Obamacare Is Failing to Insure the Previously Uninsured

The next time that someone like Paul Krugman tells you that all of the problems with Obamacare have been fixed, be sure to refer that someone to this by the indispensable Avik Roy:

Last week, I wrote about an article in the Los Angeles Times, on a then-as-yet unpublished report from the RAND Corporation. The report indicated that only one-third of Obamacare’s purported 7.1 million exchange sign-ups were from the previously uninsured. But Noam Levey, the author of the Times article, didn’t disclose RAND’s actual findings as to the actual number of previously uninsured exchange enrollees. Well, now we know why. RAND published the full report yesterday; it indicates that Obamacare’s exchanges only enrolled 1.4 million previously uninsured individuals.

That 1.4 million is out of a total of 3.9 million exchange enrollees overall. That is to say, a little over a third of enrollees—36 percent—were previously uninsured. RAND’s figures don’t take into account the last few weeks of the Obamacare open enrollment period, and they contain a substantial margin of error, due to the study’s small sample size. (RAND surveyed 2,425 individuals aged 18 to 64; the 1.4 million figure has a margin of error of 700,000, meaning that there is a 95 percent probability that the actual number is between 700,000 and 2.1 million previously uninsured enrollees.)

If you assume that 80 percent of signer-uppers will eventually pay their premiums, the true number of previously uninsured exchange enrollees is likely closer to 2 million. That’s far from what the Congressional Budget Office has projected; the CBO estimated that 80 to 90 percent of the first-year enrollees would come from the previously uninsured population. Instead, it appears to be more like 24 to 36 percent.

Roy makes allowances for the possibility that the RAND study is not accurate–he mentions, for example, that it does not survey a sample size as large as the one surveyed by the U.S. Census Bureau. But while we might wish that the sample size were larger, there are still some disconcerting findings in the RAND study that are just not being addressed by those who claim that everything is now peachy with Obamacare:

RAND finds that, overall, 9.3 million more U.S. residents have health insurance in 2014 relative to 2013. That figure has a margin of error of 3.5 million. But that’s not the interesting part. The interesting part is that 8.2 million of that comes from growth in employer-sponsored insurance. Labor force participation has been steadily declining, especially among younger individuals, which would seemingly make this result unlikely. Other surveys from ADP and Aon Hewitt have found that employer-sponsored coverage among the young has been flat to down.

[. . .]

Notably, RAND finds that outside of employer-sponsored insurance, Obamacare’s impact on the uninsured has been minimal thus far—a net of 1.1 million between Medicaid (+5.9 million), the exchanges (+3.9 million), off-exchange individually-purchased insurance (-1.6 million), and other forms of insurance, such as coverage for federal employees and the military (-7.1 million).

So, there are justifiable concerns that notwithstanding the triumphalism of the Obamaphiles, Obamacare has simply not been able to do what it was supposed to do–insure the previously uninsured in significant and meaningful numbers. And given this finding, I ask that we all be spared any further talk that Obamacare is humming along like a well-oiled machine. It isn’t, we should stop pretending it is, and pundits and politicians who continue to pretend that it is ought to be called on their claims.