by Katherine Restrepo
Director of Health Care Policy, John Locke Foundation
Obamacare’s original second enrollment period to #GetCovered has just about come to a close. (It was supposed to end on Sunday, but the administration announced this week that they will be opening a new special enrollment period during tax season.) The Obama Administration has been chirping through twitter and other social mediums that the Affordable Care Act has thus far extended health insurance to 11.4 million enrollees and counting.
The White House considers this a success — especially because healthcare.gov isn’t nearly the disaster it was last year. But success shouldn’t be determined by the tally of enrollees. It should be based on factors such as how many of those enrollees were previously uninsured, how many consistently pay their premiums, and whether people can access affordable medical care.
Looking back at 2014, total sign ups amounted to 8 million, but only 6.7 million truly enrolled and gained health insurance coverage, which requires both signing up and paying the first month’s premium. Avik Roy, senior fellow at the Manhattan Institute, addresses this retention rate in his latest Forbes post and makes the case for why he thinks that just 5 million of the 2015 enrollees were previously uninsured.
So what do the numbers add up to in North Carolina? According to the most up-to-date report from the Department of Health and Human Services, approximately 560,000 residents shopped for coverage in the state’s federally established exchange last year. 40 percent of these sign-ups represent new consumers, while the remainder renewed their policies. Meanwhile, North Carolina’s "young invincible" crew represents 27 percent of the enrollee population — a slight increase from last year. Then again, we don’t know how many within this 18-34 age band seek treatment for chronic health conditions.
It cannot be emphasized enough that the invincibles are key to holding together the risk pool, since their inflated premiums offset the medical costs incurred by the old and sick. Let’s take a look at the lowest cost plan that Blue Cross and Blue Shield of North Carolina offers in Wake County for a 27 year old earning an income of $35,000. The White House advertises that individuals earning up to 400% ($46,000) of the Federal Poverty Level (FPL) may qualify for financial assistance. Note that this plan does not come with a subsidy. In a majority of states, subsidies greatly diminish beyond 250% of the FPL.
Having insurance is important, and the exchanges certainly do bring more consumer awareness, as some entering the non-group market are no longer shielded from the true costs of employer-sponsored health benefits. But the fact that individuals are being coerced into purchasing plans that are either too expensive or may not always serve their interests is just one reason why the federal health law’s approval rating is at an all-time low.
Overall, 92 percent of North Carolinians who have signed up qualify for some form of financial assistance. It’s clear that low-income individuals benefit the most along with those nearing Medicare eligibility. Individuals with pre-existing conditions may now be covered, but could still have difficulty paying for certain specialty drugs out of pocket.
Instead of the White House toasting President Obama’s eponymous law, it needs to be warning federal exchange enrollees about a potential premium increase nightmare depending on the Supreme Court ruling in King v Burwell. Should the justices rule that the IRS has been illegally distributing subsidies in 36 states’ federal exchanges, North Carolinians will be exposed to the full cost of Obamacare.
Until then, both Republicans and Democrats need to focus less on how insurance cards are distributed and more on how medical care can be affordable for both the insured and uninsured. To start, it would be a good idea to allow for an increase in the supply side of health care and break down the many barriers that prohibit disruptive innovation from spreading in the health care sector.
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