Thursday, September 18, 2014
Inquirer Daily News

Numbers of uninsured are not being decreased

A Healthcare.gov enrollment study estimates that only 14 percent, or about 500,000, actually gained coverage.
A Healthcare.gov enrollment study estimates that only 14 percent, or about 500,000, actually gained coverage. AP

President Obama, in a speech to Congress in September 2009, stated that the central goal of the Affordable Care Act was extending health-care coverage to the "more than 30 million American citizens who cannot get coverage." Yet here we are nearing the end of open enrollment, and the number of Americans who lack insurance exceeds 30 million.

A back-of-the-envelope estimate helps make the point. Although the math cannot be precise, the underlying logic is difficult to refute.

According to the U.S. Census Bureau, about 48 million individuals in the United States were uninsured at the end of 2012. The actual number was 47.9 million total uninsured individuals; 9.5 million were non-citizens who are ineligible for Obamacare. This results in a net number of 38.4 million uninsured citizens, 35.1 million native-born and 3.3 million naturalized citizens.

How far has Obamacare come in reducing the ranks of the uninsured?

It is estimated that nearly three million individuals have signed up for Medicaid for the first time. Let's assume that all of these individuals gained coverage because of the newly expanded Medicaid program.

McKinsey & Co. conducted a study on enrollment through Healthcare.gov and the state insurance exchanges using data as of Feb. 1. At that time, 3.3 million had enrolled. McKinsey concluded that only 14 percent, or about 500,000 individuals, were "actual uninsured who have actually gained health coverage." An additional 13 percent of uninsured individuals had signed up for Obamacare but had not paid the premium. Of those who had signed up by that time, 73 percent either had insurance and preferred to choose a plan on the exchange or enrolled because their individual plans were canceled.

On Thursday, the Obama administration announced that enrollment had reached six million. Using McKinsey's findings of 14 percent gaining new coverage, only 900,000 previously uninsured individuals will have acquired insurance as a result of the exchanges.

So, there remain nearly 35 million uninsured citizens. No additional enrollment in Obamacare for 2014 was scheduled after March 31, though the administration extended the deadline last week. The penalty for uninsured individuals has been delayed until 2016, reducing the motivation for additional sign-ups. The employer mandate has also been moved until 2016.

Given this analysis we reasonably can conclude:

The first four years of Obamacare have led to solving about 10 percent of the problem of uninsured citizens.

It is unlikely that any material reduction in the number of uninsured citizens will occur during the next three years under the current policies.

We know one other critical fact: The United States currently spends $3,000 more per person per year on health care than any other leading industrialized country, $900 billion more per year. Therefore, we have the ability to solve this problem economically.

I'll conclude, not by attempting to offer a complete solution, but rather to make the suggestion that the best way forward is to create the characteristics for a true competitive health-care marketplace. The following actions would help drive the change required to reduce the long-term cost of health care and produce more affordable insurance for people to buy:

Preserve important principles that have been established through Obamacare. For example, insurance should not be denied for preexisting conditions.

Establish a date certain by which the health-care industry will transform from a fee-for-service payment system to a per member, per month payment. Because we financially incentivize volume, we perform more than twice as many MRI exams and knee-replacement surgeries per person than the average of the next 10 industrialized countries.

Establish a minimum set of benefits for basic insurance for all insurance plans. Obamacare added new insurance requirements, avoiding the difficult choice of what is "essential."

End regulation that impedes competition on cost and quality. The Certificate of Need program in New Jersey is a local example.

Establish complete insurance rate transparency in and among all health-care markets. Public knowledge of the per member, per month payments to providers will moderate rates over time and will reduce the disparity between large and small providers.

Define an approach, federal, state, or some combination, to create a catastrophic pool for insurers and citizens. This will end the concern of individual bankruptcy due to health-care costs.

I recognize that many reading this want us to move to a public option, a Canadian-style system. However, a political consequence of the Obamacare rollout is that a majority of citizens and politicians will be less likely to support even greater public control of 17 percent of our economy. Rather, it is time to expect our leaders to address the difficult but practical solutions that can solve the problem of the uninsured and health-care costs.

 


BY THE NUMBERS

14: percentage of Affordable Care Act enrollees as of Feb. 1 who were previously uninsured

900,000: number of current enrollees who would be previously uninsured assuming the same percentage

10: estimated percentage of U.S. uninsured covered by the ACA so far

 


Howard J. Peterson is a managing partner at TRG Healthcare, a national consulting company, and a regular contributor to The Inquirer's "The Field Clinic" blog.

hpeterson@trghealthcare.com

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