Digesting the ACA’s 7M Enrollees

By FOXBusiness

The president’s signature legislation hit its enrollment goal on the last day to get covered under the Affordable Care Act, an achievement many worried wouldn’t happen given the botched roll out of the federal exchange and numerous delays and changes to the law since its Oct. 1 launch.

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President Obama announced Tuesday that 7.1 million people had selected plans on state and federal exchanges.

While the numbers are good news, insurance and health-care analyst are still waiting for more details about the enrollees before calling the reform a success.

The last enrollment report from the Department of Health and Human Services that included a demographic breakdown was in March with 4.2 million people having selected plans with 25% being between the ages of 18 and 34.

HHS continues to report anyone who has selected a plan on an exchange in their figures. The insurance industry typically considers individuals enrolled once they have made their first month’s payment.

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On Monday, HHS Secretary told a local Oklahoma  TV station that insurance companies, “ tell us for their initial customers it’s somewhere between 80, 85, some say as high as 90% have paid so far.”

The ACA mandates that every individual in the country have insurance by the end of open enrollment period, or they will face a fine of $95 a year or 1% of their annual income for failing to comply. The administration announced an extension last week for those who have issues signing up. A spokeswoman for HHS told FOXBusiness.com no date has been set yet to end the extension.

The law hinges on a strong showing of young enrollees in the insurance pool to help contain coverage costs. The law prohibits insurers from denying coverage to those with pre-existing conditions.

But young enrollees aren’t the sole solution to making this law work, says Larry Kocot, visiting fellow at the Brookings Institution, who points out that while young people are needed, young does not mean they are in good health.

“Young is being used as a proxy for healthy, but it’s not a perfect proxy, because the health of the enrollees isn’t being exposed,” Kocot says. “I don’t know when we will get that, but it probably won’t happen until much later.”

Having healthy people in the mix is key to keeping premium levels down for the future, but the health status of the current pool is not clear.

It also remains to be seen how many of the 7 million enrollees were previously uninsured. According to estimates, 5 million people lost their plans when the law rolled out because they didn’t meet the law’s coverage requirements.  In November, Obama announced an administrative fix that would allow those with previously-cancelled plans to keep them through 2014 at the discretion of state regulators and insurers.

Joel Ario, former director of the Office of Health Insurance Exchanges at HHS under the Obama Administration, says the feat is a “pretty amazing recovery,” even though it is not yet clear who has made their premium payments.

“The best guess right now is that 15% of people have not yet paid their premiums, but they have made a decision to enroll,” Ario, who now serves as a managing director at Manatt Health Solutions, a consulting firm. “The insurers now have their contact information and will continue to pursue them to produce those enrollments. Most of these people will eventually enroll.”

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