February 28 2014
Five Weeks from the Enrollment Deadline, is ObamaCare Holding Up?
There are just 5 weeks left for Americans to enroll in Obamacare health plans for 2014. Number crunchers are preparing to spin the data both ways: Obamacare supporters will claim that millions are being helped. Opponents will showcase a shortfall in the unimpressive enrollment numbers, compared to projections.
While enrollment numbers tell us something about how the law is working so far, they aren’t the only — or even the most important — measure for judging whether Obamacare is a success of failure.
Analysts believe that so far, around 9.3 million Americans have enrolled in an exchange plan or Medicaid. That sounds like a Very Big Number and evidence that the law is effectively helping a sizable portion of the population. But a closer look at these figures reveals their uselessness.
Many of Medicaid’s new 6 million beneficiaries would have qualified for the program anyway in previous years. And the majority of the 3.3 million customers who bought private plans through an exchange had some kind of insurance before this transition.
Furthermore, the enrollment numbers don’t tell us if these new customers really wanted Obamacare’s products, or were merely trying to comply with the federal mandate requiring them to purchase compliant insurance. Many of these “new” enrollees are likely drawn from the millions who saw their private plans canceled.
In fact, Obamacare may not have succeeded in reducing the rate of uninsurance, but instead just reduced the rate of people using private insurance. That’s not how the law was sold to Americans.
Obamacare supporters might suggest that helping only one sick person is worth the whole reform. And enrollment numbers don’t capture the supposed “security” that Americans have knowing that Obamacare’s additional protections are now in place.
So what other metrics can we use to evaluate the law’s impact? Here are a few to keep in mind in the months to come:
Provider Network Size: One measure of the quality of a health insurance plan is how many health care providers will accept the plan and serve its patients. The policies offered in Obamacare’s exchanges typically have much smaller doctor networks, and therefore place stricter limits on where members can access care. One study showed that in 20 U.S. metropolitan areas, two-thirds of Obamacare plans had “narrow” or “ultra-narrow” networks that limited access to top hospitals.
Access to Pharmaceuticals: Provider networks are reduced under Obamacare in an attempt to control the costs of the law’s highly regulated plans. The same is true for drug formularies, which are becoming more restrictive.
Health Insurance Costs: One fair assessment of a law titled the “Affordable Care Act” is whether it actually makes health insurance more affordable. Sadly, private health insurance premiums, on average, will continue to increase. A subset of consumers will pay less, because they suffer from a pre-existing health condition that was reflected in high premiums before Obamacare outlawed medical underwriting.
But most healthy consumers will pay more. Although subsidies and tax credits may help low- and middle-income consumers in the exchanges, the true, unsubsidized cost of coverage remains high. Plans purchased on the individual market are now subject to all of Obamacare’s mandates, and premiums in these markets will increase by an average of 41 percent, according to one analysis. Employer plans are not subject to all of the law’s mandates until 2015, but the trend in insurance costs to employers continues upward.
Cost-Sharing: Premiums are one measure of cost. Other measures include out-of-pocket expenses, like co-pays and deductibles. The average individual deductible offered in Obamacare’s bronze exchange plans is $5,081, a 40 percent increase from the average individual deductible before the reform.
Public Spending: Americans are frustrated by increases in their private health care spending, but the United States still continues to pay heavily for our health care through government funds. Public spending only increases under Obamacare. The expansion of Medicaid, along with about one trillion in subsidies and tax credits, are a couple of big-ticket items.
Furthermore, Obamacare included a few measures that protect and subsidize health insurance companies. Some have called this a bailout for insurers, but it is not an afterthought; this was always a part of the law’s design. The reinsurance fund, risk adjustment program, and risk corridor payouts in the law could cost much more than currently projected if insurance pools skew older and less healthy, or if the administration decides to expand these “protections” for health insurance companies. Taxpayers will be left holding the bag.
Anything can happen over the course of the next month. Perhaps millions of missing young, healthy adults will come to the rescue of the health overhaul and boost enrollment numbers to the intended levels. But even then, the law is failing on other important ways. In order to most accurately assess the health care law, we have to see the full picture, including the overall impact on all costs and access to care.