Obamacare's Underwhelming Success in California

Supporters of Obamacare have
pointed to California as one of the law’s biggest success stories.
After some initial glitches, the health exchange has, by most
accounts, been mostly functional. The state’s exchange accounted
for the lion’s share of private health insurance sign-ups
nationally during the early months of open enrollment. And reports
suggest that, even in 2014, is has continued to add new sign ups at
a solid clip. Earlier this month reported that just over 500,000
people had signed up for policies in the exchange by the end of
2013, and that early reports indicated that about 625,000 had
signed up by January 15. That put the state on track to meet its
enrollment target of about 500,000 to 700,000 for the year.

But those numbers don’t tell the whole story. For one thing,
they don’t tell you how many people have actually paid for their
plans. Insurance industry consultant Robert Laszewski has
said that he expects that 10-20 percent of sign-ups will not
result in an enrollment because of non-payment.

The headline numbers also don’t tell you how many people signing
up for coverage in the state’s exchange are actually getting
coverage for the first time, and how many were previously
covered—and are simply moving into the exchanges because their old
policies were canceled.

When you factor in cancellations, the picture no longer looks
quite so bright. In October, a spokesperson for the state’s
exchange
estimated that about 900,000 individual market plans would be
canceled in the state by January 1 of this year as a result of
Obamacare—a figure that the state exchange recently
confirmed to The Weekly Standard’s John McCormack (who
wrote about the gap between sign-ups and cancellations last
week).

So even if the state hits the top end of its enrollment target,
the state will still have had more canceled existing policies than
exchange enrollments—in a state that
received more than $900 million in federal grants to build and
advertise its exchange. In context, California’s experience with
Obamacare so far looks less like a success story and more like a
reminder of how low the bar for success under the law has been
set.