"It profits me but little that a vigilant authority always protects the tranquillity of my pleasures and constantly averts all dangers from my path, without my care or concern, if this same authority is the absolute master of my liberty and my life."

--Alexis de Tocqueville, Democracy in America

Friday, February 14, 2014

A Trivial Accomplishment for Obamacare

The Obama administration this week released the January figures for enrollment in Obamacare through the state and federal exchanges.   The figure?   3.3 million enrolled through January 31st.  

Some in the media crowed that this proved that Obamacare is "working."   Well, not so fast.   Put aside that it's well under the 7 million by March that the administration estimated the program needed to reach solvency.   Even the 3.3 million is highly suspect.   Consider:

  • The Obama administration does not divulge how many of these "enrollees" have actually paid the first month's premium, i.e., who actually have obtained health insurance coverage.   The amount of non-payers may be as high as 20%, which would reduce the "enrolled" figure to something more like 2.6 million.   Which, not incidentally, wouldn't look as good given the administration's prior forecasts of the minimum they needed for solvency.*

  • The administration also doesn't divulge how many of these "enrollees" are actually people who had lost coverage because of the strictures of Obamacare, and who are now enrolling to get replacement coverage.   Given the numbers in the many millions who lost coverage, it is logical to suspect that there are a non-trivial percentage of the "enrollees" who were not previously uninsured, but who had insurance, lost insurance, and now are simply getting new insurance, i.e., they are simply being "churned" in the numbers to make Obamacare look better.    In fact, a McKinsey survey suggests that fully 89% of the enrollees are people who previously had insurance.

So, if you subtract the people who haven't paid yet (20%), and you subtract the people who are simply replacing prior coverage that Obamacare caused them to lose (89% of the remainder), you are getting down to something around 250,000 people who are getting new insurance because of Obamacare.... in a country where there are ostensibly nearly 50 million uninsured!

Was it worth it?   Throwing the economy and the healthcare industry into chaos in order to insure <1% of the uninsured?   That seems like a pretty trivial accomplishment for Obama's "signature" program.  

* The administration also doesn't divulge the ages of the non-paying "enrollees". Since it's fair to guess that younger people will be less able and less willing to pay health insurance premiums, it's logical that the non-payers will skew young. Which is bad, since the solvency of the program depends on signing up young healthy "invincibles" to pay for health insurance they don't need in order to subsidize the older, less healthy insureds. (The program is already running well behind in the number of young people it needs to enroll.)

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