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Is Obamacare Finally On Track And Moving Toward Success?

Thu, 01/02/2014 - 9:08am
Robert Laszewski

After the disastrous launch of Obamacare the enrollment of 1.1 million people in the 36 state exchanges run by the feds is a major accomplishment. It is likely that the enrollment in the 14 state-run exchanges will take total Obamacare’s private insurance enrollment to near 2 million for the year.

Does this mean that Obamacare is finally on track and moving toward success?

At least the front-end of Healthcare.gov is now clearly working.

I will suggest there are still some very important questions for Obamacare that need to be answered.

First, how many of these new enrollments are people whose policies have been cancelled under Obamacare?

As I have said on this blog before, I expect at least 80% of those in the existing individual health insurance market to lose their coverage by the end of 2014. Half of the market bought their coverage after March 2010 and therefore cannot continue while most of the other half of the market will not qualify under the Obama administration’s stringent grandfather rules.

What we don’t know is just how many of these people had to buy new coverage on January 1 given the widespread offers by carriers to “early renew” their coverage into late 2014. Then the president asked insurers and states to allow people to keep their coverage another year. It appears about two-thirds of the states went along with that request. Then many of the cancellations won’t occur until they renew throughout calendar year 2014.

We do know that California did not allow insurers to continue coverage for another year leading to 800,000 cancellations on January 1 and 200,000 cancellations by March. The state exchange has said that 300,000 of these are subsidy eligible and they can only get a subsidized policy on the exchange.

California will likely announce they have signed-up about 600,000 people this year. But given the cancellations that are occurring by January 1, is this a big accomplishment?

Washington state cancelled 260,000 policies and also did not allow the cancelled policies to continue past January 1. Half of these polices are subsidy eligible and can only get a subsidized policy in the state insurance exchange. Washington state might report 100,000 private plan enrollments by year-end. But if they cancelled 130,000 people who can only get a subsidized policy in their exchange, is this a big accomplishment?

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