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August 12 2014

ObamaCare: Dropouts on the Rise

Patrice J. Lee

A clearer picture of how many Americans really enrolled (and continue to be covered) by ObamaCare is coming in to focus. Insurers are reporting sizable drop-off rates, which if they hold across the board, could mean close to two million people dropped out of ObamaCare since the end of the first enrollment period.

Enrollment for Aetna, the nation’s third-largest health insurer, had fallen 30 percent since the end of extended open enrollment. Aetna reports that by the end of June they had fewer than 600,000 paying customers down from 720,000 people who signed up for ObamaCare exchange coverage by mid-to-late May. Furthermore, they expect those numbers to fall to just over 500,000 by the end of the year.

According to experts, Aetna’s drop-off rate appears to be higher than other companies, but if it is average that could mean the 8 million enrollment number the Administration touts is really less than six million. This points to be a big asterisk in the enrollment numbers that we have always pointed to which is that enrollment should not count those who have yet to pay for their coverage. Doing so pads the numbers.

The Administration is been tightlipped on enrollment numbers since open enrollment ended and no doubt it’s because they hesitate to admit these high attrition rates.

Investor’s Business Daily reports:

ObamaCare exchange statistics should clear up any doubt as to why the Obama Administration has been tight-lipped about enrollment since celebrating 8 million sign-ups in mid-April.

Reality, evidence suggests, could require quite a come-down from those lofty claims.

The nation's third-largest health insurer had 720,000 people sign up for exchange coverage as of May 20, a spokesman confirmed to IBD.

Still, as one of ObamaCare's largest players, participating in exchanges in 16 states plus D.C., Aetna's experience provides a pretty good window into what is happening across the country, and there are other indications that enrollment has turned down.

Other major insurers danced around questions about attrition on recent earnings conference calls, but none denied that it was occurring.

The gap between the high watermark of sign-ups and the number of current premium-paying customers reflects both those who never sent in a first payment and those who stopped paying for any number of reasons. For some, finances may have been too stretched. Some may have gotten fed up with high deductibles, and others could have switched plans so they wouldn't have to switch doctors. Still others may have found a job that came with health benefits, or others lost income and qualified for Medicaid.

When balanced against the news that Americans with ObamaCare are paying higher costs for premiums and deductibles, the drop-out rate is not surprising. For both those who previously had coverage but now have more expensive health care plans and for those who were previously uncovered, the shock of the higher costs may be too much. Individuals and families have to balance healthcare costs against other expenses. 

Some posit that ObamaCare has lowered costs for Americans and for some older, sicker patients that may be true as they now can be covered regardless of their illnesses. It’s also true for the 85 percent of enrollees who qualify for some sort of taxpayer-funded subsidy. But if you remove the generous subsidies and enrollees have to pay full price, many probably could not afford it. Is the Affordable Care Act then truly affordable as its name claims?

ObamaCare is turning out to be a bad deal. That’s not just a tagline but a truth that Americans are learning increasingly.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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