly from insurance brokers or insurance companies. Though these plans are ACA-compliant, they may not qualify for Obamacare subsidies. So how exactly can one claim these people are “gaining” cover under Obamacare?
As for the estimated 1 million people younger than age 26 who now are dependents on their parents’ plans, some analysts believe the figure is vastly inflated.
But even if it was dead-on accurate, Commonwealth’s 20 million figure likely is still off by millions.
One of the few journalists willing to take a sober look at the report was Peter Suderman, senior editor at Reason magazine: “It seems clear that millions of people, some of whom were previously insured and many who were not, did in fact obtain health coverage through Obamacare’s various coverage-expanding provisions,” he wrote. “But it’s too early to say exactly how many so far – only that 20 million is almost certainly an overstatement.”
So pardon us for holding off on ordering party favors until more accurate figures come in.
The true test of whether Obamacare is “working” will be when the exchanges reach a stability point.
For the exchanges to work, people – particularly the young and healthy – must enroll and stay enrolled to subsidize the health care costs of older people. If too many people drop out, premiums will rise to the point where the exchanges collapse.
That’s always been the inherent weakness of the Obamacare individual mandate, which is a forced regressive tax on young and healthy Americans to purchase health insurance plans they can’t afford or don’t want so older and wealthier Americans can pay less.
The heavy burden Obamacare places on the young and healthy makes it more
attractive for them to pay opt-out fines and risk going uninsured to save thousands a year in premiums. Then, if they receive a serious diagnosis, such as cancer, they can enroll for coverage and still be entitled to the same premiums paid by healthy people who chose not to game the system.
If the law is allowed to stand as-is, many Americans will jettison Obamacare once they discover that its inherent flaws make free-riding safer than ever, causing a downward spiral of falling enrollments and rising premiums that ends with the collapse of the entire system.
But if the left wants to declare victory after Obamacare’s first enrollment period and throw a party based on inflated numbers, hey, have a ball.
There may not be too many more reasons to celebrate in the future.