Tracking Changes in Those With Health Insurance

RAND has a study out on changes in people's sources for health insurance.  Once you get the hang of reading it, this is a great table:

click to enlarge

 

This is how to read it -- of the 40.7 million uninsured in September of 2013, 26.2 million remained uninsured, 7.2 million got new employer health insurance (ESI) , 3.6 million joined medicaid, etc.  But then some new uninsured were added back so the new total uninsured is 31.4 million.

One of the first things to notice is the marketplace number of 3.9 million is well below the Administration's claim of 7.1 million.  The Administration's number is not even within the error bar here, so one needs to be skeptical, if he was not already, of Administration sign-up figures.

We also can notice that the individual marketplace seemed to have shrunk from 9.4 million to 7.8 million.  No huge surprise, with all the cancellations that made the news last year.

The really interesting question, of course, is what happened to the uninsured.  We can use this table to look at net changes (millions of people).

2013 Uninsured 40.7
     To Employer -5.1
     To Medicaid -2.6
     To Individual +0.2
     To Exchange -1.4
     To Other -0.3
2014 Uninsured 31.4

To make sure everyone understands the math, 7.2 million left the ranks of the uninsured to get an employer policy, but 2.1 million previously insured by employers became uninsured.  The net is -5.1 million as shown.  All the other numbers are calculated the same way.

I have always had serious questions about the value of the Medicaid signups during this period.   Medicaid is not a limited enrollment product.  You can sign up bleeding on a gurney being rolled into the operating room, and in fact many do -- Hospitals are very good at enrolling people into Medicare as they walk in.  So it was really a misnomer in the first place that someone eligible for Medicaid is "uninsured" -- they are in fact insured, they just have not done the paperwork.  The Medicaid expansion in the PPACA probably helped, but many states that did not expand Medicaid had a lot of signups as well.

The exchange seems to have done little to affect the uninsured.  Net of the reductions in individual insurance presumably driven also by the PPACA, the exchanges reduced the uninsured by 1.2 million.

The really interesting number everyone is  looking at is the huge number of the insured that gained employer coverage.  Three quarters of the non-Medicare related reduction in uninsured (since I don't consider a lot of the Medicare signups a real reduction) were from people going onto employer plans.

Kevin Drum quotes Andrea Mcintyre as saying

If it’s correct, it was probably motivated multiple factors—I hate the word “synergy” on principle, but it comes to mind. The economy has been improving, so some of the previously unemployed have secured jobs with benefits. But CBO built in expectations about economic recovery, so I don’t think it’s quite right to try pinning all (or even most?) of the 8.2 million on that. The individual mandate, while weak in its first year, might be a stronger stick than we expected, nudging people to take their health benefits where they’d previously been opting out. Employers could be helping this move this trend along; the University of Michigan, for example, eliminated “opt out dollars” in 2014 (cash compensation for employees who declined coverage).

Drum add triumphantly

If this finding is confirmed, it's a genuine shocker. Although CBO projected that ESI would stay steady, there's been a lot of chatter about the likelihood of employers dropping coverage thanks to Obamacare. But that sure doesn't seem to have happened. So in addition to the usual sources of coverage—Medicaid, exchanges, sub-26ers—it looks like Obamacare has yet another big success story to tell, one that was almost completely unexpected.

Uh, maybe.  The employer insurance changes could also be an artifact of normal churn and of the odd study period.   The study period is only about half a year.  If there were annual patterns, ie with people losing employer health care early in the year and then gaining it at the end of the year, then only the gains would show up in the study and not the losses.  In fact, there is some reason to believe this is the case, as most corporations have open enrollment periods at the end of the calendar year.

But there is a more interesting issue here.  Folks arguing for Obamacare in the first place sold it by implying that most all the uninsured were uninsured because they could not afford coverage or did not have access.  Now it turns out a large block of the uninsured actually did have access and could afford it, they just chose not to buy it, for whatever reason.  Was this really what it was all about from the very beginning, forcing people to buy a product that they could afford but did not want?

  • Another_Brian

    Although CBO projected that ESI would stay steady, there's been a lot of chatter about the likelihood of employers dropping coverage thanks to Obamacare. But that sure doesn't seem to have happened.

    Did he forget that they delayed the employer mandate until the end of this year? If all the people losing individual plans at the end of 2013 were only 5-10% of the insurance market (as we were repeatedly told) and the majority of those with insurance receive it through their employer, what should we expect to see later this year when the ESI plans start getting dropped because they're "sub-standard" and employers decide it's cheaper to pay a fine than to shop around for an Obama-approved group policy?

    I guess if "success" is "people opt-in to employer sponsored group policies when threatened with a fine for foregoing insurance" then yes, this is a temporary success story. Their employer's group policy was likely cheaper at the moment than fines or marketplace coverage. But that logic works both ways: when the employer's fine is cheaper than managing the group policy, how many of those same people will find themselves back among the uninsured?

  • Mole1

    "Was this really what it was all about from the very beginning, forcing
    people to buy a product that they could afford but did not want?"

    Yes, they explicitly said that.

  • mlhouse

    Well, that is why there should be an individual mandate. The free rider problem in health care is significant. The individual mandate was originally a conservative idea to address this issue. The problem with ObamaCare is that the liberal social tinkerers and think they are better than everyone else put an individual mandate on idiotic comprehensive insurance plans because they know what people need better than they themselves.

    But, the way to fix this problem (if it is not too late) is to eliminate the ACA regulations and require people to sign up for a minimum health insurance. Improvements in the marketplace, such as allowing a national health insurance market, would probably make these products even more competitive.

    If you needed to subsidize insurance premiums then it could have been done much more cheaply in the existing individual markets than in the markets the liberal government created. In fact, I believe that these subsidies are a wonderful opportunity for private charitable donations and the government should just create a checkbox on your 1040 that allows a contribution (added to your tax) to go directly to such charitable organizations (I call this the let the liberals put their money where their mouth is checkbox, my guess very few people if any voluntarily increase their taxes to pay for such donations).

  • Sol

    I wonder how many 20-somethings became eligible for their parents' employer insurance? (Though I'm not sure when that went into effect...)

  • c_andrew

    The requirement that health insurance companies cover children to age 26 went into effect with the nationalizing of the student loans. But as I understand it, that coverage is now part of what is evaluated in terms of family income as it concerns educational grants, thus raising the apparent wealth of the family. This means that some middle class students that might have been eligible for grants are no longer eligible as a direct result of the 26 year age mandate on parental health insurance.

  • John O.

    Wow, I'd hate to be an administrator at any university when angry parents blow up in the financial aid department. The new rules just come off as cold and mean spirited.

  • John O.

    "Success is measured prematurely so we can blame and demonize our enemies later for the eventual failure." says every political play book being used by the administration and its allies.

  • herdgadfly

    The Obamacare version of Three Card Monte only has one winner. Obamacare individual marketplace signups became the heart ace to be followed, the malfunctioning federal website was the devious card shuffle and the black clubs, in the form of non-marketplace plans, were skillfully manipulated and redirected to cause GOP opponents to incorrectly pick a declining number of Obamacare insured as the heart ace location - which results in monetary losses, represented by votes in the 2014 midterm elections.

    Personally, I can understand some of the changes. Reductions in military personnel will cause the Other category to drop and Medicare is easy to understand with the expanded coverage in some states and the no cost feature. But Rand has not explained what would increase Employer Plans dramatically since the union plans got no help and the threat of the Employer mandate had to have driven many smaller companies out to the insurance business altogether before the royal reprieve. The only positive trend was a small reduction in unemployment which would have turned a mere 2.5 million (actually something less than that number because of no-plan employers) back to eligibility

  • herdgadfly

    Obamacare subsidies guarantees at least 50% "freeriders" in the real sense of paying little or nothing for coverage. This massive redistribution of wealth scheme will bring us all down unless it is put to sleep.

  • rst1317

    That doesn't seem like a lot of change for all that "reform" that's gone on.

  • rst1317

    "The free rider problem in health care is significant."

    Unfortunately this is something often repeated but it does not have a robust body of evidence to back it.

  • Maddie Miller

    everyone needs healthcare insurance, just to make sure that you are safe incase you get poorly you will always have something in place to cover you.