Obamacare

Obamacare's Bogus Enrollment Claims

The program has failed in extending coverage to the uninsured.

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Obamacare
U.S. Government

Despite the last-minute fiasco of the federal Obamacare website's shutting down before the Monday sign-up deadline, Barack Obama's administration is rejoicing that the program met its original enrollment target of seven million people. "No one expected us to come back from the brink … but we have," gushed White House spokesman Jay Carney.

But Americans don't seem to be sharing the administration's enthusiasm: Support for the law hit new lows last week.

So why are Americans enrolling with such a heavy heart? Namely because the Affordable Care Act has created more losers than winners.

President Bill Clinton famously predicted that Obamacare would start getting popular the day after it was signed. But an Associated Press/GfK poll last week found that support for the law has dropped 13 percentage points since 2010. Only 26 percent of Americans now say they favor it, compared with 39 percent then. Similarly, a Wall Street Journal/NBC poll a few weeks ago revealed that only 29 percent of independents support the law.

The administration blames this on misleading attacks funded by deep-pocketed conservative groups. The Washington Post's Wonkblog has accused Republicans of trying to build a "national narrative populated only with wrenching horror stories." But if Americans are buying Republican horror stories over the administration's hype, that's because those comport more with their experience.

Obamacare promised to cut the ranks of the uninsured and offer those already covered a better deal while bending the cost curve. Such rosy predictions, however, are not panning out.

The Congressional Budget Office (CBO) projected in February that the ACA would slash the nation's 48 million–strong uninsured population by 13 million. (This was scaled back from its previous projection of 19 million, as The Washington Examiner's Philip Klein notes.) But the ACA is not close to hitting even that more-modest target.

Consider how its three main mechanisms for extending coverage have fared.

First off, the exchanges: The seven million enrollment figure that the administration is bandying about is misleading. The actual number of uninsured covered by the marketplace will be much smaller. For starters, if the current trend continues, 20 percent of the seven million will drop out without paying. Out of the remaining 5.6 million, only about half were likely previously uninsured. Why? Because reliable early surveys found that a whopping 65 to 90 percent of those flocking to the exchange already had insurance. Even assuming that uninsured people were waiting until the end to sign up, it is hard to see how that figure would exceed 50 percent, given that six out of 10 uninsured people surveyed by the Kaiser Family Foundation recently didn't know about the March 31 deadline and after being told about it, half of them still planned to remain uninsured.

Second, Medicaid. The administration claims that the ACA's expansion of Medicaid has allowed four million to 4.5 million uninsured people to gain coverage. But a substantial portion of that stems from regular Medicaid growth (unrelated to Obamacare). In January, Real Clear Politics' Sean Trende estimated the number to be closer to 400,000, although he expected things to improve as the sign-up deadline approached. And last month, Avalere, a health advisory company, put the new enrollees due to Obamacare at 2.4 million to 3.5 million. (Some states are reporting higher rates of uninsured Medicaid enrollment, but it is unclear how representative or reliable they are or how many of these uninsured might have been covered even under the old eligibility criteria.)

Third, the provision that allows 26-year-olds to stay on their parents' plans. The administration claims that this provision has extended coverage to three million young people. But that's a false assumption, given that at least some portion of them are college students with university coverage or self-employed with insurance from the individual market. Forbes' Avik Roy estimates that the real figure is closer to 890,000, meaning that the administration's figure represents an over 200 percent exaggeration.

All of this adds up to less than seven million uninsured being covered by Obamacare, which means that the program fell 46 percent short of CBO's 13 million mark.

However, even that overstates the ACA's success in tackling the uninsured if you consider all the people who have lost coverage.

Among the ACA's first acts was to abolish almost five million so-called junk plans in the individual market — plans that didn't meet its standards. The administration backed off for a year after a massive outcry. But it was too late for most insurance companies to restore them. In addition, many large employers such as Target, Home Depot and Walmart have dumped coverage for tens of thousands of part-time workers.

These insurance refugees constitute at least half the people buying coverage from the Obamacare exchanges. But if they don't qualify for subsidies, they face higher out-of-pocket costs for plans that cover things they don't need and leave out things they do.

For example, the Los Angeles Times found last year that middle-income consumers in California face an estimated 30 percent rate increase in their insurance bills "due to several factors tied to the health care law." Such factors include limitless lifetime coverage and many benefits such as hair prosthetics for cancer patients that many people don't care about. But what patients do care about — their choice of doctors and hospitals — they can't get because that would further bump up premiums. (The usually excitable Ann Coulter wrote a sobering account of her difficulty in finding her choice of providers under even the most expensive Obamacare plans here.)

Nor are things likely to get better next year. That's because the mix of the new Obamacare sign-ups is so skewed toward the old and the sick that some experts are expecting premiums to double.

So, to recap: Obamacare has extended coverage to a far smaller portion of the uninsured than expected, caused millions of others to lose coverage, raised out-of-pocket costs for many middle-income consumers, diminished patient choice of doctors and hospitals and exposed Americans to future premium hikes.

This is why Americans are not popping the cork. Nor should the administration.

A version of this column originally appeared in Al Jazeera.