Obamacare’s Weak Enrollment Numbers

The primary talking point for Obamacare supporters these days is that the law has facilitated a significant reduction in the nation’s uninsurance rate. The percentage of uninusured in the United States dropped down below 12 percent last year, its lowest rate in years and a five point drop since Obamacare’s coverage expansion provisions kicked in, according to Gallup. And the law’s health insurance exchanges, one of its two key coverage expansion mechanisms, along with its expansion of Medicaid, has played a significant role in making that happen. Enrollment in exchange coverage increased from 6.3 million at the end of 2014 to about 8.8 million, according to figures released by the administration at the end of last week.

But Obamacare’s coverage gains have also been more modest than expected, particularly when it comes to the exchanges. And part of the problem seems to be that people who sign up for coverage at the beginning of the year don’t always follow through to keep their coverage effective at the end of the year. It’s a problem that seems to be larger than the administration knew.

Overall, exchange enrollment is short of where the Congressional Budget Office initially expected it would be by roughly 7 million people. And although the 8.8 million enrolled in the exchanges at the end of 2015 is a notable step up from the 2014 numbers, it’s also below expectations: The administration had targeted a figure of about 9.1 million, but came up short. And even if enrollment had come in at the administration’s target, it still would have represented a significant drop off from the 11.7 million people who signed up for coverage at the beginning of the year. The point is, there was a 25 percent decline from the number of people who were signed up at the beginning of the year to the number of people fully paid and still enrolled at the end of the year.

What’s happening, basically, is that attrition is turning out to be even larger than expected. And while it’s not entirely clear why, there are certainly some good indicators.

As the administration noted in its press release last week, coverage for a half a million people was terminated in 2015 because of what the administration is describing as “data matching issues”—essentially, their citizenship, immigration, or other personal info didn’t match up with federal records. They couldn’t prove they actually qualified for coverage under the law.

There are also a lot of people who appear to be signing up but never paying for coverage at all. Brian Blasé of the Mercatus Center suggests that this accounts for about half of the decline. Blase also points to a New York Times report from late last year suggesting that many people don’t find their coverage all that valuable once they try to use it.  In addition, as Jed Graham points out in Investor’s Business Daily, the enrollment data released last week suggests that the law is placing burdens on middle and working class Americans, sometimes forcing them to choose between buying coverage that isn’t helpful and paying a penalty to remain uninsured.

These disappointments go a long way toward explaining the persistent negative-tilt to public opinion about the law, and why even its most ardent defender in the presidential race, Hillary Clinton, has consistently said the law needs to be fixed and improved upon, particularly when it comes to personal expenditures.

In the sense that it has improved coverage rates, then, Obamacare may be a success, though a more modest one than many had hoped. But to a lot of people, it clearly doesn’t feel that way.