Is Obamacare finally on track and moving toward success?

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?

The good news is that Obamacare will likely enroll almost 2 million people in 2013.

Even if we ignore that fact that many of these people were previously insured and had to replace cancelled policies (there were more than 400,000 subsidy eligible cancellations in California and Washington alone), 2 million people are only 10% of the 20 million uninsured in the U.S. who are eligible to buy coverage in the health insurance exchanges.

If we net out the cancellations, has Obamacare signed up 5% of the uninsured, or 6%, or 7%? Whichever, it’s not even 10% net of the cancellations.

Is this relatively small percentage of the uninsured who have signed up mostly the healthy or the sick?

We don’t know for sure. But logic would say that the first people through the door had to include the sickest and neediest people. The smaller the enrollment number, the more likely it is dominated by the sickest. Consider this fact about health and population: 2% of the population accounts for 50% of all health care costs. The long-time underwriting rule is that it takes 70% of an eligible group in order to get a sustainable pool – meaning we need 70% of the 20 million uninsured net of cancellations, or 14 million, for a truly sustainable risk pool.

Will millions more sign up by March 31?

The Obama administration will now argue that Obamacare has lots of momentum and three months to sign up a sustainable pool with lots more healthy than sick.

They are right.

Obamacare has three months to attract the people, most importantly healthy people, who have been sitting on the sidelines so far.

Will these people sign up in adequate numbers to make Obamacare sustainable?

The Democrats have been fond of saying that once Healthcare.gov is working people will be able to go to the site and see for themselves just how attractive Obamacare is.

The front-end of the site is now finally working quite well – in contrast to the very serious back-end issues that still remain.

I suggest you do what the Democrats have been suggesting and visit Healthcare.gov. When you do, you will find that the entry page has a big icon on the left side, “See Plans Before I Apply.” Click on that and enter a sample age, state, county, and sample income. You don’t have to create an account or enter any personal information. You can take a look at any of the 36 federally run states. The site will show you all of the plans available, including the deductibles and co-pays with premiums that are net of subsidy. Unfortunately, most plans won’t let you checkout the provider network on the federal site.

Take a look. Put yourself in the shoes of lower middle-class and middle-class people who will likely have to pay 10% of their after tax income, net of the subsidy, for plans with an average silver plan deductible of $2,567 and an average bronze deductible of $4,343.

Will millions more buy Obamacare before March 31?

Robert Laszewski is president, Health Policy and Strategy Associates and blogs at Health Care Policy and Marketplace Review.

Comments are moderated before they are published. Please read the comment policy.

  • John C. Key MD

    I will be surprised if that many sign up. My son, for example, is 31 and has pre-existing conditions. He does not qualify for the subsidy. The medications he takes are non-preferred. He would pay $160 a month for the most basic plan, but would have to satisfy a $6K deductible before any coverage would apply. He doesn’t want to sign up…doesn’t make economic sense. The several providers he sees are not participating.

    I don’t think his situation is that unique.

    • querywoman

      The way I read it, he doesn’t have to apply unless his family income is more than 300% of the federal poverty level and the premium is no more than 10% of his modified gross program.
      At $160 month, that’s $1920 per year.
      Would he spend enough to meet his deductible?
      The Affordable Care Act benefits insurance companies mostly!

  • buzzkillerjsmith

    Will it be a success? Nobody knows. We can’t even agree on what success is.

    Many people will have a lower risk of financial ruin because of HC costs and that is a good thing. But you and I and everyone at this blog knows that Obamacare was insurance reform, not medical care reform.

    Will new pts swamp outpatient primary care and wind up in the ER, increasing costs? Maybe. Will people be angry that the good stuff promised to them, especially things like preventive care, will be unavailable because of the shortage of docs and NPs and PAs? Maybe.

    Will all this save America money? I am very skeptical of this.

  • http://onhealthtech.blogspot.com Margalit Gur-Arie

    Here is what I don’t understand: According to the Census Bureau, there were 48 million uninsured in 2012. The latest Obamacare numbers show 2.1 million signing up on the exchanges for private insurance (including cancellations) and 3.3 million enrolled in Medicaid (including renewals). Let’s say 5.5 million, and maybe some of those were previously insured anyway, per Bob’s numbers. Generously, 3 million newly insured, which is a bit over 6% of the uninsured. The unknown quantity here is those who were previously insured, but are not anymore. Some of the numbers floating around (in the pro-Obamacare media) put the cancellation rate at 5 million and growing.
    So if we want to talk about “net” numbers, I would tentatively estimate that “net” at zero.

  • http://onhealthtech.blogspot.com Margalit Gur-Arie

    It does cover out of network, presumably at the same lower rates as before the ACA, and at a much higher deductible.

  • querywoman

    The current law appears to allow people who don’t meet the income exemptions for the ACA to argue why they should not have to pay it. Add that add many ridiculously complex layers to the income tax process.
    Plus, it brings up issues of fairness. Why exempt one family and not another?

    That’s not consistent with American law.

  • querywoman

    Yes, that’s the way I read it. You would argue to the IRS, I think, about why you should not be penalized.
    Perhaps some people who are never sick might not want to pay.
    How is the ACA feeding the medicos with $5000 deductible plans? It’s feeding the insurance companies.
    Of course, conservatives love to subsidize private businesses to “feed the economy.”

    • Bob

      IRS? The IRS? Who determines subsidies based on Social Security Numbers given out in 1935 by the US Postal Service and abandoned as a form of identification in 1975 and used by illegals before and since?
      That IRS? the ones wearing miner caps with little lights on them?
      They can’t collect revenue so how do you think they’ll do giving money back, or collecting fines?

      • querywoman

        Heh! Your guess is as good as mine!

        • Bob

          My guess, in case you didn’t’;t get my sarcasm is P_ _ _ Poor as they do or not do everything else!
          How about a flat tax to get rid of them all together?

          • querywoman

            Didn’t get your sarcasm? I left the IRS in unpleasant circumstances. No need to elaborate.
            Many of my ex-employers have either left town or gone out of business.
            I keep hoping that the IRS will eventually do likewise, but it hasn’t happened yet.

  • Bob

    Ah, finally the first day of ObamaCare that all have waited for!

    What’s different today? Nobody knows yet, except there are millions more with insurance cards, on Medicaid and with new taxpayer subsidies !

    What’s remains the same? There are no more, physicians, [including PA's], or nurses [including NP's] or hospital care staffs, or pharmacists or any other care givers!
    So today we have figured out how to put 3 pounds in a 2 pound paper bag without breaking it!
    Or not!

  • querywoman

    I barely know one person, from my church, who is thrilled with his new ACA plan. I researched him then. He’s a licensed professional counselor who owns a clinic.
    So he has made his living off private insurance himself for years, when he could not get it himself. He can probably afford his policy and will get credits for it at tax time.
    Home health aide is one of the fastest growing jobs in this country. The home health agencies are in the Medicaid and Medicare kitties heavily, but pay low and have no benefits. Their employees cannot afford an ACA policy. Plus, to make a living, most of them have to work for several agencies. That makes advanced tax credits to buy health insurance really hard, when they probably don’t even get $500 per month from a single job!

  • querywoman

    Yup. More holes than Swiss cheese is the best summation of it I’ve read yet.
    I keep researching the issue. I think you can take a religious exemption. It’s so easy to organize a religion and register it. So maybe a new church will form for people who don’t want to pay.
    You can be exempt with an unpaid medical bill in the past 24 months. So, just go to the ER and don’t pay the bill.
    Another easy exemption is a utility bill cutoff notice. So, one can let their electric bill go until the cutoff notice comes and then pay the bill. And use the notice for an exemption.
    Absurd!
    Meanwhile, I’m still wondering if the IRS will ever leave town.

    • Deceased MD

      LOL and I am glad you liked my description. So let me get this straight. I don’t really understand it. if you don’t pay your ER bill you can forgo ACA? Why?
      And the religious part is very humorous. Please fill us in on any other findings querywoman!

      • querywoman

        Any unpaid medical bills for past 24 months. That’s how that works!
        If a person has an unpaid medical bill, they need insurance to pay it, so why exempt him or her?
        What really cracks me up is the utility cutoff notice. A rich person can pull that number. Even if one has millions or billions in the bank, they can’t be made to pay bills timely!
        In America, you could claim a religious exemption on lots of stuff, like vaccines.
        None of the above constitutes fraud! It’s too stupidly easy to get out of the ACA.
        Wonder how long it will take them to fix these holes?
        Existing Prez Slick Willy signed a flurry of law into being in the last few days before Prez Dubya swept into the White House, including one regulating the number of holes in Swiss cheese! No further comment on the last tidbit.

        • Deceased MD

          Amazing. This country is going to h@ll in a handbasket. Apparently in North Dakota where energy companies are drilling or fracking, one company in particular did not get the appropriate license to drill. The penalty of 10 K a day was forgiven. And the state regulators said that it would discourage other energy companies if they penalized them. I think it’s called anarchy-both examples. Yours and mine.

      • querywoman

        No secrets here. Just quit pulling thoughts out of the hat and go straight to healthcare dot gov slash exemptions. This site doesn’t like hyperlinks, so I spelled it all out.
        There’s also a place there that tells you how to file paperwork to request exemptions.

        I think the best way to avoid it, since the deadline for enrollment has passed, might be to go to ER and run up a bill.
        Well, we don’t need to flood the ER.
        I don’t suppose the IRS will leaving my town or Dodge City anytime soon, since the ACA creates make busy work for tax workers..
        Perhaps the ACA is an occult plot that simply aspires to guarantee job security for IRS employees.

        • Deceased MD

          haha. Excellent point. The ACA and HC in general before ACA is all about administratium as i call it. The heaviest chemical element in the periodic table known to man.

          Thanks for the link on that BTW. It sounds really absurd. It is almost embarrassing to be an American.

          BTW if you are interested for a laugh, Search for ,”

          New chemical Element Discovered by William DeBuvitz. He was a physics professor who was disgusted with his admin. It was written in 1989 I think, but you will see the relevance to the ACA and HC today.. It is quite humorous.

          • querywoman

            Ha! Ha! DeBuvitz is brilliant!
            The one surety with the ACA is that it has just begun to and will continue to cause the element administratium to multiply in our presence.
            I keep researching the ACA. Maybe one can’t get an exemption granted for just any ole reason, but the utility cutoff notice is a great one. As long as a household pays utilities to a utility provider, it can pull this number. Even The Donald could do it.
            I’m wondering when the 24 months allowed to have an unpaid medical will begin and end. I’m on Medicare, so the ACA really doesn’t apply to me. I’m still paying some doctors for a hospitalization in October and November 2012.
            I also have not paid my small copayment on some glucometer strips that were recently delivered. I don’t think I have a bill yet.
            Now I have clicked around the net and reviewed a form for an ACA exemption. More administratium.

          • Deceased MD

            So glad you liked it. I tried to post it here but they wouldn’t let me. It is hilarious and I have never forgotten it since it always pops up. I guess you might have seen we have 30 admins per doc.now compared to the 90′s where I forgot but think it was under 10 for sure.
            It is amazing many think medicare for all is the way to go. What do you think? Compared to the ACA amazingly maybe it is more efficient? Have you had any problems with access to care if I may ask with medicare?
            I know there was a pain MD who recently wrote a piece here who said that he was having trouble that in his new private practice this year the payments are too low for him to accept medicare. Not sure if anyone out there has run into this sort of thing. Meaning that private docs will be out of luck and only huge corporate hospitals will take medicare which of course drives up cost. Anyway I am sure this is not new to you reading the blogs here.

            The exemptions are really out there. So I guess if you really don’t want insurance there are easy ways out. Maybe that is what all this absurdity is about. And bingo like you said just creates more jobs for IRS administratium!

          • querywoman

            Love ya, zombie doc typing.
            Medicare works great for me. I pay my deductible in cash, and after that, I just pay my 20% copayment in the office. My derm bills me for the copayment.
            I have original Medicare, because I will not have my access to dermatologists and endocrinologists limited.
            I find, now that I have Medicare, and I am disabled, that doctors seem to take my illnesses more seriously than when I had private insurance and worked. Of course, I got more taken seriously anyway after I went in to diabetes.
            Around here, there are plenty of docs who take Medicare. If private docs started dropping it, I could go to university docs or docs at big medical centers.
            My father used to go to the VA and wait. It took him forever to realize that all he had to do was pay the Medicare deductible out of pocket and then 20% after that and not have to wait all day at a private office.. He wasn’t too cheap to do that.

            I think Medicare for all would be a good idea.
            As for the exemptions, yes, they are there. I see doctors, like lots of other people, arguing here that the ACA is this or that without checking the site. Go to the government agency itself and ask! Don’t listen to anyone else! I’m always amazed at the people who don’t do that.
            When I worked in food stamp land, I’d have people saying something like my friends said I couldn’t get them because I don’t have any kids. And I say, don’t listen to your friends, just call us up and ask them.

            Now I’m researching the ACA on the IRS site. I think this Swiss cheese policy has way too many holes in it and that the exemptions are too flexible to be in the tax code!
            Vast inequities are possible in the way the ACA is written, as I pointed out to you that a rich person does not have to pay the electric bill timely.
            I am looking for people to start “new religious groups” that meet the regulations to be used to claim religious exemption from the ACA. Someone always pulls that number! Free speech, freedom of expression, whatever, in the US.
            Neither President Bush was as conservative as someone like Reagan. They didn’t want to starve anyone or deny medical care. Dubya expanded neighborhood/community clinics as a way to deal with the uninsured.
            That was simpler. I’m not arguing the merits of Dubya’s way or the ACA, just pointing out I find the ACA ridiculously complex. Now that I have pointed out the exemptions to you and got you really researching them, you agree.
            I wonder if the utility cutoff exemption will be eliminated by April 15, 2016, filing time?

          • Deceased MD

            Glad you like my pen name. Most of the time I feel like a zombie as you say. It is very draining to deal with insurance hence the invention of my name.
            . So interesting that you like medicare. And the 20 percent is not too high if one needed a procedure, I am thinking it could add up. The problem I see is that with the ridiculous inflation, 20 percent of the escalating prices is a lot. But maybe medicare is controlling costs more than I realize.
            I am sure that all these rules that are posted will keep getting modified so hard to say about 2016.

            But I am beginning to think as bad as medicare is–I guess you know that Big Pharam does not have to negotiate costs with medicare. Thye get whatever they ask for. I would think that is a major factor in huge costs. But as bad as it is, maybe it works better than the ACA.
            i don’t think the ACA can really force everyone to get insurance. and we will find that out. As you point out there on the site all the crazy exemptions. So people will do whatever they want or think is best for them.

          • querywoman

            I’m glad you are coherently reading and responding to my posts. If you did not really know about the exemptions today, well, a lot of doctors aren’t very good bureaucrats.
            The insurance industry has forced you people to into bureaucracy.
            I keep seeing posts about so many doctors dropping Medicare, etc. I’ve heard this for years. Just like every year of my life, probably after toddlerhood, I heard every Christmas that there were people going hungry and poor children who needed toys.
            The way I understand the ACA transition, Medicare will not be affected. I’m hoping what I get stays stable and undisturbed.
            So many private insurance has used the ACA as an excuse to jack up premiums to a level that many of the employed are dropping their coverage.
            I think most American doctors will soon come to appreciate the undisturbed level of care that Medicare provides.

          • Deceased MD

            I think medicare is more stable now-even with threatened paycuts-the usual. The ACA is new so I would say the swiss cheese is more in this arena.

          • querywoman

            I am going to research deeper into the tax rules to see if a “rich” person can really get out of buying into the ACA by presenting a utility shutoff notice.
            This will take me a while.
            I can’t see someone we would really consider wealthy doing that, but people in maybe the $80,000 to $150,000 annual salary range just might pull that one.

          • Deceased MD

            The lowest-priced coverage available to you would cost more than 8% of your household income is an exemption. That should cover everyone that is middle class and middle aged.

          • querywoman

            It does benefit the uninsured upper middle class, who were the most hurt in the existing system. They pay the taxes to support the rest of us, but got gouged for major illnesses.
            I had a cousin who had income but no insurance. She had a stroke, but only stayed half a night in the hospital with it. It was a suburban hospital. I can’t imagine a big church hospital or a public hospital letting her go like that.

          • Deceased MD

            That is horroble but happens more than we are all willing to know. i hope your cousin is OK and not worse off from the lack of tx.

          • querywoman

            She eventually died of cervical cancer. I don’t know how they paid for her care, but she did have it. We were not that close.
            After her stroke, she didn’t get any rehab. She also asked her doctor to give her low cost meds. That doctor sounded good to me. He also took some Medicaid and saw her mildly retarded son.
            We’ll see how many of these upper middle class people buy $500 per month policies.
            Her husband lived on investments and some inherited money after he stopped working. I wouldn’t know what the stroke bill was. They probably could have afforded $500 per month payments.

  • querywoman

    She was also apolitical. She didn’t vote. I don’t know about her husband. I only met him once. Perhaps he was apolitical as well.
    Many of the upper middle class are apolitical, just like the rest of the public, and do nothing to change their situations.
    I had suggested to her that she try getting followup at a church hospital in a nearby large city, but I doubt that she did it. The public hospitals usually work by zip code, but the churches don’t.
    She was in a “rich” county that dumped on a bigger Texas county for medical indigents. And that penalizes the upper middle class.
    Some people say oh, just let the rich empty their bank accounts on medical care. I don’t. They do pay taxes to support everyone else through their income, property taxes, and the cost of goods and services.
    Now that you have seen the exemptions, you can see that the ACA doesn’t provide affordable coverage to the middle-middle class, whomever they are, and lower. Many will be exempt.
    I’ve been reading more into the IRS stuff about exemptions. I have not gone into the even more detailed tax code, but nobody has to buy into it if will cause them to go without food, shelter, and other necessities. Just common sense!

  • querywoman

    I agree with you about the mysterious “true rich.”
    In the upper middle class, whomever they are, there are some people who have money because they are risk takers. They would not be frightened of a hospital bill.
    Then there are less adventurous types who would be afraid of a large hospital bill.

    Texas is all I have ever known. I’m liberal, but the state tends to be conservative. Nevertheless, health care is available for us all, except for adult dental.
    What happens when a person goes to the ER with a stroke?
    Blood work, tests, etc?
    She could not have been as bad as another relative of mine. That relative had a serious stroke in a large urban area, away from home. She had insurance, but she was taking to a public hospital because it had the best stroke facilities. Quite a setup! I visited.
    I think she did two or three weeks there, the early week or two stuck in a bed. Then she got two months in a rehab facility. She wears a brace on one of her legs now.
    I do know that the one who spent only a half night in the ER with her stroke had memory and fatigue problems….not surprising!

    • Deceased MD

      Texas sounds like a difficult state-at least with medicaid expansion-or lack there of. I imagine it’s hard to be a liberal in the sea of conservatives. Do the Texas politicians drive you batty?

      • querywoman

        Of course they do! Our fellow Americans refused to elect Phil Gramm or Rick Perry for president, while Texicans kept voting ‘em in.
        One of Judge William Wayne Justice’s last flaming liberal acts in Texas was to expand Medicaid for our children.