ObamaCare’s third enrollment period closed without a bang – it was more like a fizzle. Early reports and indicators show that the final wave in sign-ups was unimpressive and that doesn’t bode well for long-term sustainability.
The Administration has yet to release tallied sign-ups, but insurers are reporting that the pace has been slower than last month and previous years and that the expected last-minute surge appears not to have happened. Some peg the difference at 75 percent of the pace in mid-December, which was the deadline for coverage beginning in January.
This could indicate that sign-ups, including both those who re-enrolling and new customers, has hit a plateau and that there is not enough of an incentive – whether lower prices, quality of care, or access to healthcare providers– to attract more people to ObamaCare. Even with generous taxpayer subsidies that, in many instances, cover 50-70 percent of premium costs and a tax penalty for not carrying any healthcare coverage rising to an average of more than $900 (with a minimum of $695), uninsured Americans aren’t attracted to ObamaCare.
"Just as we get into high gear for the 2016 elections, the [Affordable Care Act's] growth would appear to have stalled," said [Insurance analyst Robert] Laszewski, who is head of Health Policy and Strategy Associates in Alexandria, Virginia, and a critic of Obamacare.
"One of the big players" told Laszewksi that it expected to see an actual net reduction in sign-ups from its customers from the government-run Obamacare exchanges in the final week compared to the same period for last year, he said. Another told him that while sign-ups spiked on Saturday and Sunday, they were doing so off of a very low base of sign-ups earlier last week.
Laszewski said that while Obamacare has done a good job of enrolling people with lower incomes, who qualify for federal subsidies that can sharply reduce the cost of their plans, it has not done a good job of luring middle-class customers, who often find the premium prices and deductible limits unattractive.
And "what's really obvious," he said, is that the Obamacare fine is not doing much to spur customers to sign up. That fine is growing this year to the higher of $695 per person or 2.5 percent of household income.
This enrollment period is crucial for the sustainability of ObamaCare. The Administration desperately needs young and healthy Americans to buy into a system where they pay more to subsidize the costs for more expensive users such as those who are older, sicker, or use healthcare services at a higher rate.
Insurers have been watching their systems carefully and are beyond concerned. Re-enrollments may initially pad the numbers of sign-ups, but as we know, unless a new customer pays her first month’s premium, she isn't really enrolled. Health insurers know this and realize there will be dropouts from the initial enrollment figures. The healthcare analyst above noted that one of his insurers expects significant cancellations. Customers who were automatically re-enrolled in plans (likely more expensive this year because of rising costs) plan to cancel their plans and his company will cancel the plans of those who fail to pay their premiums.
Now, the head of the third largest U.S. health insurer is echoing sentiments shared by heads of its rivals at UnitedHealth and Aetna, that ObamaCare enrollments are worrying according to BloombergBusiness:
“We continue to have serious concerns about the sustainability of the public exchanges,” Aetna Inc. Chief Executive Officer Mark Bertolini said on a call Monday while discussing the company’s fourth-quarter results. “We remain concerned about the overall stability of the risk pool.”
In the past, Aetna had been more upbeat. Bertolini said in October that it was “way too early to call it quits on the ACA and on the exchanges,” and that the health law offered a “big opportunity.”
“We believe we have an obligation to stick it out and work with it until we know that it won’t work,” Bertolini said last month. “It is too early to give up on this process.”
Bertolini’s backtrack from earlier support of is another sign of trouble on the horizon for ObamaCare. We’ll keep tracking ObamaCare’s sign-ups and enrollments which are likely to fall short of even revised estimates and the impact it will have on the system. However, it’s fair to say that, as the fundamentally flawed un-Affordable Care Act continues to age, it will only get worse and serve as a reminder that sweeping government spending program is not the solution to the needs of Americans.