Obamacare was supposed to dramatically reduce the country’s formerly high uninsured rate, but progress may have stalled three years in.
The Department of Health and Human Services announced Thursday that 12.7 million Americans selected plans through online insurance marketplaces during the law’s third year of enrollment, which ended Sunday.
“Signing up 12.7 million people is an incredible undertaking, especially considering the progress we’ve made in years past to bring down the uninsured rate,” said HHS Secretary Sylvia Mathews Burwell.
That total appears to put the Obama administration on track to meet its modest goal of 10 million paying consumers throughout the year. However, it exceeds last year’s enrollment by just 1 million while falling short of signup projections by the Congressional Budget Office and other analysts.
So while President Obama’s signature healthcare law has significantly bumped down the uninsured rate, reducing it from about 16 percent before the law to around 9 percent now, experts are questioning whether the sweeping measure has lost steam. Vast numbers of Americans remain unaware of the law’s coverage expansions or feel they still can’t afford health plans, despite its subsidies.
“I think the big story is really, why isn’t [enrollment] higher,” said Jon Gabel, a healthcare economist for the University of Chicago’s National Opinion Research Center. “I don’t know how to say this gently — so many of the uninsured are so far from civic life. They don’t read the newspaper, they don’t watch TV.”
While the CBO has most recently estimated 13 million people would enroll in Obamacare plans this year, the administration set its sights much lower, announcing an enrollment goal that some viewed as a lowball estimate intended to allow officials to declare easy victory.
To reach its goal of 10 million paying customers, the administration likely would have to achieve about 11.5 million initial signups, assuming about 15 percent drop out throughout the year by failing to pay their premiums. The 12.7 million enrollees exceed that total, allowing officials to express confidence that they’re on track.
“We feel very good,” said Andy Slavitt, acting administrator for the Centers for Medicare and Medicaid Services. “We do feel good about being able to hit our target.”
Consulting company Avalere Health estimates that based on the 12.7 million number, enrollees will total about 10.2 million by the end of 2016. But the company also warned that the signup numbers indicate growth in the individual insurance market has slowed, potentially prompting insurers to withdraw from the marketplaces and driving premiums upward.
“Efforts to expand participation in the long term will be important to sustain robust plan participation and support continued improvement in the risk pool,” said Avalere Senior Vice President Caroline Pearson.
The administration emphasized some bright points in the data it released Thursday: Four million new customers enrolled using the federal healthcare.gov marketplace, and more customers than last year, about 70 percent, actively selected new coverage, indicating there was competition among the plans.
And the administration didn’t include in its 12.7 million total another 400,000 people who moved from Obamacare plans to basic health plan programs in New York and Minnesota, noted Tim Jost, a health law professor at Washington and Lee University who generally supports the healthcare law.
“Overall, this is significant growth, although we still have a ways to go to getting everyone covered,” Jost said.
Yet the administration didn’t succeed in attracting a higher percentage of young, healthy customers, a goal that many health experts have said is essential to keeping insurers’ costs down so they’re incentivized to keep selling plans on the Obamacare marketplaces. Of the 9.6 million enrollees using healthcare.gov, 28 percent were ages 18 to 34, a share roughly similar to past years.
A central part of the healthcare law, the online marketplaces, are mostly aimed at people who don’t have employer-sponsored health plans and many of whom had been previously uninsured. A large majority of them are low-income, qualifying them for federal subsidies to help lower the cost of their monthly premium.
It’s not clear whether any of the major insurers will stop offering plans on the marketplaces, although several including UnitedHealth Care and Cigna have said they’re losing money from those customers. Republicans and conservatives have issued dire predictions that insurers could start pulling out, hurting competition and causing premiums to skyrocket.
“It’s the same story, enrollment is underwhelming and Obamacare is limping along,” said Michael Cannon, director of health policy studies for the libertarian Cato Institute. Cannon acknowledged that no major insurer has pulled out of the marketplaces, but said there are “all sorts of warning signs.”
