Obamacare’s supporters have always claimed that the law will help increase the number of Americans with health insurance. But an analysis released yesterday provided persuasive data showing that the number of people losing coverage under Obamacare could exceed the number of people who gain it.
Health insurance industry expert Robert Laszewski’s updated analysis of Obamacare’s insurance exchanges included the following nuggets:
The U.S. individual health insurance market currently totals about 19 million people. Because the Obama administration’s regulations on grandfathering existing plans were so stringent about 85% of those, 16 million, are not grandfathered and must comply with Obamacare at their next renewal. The rules are very complex. For example, if you had an individual plan in March of 2010 when the law was passed and you only increased the deductible from $1,000 to $1,500 in the years since, your plan has lost its grandfather status and it will no longer be available to you when it would have renewed in 2014.
These 16 million people are now receiving letters from their carriers saying they are losing their current coverage and must re-enroll in order to avoid a break in coverage and comply with the new health law’s benefit mandates––the vast majority by January 1. Most of these will be seeing some pretty big rate increases.
In total, 16 million people who purchase insurance for themselves could lose their current health plans on January 1. And that number doesn’t even count the Americans losing employer-provided health coverage—because their firms are dropping spousal coverage or dropping coverage for part-time workers.
Earlier this year, the Congressional Budget Office (CBO) estimated that in 2014, Obamacare would enroll 7 million people in exchange coverage and 9 million people through Medicaid. (Medicaid’s problems with physician access and patient outcomes are so widespread that some beneficiaries don’t consider the program “real insurance,” but that’s a separate story.) The CBO total of 16 million who will gain coverage is exactly equal to the 16 million Robert Laszewski estimates will lose their existing health plans due to Obamacare’s new mandates.
But based on the opening weeks of Obamacare’s open enrollment period, it’s far from certain that the CBO’s estimate of 7 million exchange enrollees will be reached. Laszewski estimates that only 20,000 people have actually enrolled in health plans in the 34 states using a federally run exchange. Based on internal Administration estimates obtained by the Associated Press and released earlier this week, enrollment is well behind even its meager projections for the first few weeks of open enrollment. Moreover, the ongoing technical difficulties faced by insurance companies and users alike give little prospect for massive new uptake any time soon.
Given the ongoing exchange chaos, it’s entirely likely that Obamacare could result in more people losing their current health insurance next year than obtaining new coverage. Any way you slice it, that’s not reform.