by Mitch Kokai
Senior Political Analyst, John Locke Foundation
At the time of enactment, CBO estimated that the net effect of the various Obamacare provisions would be 10 million new enrollees in Medicaid in 2014, 8 million enrollees in plans offered on the exchanges, 4 million new enrollees in plans sponsored by employers, and a reduction of 2 million people in the non-exchange individual insurance market. The net effect was an estimated reduction in the ranks of the uninsured of 19 million in 2014.
The Obama administration relied heavily on this CBO cost estimate to argue that the law would dramatically expand insurance coverage even as it also reduced projected federal budget deficits, in the short and long term. The CBO estimate was also instrumental in rounding up the final votes in favor of passage of the legislation in Congress. A strong case can be made that the numbers in the CBO cost estimate were what was promised to the American people, and therefore represent the benchmark against which Obamacare should be assessed.
The likelihood that such a sizeable reduction in the uninsured can be achieved in 2014 is slim. To date, far more people have learned that they are losing their plans next year than have signed up for new coverage in the exchanges. Moreover, even though Medicaid enrollments are running above those in the exchange plans, they are still not nearly on pace to reach the levels promised at enactment.
Of course, in the original cost estimate, CBO assumed all 50 states would go along with the Medicaid expansion, while, in the wake of the Supreme Court’s decision, it now appears that only about half the states will do so. Further, CBO has altered some other assumptions that affect the coverage estimates.
So perhaps Obamacare’s performance should be compared with the more recent CBO estimate, from which the administration has pulled its target for exchange enrollees. In those projections, CBO expects 9 million new enrollees in Medicaid in 2014, 7 million enrollees in plans offered on the exchanges, and a 2 million reduction in enrollees in individual insurance outside of the exchanges. So the net increase in insurance coverage for 2014 was estimated at 14 million people.
The administration’s recent announcement that the Healthcare.gov website will be functional by the end of November very likely means little to no enrollment over the coming month. From a dead start of very low enrollment as of December 1, the administration would need to have some 14 million new people come under coverage over a four-month period. Skepticism is clearly warranted.