ObamaCare Enrollment Hits the Skids?

In 2013, with input from the White House and Health & Human Services, the Congressional Budget Office (CBO) prepared a budget for ObamaCare based on 6 million signups in 2014, followed by 13 million for this year.  For 2016, the projection was 22 million.

Here's the reality:

8 million originally signed up during open enrollment in 2014.  By the Fall, we learned that only 6.7 million became actual paying customers; leaving 16% who threw the bill in the proverbial circular file.  Earlier this year, we were told that 12 million had enrolled for this year's period.  However, HHS is now saying that only 9.1 million of those have committed to their enrollment by paying their bills by the end of the year.  Thus, the percentage of non-payers has risen to 23%.  This also equates to a 30% miss from the original budget projection of 13 million enrollees in 2015.

But, here's the real kicker:

Apparently, with input from HHS, the CBO recently lowered the projected enrollments for 2016, from the original 22 million to just 20 million.   Now, in October, HHS is saying that only 10 million will be signed up and paying by the end of 2016.  So what gives?  Why such a drastic change in only a matter of weeks?

Well, I think what we're seeing is more politics from the always political Obama Administration.  By low-balling the projected signups, anything that comes in above that number looks like a success.  This way, the President can declare a victory by coming in above the projected numbers.  Thus, taking away the potential that a disappointing enrollment number could hurt Democratic candidates in the 2016 election cycle.

For this reason, I think enrollment will be closer to 15 million; and Obama can crow about the success of the 2016 numbers.  But, I also think that the percent who fail to pay will also rise to possibly 30% from this year's 23%, just as it had risen to 23% this year from 2014's 16%.  I also think that because insurance takes effect on January 1 of each year; and because insurers must provide proof of insurance as of that date, and regardless of being paid, people are using that proof of insurance card as their documentation to avoid paying an IRS penalty; should there be an audit where the coverage comes into question.

Understand that this is a flaw in the system -- intentional or through sheer stupidity -- because the Affordable Care Act (aka ObamaCare) allows a 90-day grace period before insurance can be cancelled for non-payment of a premium. Right now, the IRS only relies on the honor system to avoid the penalty.  You simply check a box that says you had a full year's insurance in the previous tax year and no penalty is applied.  Thus, having that insurance card is an ace in the hole; even if the IRS requires it as proof of insurance at the time of filing a tax return.  This is the same way people avoid getting fined for not having automobile insurance.  Those wishing to avoid buying insurance for a full year, pay one payment; get the insurance card; cancel the insurance; and hang onto the card should they get stopped by the police.

References:

CBO 2014 Budget:  Enrollment Projections: Page 5: https://www.cbo.gov/sites/default/files/cbofiles/attachments/45010-breakout-AppendixB.pdf

White House projects marginal ACA enrollment growth in 2016: https://www.washingtonpost.com/national/health-science/white-house-projects-almost-flat-aca-enrollment-growth-in-2016/2015/10/15/8787f4ca-72c3-11e5-8d93-0af317ed58c9_story.html

Individual Mandate Penalties: https://www.healthcare.gov/fees-exemptions/fee-for-not-being-covered/

12 million people have enrolled in Obamacare:  https://www.washingtonpost.com/news/the-fix/wp/2015/05/20/12-million-have-enrolled-on-an-obamacare-exchange-which-is-bad-for-the-repeal-effort/

Affordable Care Act "grace period": http://www.ama-assn.org/ama/pub/advocacy/topics/affordable-care-act/aca-grace-period.page

Oops! White House fudges Obamacare enrollment figures:  http://money.cnn.com/2014/11/20/news/economy/obamacare-enrollment-fudged/

In its annual report on income, poverty and health insurance coverage, the Census Bureau said that the percentage of people without insurance was 10.4 percent last year: http://www.nytimes.com/2015/09/17/us/politics/census-bureau-poverty-rate-uninsured.html