Is Obamacare Covering the Uninsured? Maybe—But Not As Much as the Administration Says


Is Obamacare reducing the number of uninsured? The Obama administration, demonstrating its typical commitment to transparency and administrative details, says it's not tracking that information systematically. So we have to rely on independent sources of information.

A survey last week from consulting firm McKinsey made big headlines when it found that only about 27 percent of people signing up for private coverage under the law—both within the exchanges and through other means—were previously uninsured. Supporters of the health law weren't too thrilled with that finding, but they're happier with new survey results from Gallup, which suggest that, in just two months, the law has reduced the uninsured rate from 17.1 percent at the end of 2013 to 15.9 percent this year.


This indeed the best evidence that Obamacare is having some effect on reducing the percentage of uninsured. It's a robust survey that collects data from 500 people, almost every day of the year, and it's the second month in a row that Gallup's poll has found a drop.

But what we want to know in order to gauge the law's success isn't simply whether Obamacare is having any effect on reducing the uninsured rate at all. We also want to know how big that effect is, and from what baseline we're measuring.

Part of the reason the recent drop looks as big as it does is because there was a significant, unusual uptick in the uninsured during the second half of last year. It's not entirely clear what caused that spike, although cancellations resulting from Obamacare are probably part of the story. But the uninsured rate has fallen from its peak and now only about a half percent below where it was in 2010 and 2011, the two years after the health law passed.

Still, it's clearly falling. But how significant is the drop? Even measured against the fourth-quarter 2013 baseline of 17.1 points, you're not looking at a huge number of people. That 1.2 percentage point reduction is equal to about 3 million people. And that's the total coverage increase—private plans inside and outside the exchanges as well as the Medicaid expansion.

That's a lot smaller than the numbers that the White House has been touting. Near the end of February, the administration said that 4 million people had signed up for coverage in the exchanges, and that 9 million people had been judged eligible for Medicaid. Now, we already know that those numbers are inflated for a variety of reasons. About 20 percent of private-plan exchange sign ups haven't paid. And the majority of those deemed Medicaid eligible were already covered by the program.

So it could well be that Gallup's numbers are basically on the money, and so are McKinsey's. Which would mean that instead of the 13 million people the administration the administration counts as having obtained coverage under the law, the total gain in coverage for the previously is really more like 3 million, most of which comes through the dysfunctional Medicaid system. If so, that's not nothing, but it's a lot less than most anyone who supported the law predicted or hoped.