Obamacare isn’t enrolling enough middle-to-high income Americans to remain stable over the long term, according to a new analysis.
Over the past few weeks the Obama administration has taken a victory lap touting the 11.7 million enrollees in Obamacare’s health exchanges during the most recent open enrollment, beating administration estimates of 9 million.
However, 40 percent of the people who enrolled in healthcare.gov earn up to nearly $18,000 a year and another 25 percent earn nearly $30,000, according to an analysis from the research firm Avalere health.
On the other hand, only 8 percent of people who earn up to $44,000 a year signed up through healthcare.gov, which covers 37 states. Only 2 percent of enrollees earn $60,000 and above.
The analysis doesn’t examine the enrollees in the 14 state-run exchanges.
If Obamacare doesn’t find a way to enroll higher-income consumers, it could jeopardize the healthcare exchanges, Caroline Pearson, senior vice president of Avalere, told the Washington Examiner.
If not enough high-income people sign up, enrollment could decline or sputter and health insurers would be less willing to participate in the marketplace, she said.
That could happen within the next few years.
Obamacare enrollment is supposed to grow every year, with the goal to have 21 million enrolled in health coverage by 2016.
However, the administration could run out of higher-income citizens to sign up.
Obamacare has already enrolled 76 percent of eligible U.S. citizens who earn up to $17,655 a year, the lowest income bracket, according to Avalere.
Compounding the problem is that after 2016 the law’s risk corridors and reinsurance are supposed to expire. Both are important safety nets that aim to stabilize health insurance costs.
The risk corridors help health insurers minimize losses. Health plans that gain revenue from Obamacare above a set amount pay the administration, which in turn gives that money to health plans that had losses.
The reinsurance program was created to stabilize premiums inside and outside the marketplace by providing payments to plans with high-cost consumers.
The administration has touted the law’s subsidies and credits intended to lower insurance costs, hoping that will entice higher-income consumers.
It hasn’t worked. Avalere found that only 16 percent of eligible consumers who earn up to nearly $60,000 a year got health insurance through an exchange, even though they may be eligible for premium subsidies.
Pearson said the administration should emphasize the individual mandate penalty for not getting insurance. The penalty went into effect last year and this year doubles to 2 percent of household income or $325 per person.
The administration is holding a special enrollment period until April 30 for consumers affected by the 2014 penalty and want to avoid this year’s penalty.
The analysis is based on enrollment data from the federal government and census data on the uninsured.
