In one chart: Obamacare exchange has failed to expand coverage in Indiana

March 13, 2014
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The fundamental goal of Obamacare, before anything else, was to reduce the number of the uninsured.

The main way to do that was to require insurers to offer coverage to anyone who applied and then to give tax subsidies to help people buy private insurance via online exchanges.

But unfortunately, it isn’t working. At least not this year.

No matter how I slice the numbers, it looks like the Obamacare exchange in Indiana will fail to expand coverage this year. It isn't even close, really.

You can see that in the chart below. If you want the details on how I arrived at these numbers, skip down to the bottom of this post, under the heading "How I Crunched the Numbers."

But let me first say what I’m not saying.

I’m not saying Obamacare as a whole will not expand coverage in Indiana this year.

The law’s tax on individuals that do not buy health insurance could lead to an increase in coverage, either via increased participation in employer-sponsored health plans or a boost in Medicaid enrollment.

In fact, the Indiana Medicaid program had 35,000 more participants in February 2014 than it did in March 2013.

I’m not saying the Obamacare exchange won’t lead to an increase in coverage in 2015 or 2016. I actually expect it will.

But for 2014, based on the best data I can get my hands on, I must conclude that Obamacare's dreams of expanding individual insurance coverage in Indiana have simply failed. There's no getting around it.

How I Crunched the Numbers

My actual enrollment calculation (the light blue line at the bottom of my chart) relies on the exchange enrollment data reported each month by the U.S. Department of Health and Human Services. For the March data I relied on a projection by Avalere Health LLC, a D.C.-based consulting firm. It used the enrollment experience during the first year of the Medicare Part D program to estimate that 22 percent of the the total enrollment would come in the final month.

So, if the February enrollment reported by HHS, which was 64,972 for Indiana, is 22 percent short of the final number, then the final number will be 84,579.

And that's not even discounting for the roughly 20 percent of exchange enrollees who have been failing to pay their premiums, and therefore forefeit their coverage. If that trend continues through the end of March, actual Indiana enrollment in the Obamacare exchange could total only 68,000.

Perhaps enrollment will surprise everyone here in March, which is the last month of the open enrollment period for exchange coverage. But it would have to surprise by a huge amount to catch up to the other lines in my graph.

The top two lines (the blue line and the red line in my chart) show the expected enrollment for Indiana, which Avalere Health figured based on two nationwide projections put out by the Congressional Budget Office. That first prediction, issued in May 2013, envisioned total exchange enrollment of 7 million. A second prediction, issued earlier this year, envisioned nationwide enrollment of 6 million.

I took those total enrollment projections for Indiana and then calculated per month totals by using these assumptions: 22 percent of enrollment would come in both December and in March. The other 56 percent of total enrollment would come in equal parts in the other four months.

As you can see, both projections far exceed the reality on the ground.

But that's not the half of it. I can't see that the Obamacare exchanges are adding ANY net new enrollees to the individual marketplace so far.

I tried to think what would be break-even number for the Obamacare exchanges to get to. One answer is to calculate how many Hoosiers already had individual health insurance last year and had incomes that would have qualified them for Obamacare's subsidies. It's reasonable to assume that at least that many people would want to sign up for coverage on Obamacare's exchanges.

Of the 178,000 Hoosiers covered by individual health insurance last year, 63 percent of them had incomes that would have qualified for an Obamacare subsidy, according to an analysis of Census data by the Center on Budget and Policy Priorities. So that means 112,000 Hoosiers were already buying individual insurance last year and would get a tax subsidy to do so again in 2014.

But as you can see, these people (represented by the green line in my chart) would number far more than total Obamacare exchange enrollment so far.

Also, there are an estimated 108,000 Hoosiers whose individual health insurance policies were canceled last year because they did not meet the new rules required by Obamacare. So if the Obamacare exchanges simply enrolled all of those people, it would be at the levels shown by the purple line in my chart.

And yet, it is still far short of even that low-level goal.

Is it possible that nearly all the enrollees in the exchange were previously uninsured, and that most of the people with canceled policies are buying coverage in the off-exchange marketplace?

Maybe. But officials at Anthem Blue Cross and Blue Shield have told me the vast majority of their exchange customers had insurance coverage beforehand. Indianapolis-based MDwise tells me its enrollment has been a mix of the uninsured and the previously insured.

So I'm left to conclude that, for whatever reason, the Obamacare exchange has simply proved less attractive this year than the individual insurance that was available in Indiana a year ago.

  • Context Is the Big Story
    Wow! What do the numbers say? Well, they do show that the number of enrollees in the ACA have continued to grow. If Medicaid enrollment is growing, it seems to show that more Hoosiers are becoming poorer. The numbers show that there is a clear need for health insurance but the need has not been met for reasons that are not clear. The numbers indirectly show what happens when a state and its leadership do not get behind a law intended to help people and a law that still needs collaborative leadership to see it improved. The context around these numbers is the big story and it is a sad one for Indiana. Thanks JK for your reporting on this issue; your column along with Maureen Groppe/s reporting from Washington are the only two sources that seem to put a good spotlight on issues associated with the ACA.
  • Insurance tied to job
    I am going to add another wrinkle to the problem. As long as health insurance is tied to one's employment, this problem will never be solved. Before I was laid off, my health insurance costs were fully paid, for excellent coverage, obviously a great deal. Now, having to pay for private coverage costs me well over $800/month for inferior coverage. For a comparable plan under the ACA, my premiums will almost double, unless I can somehow REDUCE my income and qualify for subsidies. During this time, my auto insurance and homeowners insurance have basically remained the same. Let everyone purchase health insurance on a level playing field. Premiums paid as benefits should be treated as taxable income, allow privately paid premiums to be fully deductible, and require insurance companies to offer the same plans, at the same rates to individuals that they offer on group plans.
  • Outside of the exchanges
    From linked IBJ article: "However, some Hoosiers still have the option of renewing their canceled policies for 2014, as long as they do so before Dec. 31. The state already has given insurers the go-ahead to do so, if they wish to offer that option to customers. Those customers could extend the terms of their 2013 policies until nearly the end of 2014. Only at the end of the 2014, then, would customers have to buy new policies that adhere to the new Obamacare rules." ---There is no reason to think that those who "lost coverage" had only the exchanges to go to.
    • To MarkusR
      You make a good point. Some of that 108,000 did renew their policies for most of 2014. Insurers extended such offers to folks with attractive risk profiles, but not everyone. To the extent Hoosiers made that choice, they still found the old individual insurance market more attractive than the Obamacare exchange that was designed to fix it. And the exchange was not attractive to enough other people to offset those who early renewed their policies. In other words, the exchange failed to expand coverage.
    • Why it isn't expanding coverage in Indiana
      I have two children in their late 20s who don't have insurance coverage. Neither has more than 2 doctor visits per year, and those are usually to a nurse practitioner. They looked at insurance under the "Obamacare" umbrella and discovered they did not qualify for any subsidies. Their per month payment would be $235-275. Their deductible per year would likely not be met since it is $3,500, so they would be paying all their own medical expenses as they are now PLUS $235-275 per month (for nothing). One does not even qualify because you have to make nearly $12,000 a year to qualify. The other has a young child who is in the Medicaid system, but for whom there are daycare charges as well as increased food and clothing costs. Neither of my children can afford to pay this money for nothing, so they will continue to go uninsured for another year.
    • Broken system
      A primary reason why we won't see an increase in insured people is just because of what Sally says. This state has put up as many roadblocks as possible to make ACA fail, and then the Governor and those who don't care about fixing our broken health care system will blame Obamacare. My son turns 26 this year and he desperately needs insurance, but he does not qualify for the subsidies, and, though his doctors say he's disabled, it may take years for the State and federal government to agree. If he made $20,000 a year, he would be able to get affordable insurance. But, as he makes nothing, he does not qualify for any subsidies -- because Indiana has refused to adopt Medicaid expansion. It's simply insanity.
    • The premium is too damn high
      Here's why coverage isn't expanding. The premium is too damn high. Other states have much lower premiums for similar coverage. It's almost like a conspiracy...see, nobody's signing up because the ACA is solving a problem that doesn't exist. Thanks, Anthem, for putting politics above people.
    • Exchange Broker
      I am a broker selling the exchange plans. You can't count the 1st year of this experiment. The marketplace was not functional until about Feb. Year two will have bigger enrollments because you can now be denied non emergency medical services if you don't have insurance. Uninsured people will learn this aspect of the law quickly. The 1% tax penalty will also create awareness. The ACA is creating a complete transformation of our health care system.
    • Only half the story, Sally
      Sally, I am also in my late 20s. What happens when your uninsured children, heaven forbid, are in a serious car accident, or are diagnosed with cancer or other serious chronic illness? Health insurance is not meant to make semiannual practitioner visits for your children cheaper, it is also meant to cover them in case of something terrible happening, which could cost tens, if not hundreds of thousands of dollars. Like car insurance, I have not had an accident or a claim, therefore I am losing money, but I still purchase it because it's the law and because one day I might need it to cover my butt.
    • none
      Here's my 4 cents. I am 60 and went back to school to improve my job prospects.I will be a paralegal in 2 months and I'm an ex-nurse. I find myself squarely in the middle of this issue. Prices on health insurance went up because our state did not become part of the Medicaid expansion program. Those states who did enroll the costs went down and they are happy. Due to a layoff in September and that I worked as an independent contractor I can't get unemployment. I now exist on federal student loan money until I graduate and grab the first job that becomes available to me. I found out today that you can apply for a hardship exemption if you do not qualify for medicaid. Believe it or not I don't!! There are several other reasons you can apply for this exemption. There is quite a bit of information about it online and at the website.I have been looking at premium costs and even at my income with subsidies it may be affordable for me. There were policies for $50 per month. I also have health issues involving my vision which stopped me from working for a period of time. My vision his returned partially and I will work until 70. I am a straight A student in school and will graduate as an honors student! Good luck everyone and best regards.
      • One bullet
        Wife in 2010 completed suicide here in Indiana I will not be surprised this new TAX will create even more. Here in Jasper County it is known as thinning the heard by the sheriff

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