Vice President Biden’s admitted this week that the Affordable Care Act’s 2014 enrollment numbers will most likely fall short of original White House expectations. But the confession didn’t come as a surprise to many industry and policy experts.
Biden told a small group of people in Minneapolis that the rollout of the president’s signature reform act is off to a “hell of a start,” but it will be tough to get the 7 million enrollees the administration originally projecting to get by March 31.
"We may not get to 7 million, we may get to five or six, but that's a hell of a start," Biden said, according to a pool report.
Biden’s comments, while off the cuff, were not all that surprising, as the Congressional Budget Office revised down its own projections earlier in the month, saying the enrollee pool would likely be 6 million in year one.
“It’s a recognition of reality,” says Susan Dentzer, senior advisor to the Robert Wood Johnson Foundation. “It’s no surprise.”
Yevgeniy Feyman, scholar at the Manhattan Institute, says 5 million people is a more realistic target. “It’s more in the range of what we should expect. But it’s a far cry from what Sebelius said we should expect for the first year.”
Payments and Demographics
The Department of Health and Human Services wanted 2.7 million of its projected 7 million enrollees to be young and healthy enrollees to help offset the cost of older and less healthy individuals. Out of the 3.3 million people who have enrolled thus far, 25% are between the ages of 18 and 34, the department reported.
Under the ACA, every individual in the country has to have insurance by the end of open enrollment period on April 1 or they will face a fine of $95 or 1% of their annual income for failing to comply.
“What really matters is the healthy-to-sick ratio and how many people are paying their premiums,” he says. “If 5 million pick a plan, and only 80% actually pay their premiums, that could be a problem.”
The 80% who have paid premiums number refers to estimates from insurance industry insiders, reported first by Bob Lasewski on his Health Care Policy and Marketplace Blog, and more recently reported by the New York Times.
Lasewski says his insurance insiders are saying that enrollments for February are coming in at about half of January’s enrollments at between 500,000 and 600,000.
“We don’t know how many people will enroll through February, so it will be difficult for them to hit 5 million,” he says.
But will the administration revise down for a potential enrollment crash? Lasewski says it’s possible, but the back-end technology on Healthcare.gov, which reconciles how much cash the government owes to insurance companies for subsidized and cost-shared plans, still needs to be built.
“They probably won’t do a proper reconciliation until sometime in the spring,” he says. “Until then, the administration will continue to report these bloated numbers.”
Listen Up ‘Knuckleheads’
First Lady Michelle Obama also spoke out on health-care this week, calling young people are “knuckleheads” in the context of why they are not rushing to enroll in coverage.
On the “Tonight Show” with Jimmy Fallon, the first lady told the new host, “A lot of young people think they’re invincible, but the truth is they’re knuckleheads. She pointed out they may cut themselves cooking or hurt themselves dancing on barstools and need immediate medical attention.
“She’s right,” Feyman says. “Young people do have a tendency to underestimate the value of insurance, but making it more expensive with new regulations and a lower penalty isn’t the way. You need to get young people to sign up by making it more attractive to buy insurance products.”
A less expensive “copper” tier has been mentioned by some ACA-backers, which would offer plans with higher deductibles but less out-of-pocket costs per month. Feyman thinks this may be a better solution.
“If you want young people to sign up you have to make it cheaper, not by telling them you need to pay more to subsidize care for older people.”