Economics, Health Care

What we learned about Obamacare March 14-18, 2014

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1.) Recently the administration announced 5 million people have signed up for Obamacare. “The surging pace could revive White House hopes of enrolling 6 million by the end of the month,” says Kyle Cheney at Politico. “The numbers released Monday don’t indicate how many of the sign-ups are newly insured or have started paying premiums, the final step to getting coverage. And the administration didn’t give any new details about the ages of enrollees, how many are the demographically desirable ‘young invincibles’…. About 1 in 5 of the sign-ups nationwide have been in California’s exchange, Covered California, which just announced it crossed 1 million customers.”

2.) AEI’s Scott Gottlieb discusses “Obamacare’s upside surprise: Off exchange sign ups boost enrollment trends”:

HHS has been purposely inflating the enrollment numbers that they publish on Obamacare, which makes one of their omissions odd. They have made no estimate of the number of people signing up off the exchanges. These enrollments are giving a boost to Obamacare’s sign up trends, and will represent an upside surprise on the final tally in March. That makes it all the more strange that the Obama Administration doesn’t make mention of these customers. Maybe it would draw unwanted scrutiny to the protracted woes with the web site.

Off exchange enrollment could be as high as 20%, according to one Wall Street analyst. If that holds true nationwide, these enrollees would probably offset the number of people who sign up on the exchange, but will never pay their first premium (and thus never be truly enrolled)…. The off-exchange enrollment trends might include more people who previously had health coverage in the individual market, and thus knew how to go directly to insurers to shop for policies.

3.) “Health insurance premiums up 39% to 56% under Obamacare, reach $2,604 a month in California,” says Paul Bedard over at the Washington Examiner:

Americans buying health insurance outside the new Obamacare exchanges are being forced to swallow premiums up to 56 percent higher than before the health law took effect because insurers have jumped the cost to cover all the added features of the new Affordable Care Act. According to a cost report from eHealthInsurance, a nationwide online private insurance exchange, families are paying an average of $663 a month and singles $274 a month, far more than before Obamacare kicked in. What’s more, to save money, most buyers are choosing the lowest level of coverage, the so-called “bronze” plans….

Explaining the higher costs, Mast said, “There are likely other factors, but what is important is that moving forward, there needs to be a collective effort to enroll as many people as possible and create a broad and diverse risk pool to keep premiums in check. eHealth can help in that effort by enrolling consumers off-exchange and is pushing to be able to enroll people in subsidy-eligible plans as well.”

4.) The Hill reports, “HHS outlines policy changes to lift insurers”:

Federal health officials dropped regulations late Friday outlining how they plan to help insurance companies stuck with unanticipated costs due to ObamaCare’s botched rollout. In a 279-page document, the Department of Health and Human Services (HHS) detailed adjustments to the healthcare law’s “risk corridors” program, a means for shifting money from insurers who fare better under the new system to those who fare worse….

Under the proposed rules, the administration would tweak the formula that determines how much money insurers pay and receive through the risk corridors…. Specifically, HHS would raise the administrative cost ceiling from 20 percent to 22 percent, and increase the risk corridors’ profit margin floor from 3 percent to 5 percent.

5.) Below is a snippet of WebMD’s Lisa Zamosky’s recent interview with President Obama on the exchanges. Go here for the full video and transcript.

6.) Yesterday The Kaiser Family Foundation released a brief on “Sizing up exchange market competition,” which looks at seven state-run exchanges. Here’s a snippet from the conclusion:

The long-term success of the exchanges and other ACA provisions governing market rules will be measured in part by how well they facilitate market competition…  With the first open enrollment period not yet completed, it is too soon to tell how well the exchanges will work to improve competition in the individual insurance market, which historically has been highly concentrated and dominated by a small number of insurers in most states…. Only scattered information is available so far on enrollment across plans….

Nonetheless, early indications suggest that some exchange markets are more competitive than their states’ individual markets before the ACA. In particular, the two largest states, California and New York, have significantly more competitive exchange markets compared to their individual markets in 2012.  Two states (Connecticut and Washington) that have also been successful at enrolling consumers seem to have less competition than in their 2012 individual markets.  Results from the remaining states generally show either similar levels of competition as their pre-ACA markets or mixed signs.

7.) Two responses to the Foundation’s report are “Obamacare was supposed to make insurance markets more competitive. Has it?” and “Obamacare shuffles health plan market share, report finds.” Here is a quote from the first one:

These seven states won’t be representative of the entire country, KFF points out. The numbers come from state-run exchanges, and officials in those states are dedicated to boosting Obamacare enrollment. There could be a far different picture in the 36 states with federal-run exchanges, where the health care law gets much less of an embrace.

8.) AEI’s Jim Capretta and Scott Gottlieb discuss the individual mandate on the “Kudlow Report”:

9.) “Survey: One-third of uninsured do not plan to buy insurance, despite ObamaCare deadline,” says Fox News:

The report from was released Monday, in the final stretch of the government’s effort to sign people up for coverage. After March 31, some who do not have coverage could face a penalty under the law — though, in recent weeks, the administration has created wiggle room to let those who have trouble getting insurance avoid a fine.

The report showed 34 percent of uninsured say they plan to stay uninsured. The most common reason cited was that they consider health insurance to be too expensive. Others are simply opposed to the health care law or think they are healthy enough to go without insurance. But the poll revealed lingering hurdles for the Obama administration. Seventy-percent of uninsured Americans said they did not know about the law’s subsidies, which are meant to defray at least some of the additional costs from buying health insurance…. About half also said they hadn’t heard about the looming enrollment deadline.

10.) “Obamacare co-ops exploit dodgy pricing,” writes Megan McArdle:

One of the lesser-known provisions of the Affordable Care Act provided funding for the establishment of health insurance cooperatives, nonprofit local insurers that provide policies on the exchange. My colleague Alex Wayne reports on the major inroads they’re making in some markets: “The successful co-ops ‘emerged as price leaders,’ responsible for more than a third of the lowest-premium plans offered on U.S. exchanges, according to an October report by the consulting firm McKinsey & Co.”

…You can read this development in two ways. One is as the surprising success of an innovative business model. And the other is as a potential fiscal disaster. My general understanding of health insurance markets is that they are very, very tightly priced….And maybe that’s what the Obamacare phones are for. An insurer with 80 percent of the state market, however, cannot be lowering its prices through cherry-picking patients….And what with all the mandates, an insurance company can’t be offering dramatically reduced benefits, either. Which suggests a worrying alternative possibility — that the inexperienced co-ops have systematically priced their policies too low. That could hit the taxpayer in two ways: through the risk-corridor payments, which will make up excess losses, and through the $2.1 billion worth of government loans that have been made to these insurers.

11.) Here’s a link to the nag toolkit from HealthSourceRI if you want to do the “nagging.”

12.) Megan McArdle says “Young invincibles are killing Obamacare”:

As we head into the final few weeks, we have a pretty good idea of how many young healthy people there will be, and the answer is: a whole lot fewer than the health-care wonks were expecting.

But wait a minute! I hear you cry. We don’t know any such thing! After all, everyone expects a lot of young healthy people to wait until the last minute! Are you saying they’re wrong? Not exactly. I too expect the demographics of March enrollment to skew younger than prior months. But at this point, unless that enrollment is truly massive, I don’t think that will be enough.

13.) The White House has decided to combine March Madness with Obamacare, and released “The 16 sweetest reasons to get covered” (complete with GIFs): “As millions of Americans scramble to fill out their March Madness brackets, we’ve got another big milestone coming up: the March 31st deadline to sign up for health insurance. If you need affordable coverage, head over to and #GetCoveredNow. If you’ve got insurance, help spread the word by voting for your favorite reason to get covered.”

14.) The Daily Beast comments on the White House’s latest tactics to get the uninsured to enroll, including the “Between Two Ferns” appearance the president made last week:

An administration fighting to get Obama’s signature achievement up and running can’t afford to be genteel. A White House official says that videos touting the ACA in humorous, and sometimes irreverent, ways by YouTube stars and influencers with their own platforms—together with the “Two Ferns” video—garnered 17 million views in the past week and a half….

The administration has gotten celebrity basketball stars LeBron James, Magic Johnson and Alonzo Mourning to do 30-second spots that will air on ESPN, ABC, TNT and NBA-TV, highlighting the importance of getting covered if only to protect against that stray sports injury that can cost a bundle of money if you’re uninsured. On Tuesday, HHS (Health and Human Services) is releasing a report on the economic cost of common sports injuries to bolster the message from the athletes. For 25 to 40-year-olds, the estimated average charges for a leg fracture were about $3,403; for an arm fracture about $7,666, substantial bills for the uninsured.

Follow AEIdeas on Twitter at @AEIdeas.

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