Obamacare Still Struggling A Year Later

NCPA August 12, 2014

Obamacare supporters labeled the Affordable Care Act a success after 8 million Americans had signed up for insurance at the end of March, but more than a few problems remain. In the latest edition of Reason Magazine, Peter Suderman delves into the problems still plaguing the health care law.

If one looks beyond the number of Obamacare sign-ups, it becomes clear that the Affordable Care Act is not in perfect shape:

• Eight million Americans may have signed up for health insurance, but the more important number is how many people actually paid their premiums. Estimates indicate that around 85 percent of sign-ups (or 6.8 million people) actually enrolled, less than the administration's target of 7 million enrollees.
• The demographics of enrollees is also important -- the ACA needs young, healthy people to sign up in order to cover the costs of insuring older and sicker individuals. The administration's goal was that 39 percent of its enrollees be between the ages of 18 and 35, yet just 28 percent of enrollees fell within that age range.
• Data indicates that ACA enrollees may also be sicker; a study by pharmacy benefits manager Express Scripts determined that those on the exchanges were using expensive specialty drugs 47 percent more than those on employer-sponsored insurance.
• A state-by-state breakdown of insurance markets is also concerning. Some states easily met their enrollment targets, but others did not; Wisconsin met just 57 percent of its enrollment goal, while West Virginia met just 61 percent. With such low enrollment figures, the insured may see large premium spikes.
• The website still lacks full payment-processing capabilities as well as a system to check income eligibility discrepancies.

The Obama administration has used its executive authority 22 times to change the law. According to Suderman, these changes -- which have included allowing people to keep the plans that insurers were originally required to cancel under the law -- have only increased the likelihood that those enrolled on the exchanges are likely to be those who previously lacked insurance and, therefore, are possibly sicker than the average risk pool.

Source: Peter Suderman, "Obamacare's Phony Success Story," Reason Magazine, August/September 2014.