ObamaCare 2015 Wrap-Up

The Latest on the Affordable Care Act

ObamaCare 2015 Wrap-Up
March 5, 2015

After a full year of healthcare reform under the Affordable Care Act (“ObamaCare”), the extreme predictions seem to have been overblown. Improvements have been made but not on the grander scale hoped by many advocates, and conservative fears of health care chaos and massive job losses have not come to pass.

Let’s look at a few of the results as we head into a new year.

  • Signups – Approximately 8 million people signed up for health insurance on the exchanges in 2014, with 6.7 million of those following through and receiving an insurance plan during the exchange. That is an 84% retention rate, which is pretty standard for employer-based plans as well.

    An estimated 11.4 million Americans signed up for 2015 coverage through the exchanges by the February 15th open enrollment deadline. With the same 84% retention rate, around 9.5 million employees will be covered under plans purchased through the exchanges.

  • Total Uninsured – One-half of the goal was to provide insurance coverage for all Americans, and one thing missing from the signup numbers is how many of these signups were from the pool of previously uninsured.

    The Kaiser Family Foundation (KFF) found that approximately 3.8 million of those with exchange-based insurance had been uninsured – a bit less than 57% of the signups. At the same rates (84% retention, 57% previously uninsured), ObamaCare would be responsible for reducing the ranks of the previously uninsured by 5.4 million at the end of its second year.

    This would be impressive except for the fact that insurance coverage is not voluntary anymore; it is mandatory. Prior to ObamaCare, KFF estimated that more than 41 million Americans were uninsured. Gallup showed a significant drop in the uninsured rate from 17.3% of adults in 2013 to 13.8% in Q4 2014, most coming from the ACA’s mandatory requirement – but 13.8% represents around 33 million uninsured adults. Between KFF and Gallup data, arguably around 33-36 million Americans are still uninsured.

    With a mandate, why is this number not far lower? Perhaps health insurance is still not affordable enough….

  • Costs – The fight in this law has always been about affordability – affordability for whom, and at whose expense?

    According to ObamaCareFacts.com, 87% of people that purchased plans through the marketplace received financial assistance. Meanwhile, a Forbes/Manhattan Institute study found that the average premium in 2014 increased by 49%. From the viewpoint of consumers, insurance costs are only going down thanks to subsidies.

    Does this translate to health care savings? The White House says so, pointing to the continued decrease in the growth of health care spending. It is less clear how much of that can be attributed to the ACA.

  • Choice – According to HHS, consumer choices have improved thanks to competition. 91% of consumers will have plans available from three or more insurers with an average of forty total plan choices, compared to 74% and thirty plans respectively last year. That does not reflect the quality or affordability of the choices.

  • Taxes – 2015 marks the first year that people will have to consider their insurance coverage as they file taxes for the previous year. Not only do they have to check a box claiming coverage or pay a penalty of 1% of your income (or $95 per person, whichever is higher) for not having coverage, they also must calculate the difference between projected and actual income used to receive tax credits. People may have to pay back a portion of their credit if their income rose during the year.

  • Meanwhile, a special enrollment period had to be established from March 15th to April 30th for people who received incorrect tax information via Healthcare.gov. In fairness, this is the only major glitch that has been reported, and compared to the rocky 2014 rollout, the exchanges have operated relatively smoothly.

The Supreme Court may lob a hand grenade into the works. If the ruling in King v. Burwell says that subsidies cannot be applied to plans through the Federal exchange, people in 34 states will be scrambling for affordable options, and unlikely to find any. Right now, the Court remains the biggest threat to ObamaCare’s success.

Overall 2014 was a mixed bag for Obamacare, and 2015 looks to be more of the same. Let’s see if the year brings constructive tweaking of the law, the impetus to blow everything up and start over, or something completely unexpected – like stability.

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