Obamacare: Uninsured Americans still staying away so far

Posted: 1:17 p.m. Tuesday, Jan. 21, 2014 - Atlanta Journal Constitution

It's been a while since we checked in on Obamacare. The number of technical glitches is down -- though there are still important shortfalls, such as the website's lack of security -- and now the problems are, as expected, focusing more on the product itself.

The worst news of late comes from the Wall Street Journal, which reports perhaps only one in nine people who have bought health insurance under the law so far didn't have insurance before:

"Only 11% of consumers who bought new coverage under the law were previously uninsured, according to a McKinsey & Co. survey of consumers thought to be eligible for the health-law marketplaces. The result is based on a sampling of 4,563 consumers performed between November and January, of whom 389 had enrolled in new insurance. ...

"Health Markets Inc., an insurance agency that enrolled around 7,500 people in exchange plans, said 65% of its enrollees had prior coverage. Around 10% were dropping out of employer coverage, either because the employer stopped offering its plan or because they could qualify for subsidies on the marketplaces. Fifteen percent had previous individual plans canceled, and 40% decided to switch into coverage bought through an exchange from previous individual plans.

"At Michigan-based Priority Health, only 25% of more than 1,000 enrollees surveyed in plans that comply with the law were previously uninsured, said Joan Budden, chief marketing officer."

So, not only are enrollments still trailing government projections and goals, albeit with two months remaining before the deadline to be covered without having to pay the fine (er, tax) mandated by the law. But among those who have enrolled, the vast majority weren't among the tens of millions of uninsured people whose plight largely drove the 2009-10 push for Obamacare. If the previously uninsured really do make up between 11 percent and 35 percent of those who have enrolled, and 2.2 million Americans have enrolled, we are talking about between 242,000 and 770,000 people moving out of the ranks of the uninsured.

Good for those people, assuming they think the new coverage is actually worthwhile. But that's hardly the kind of success that justifies such a massive (additional) intrusion by the government into the marketplace.

Why aren't people enrolling? "[A]ffordability ... was cited by 52% of those who had shopped for a new plan but not purchased one in McKinsey's most recent sampling, performed in January. Another common problem was technical challenges in buying the plans, which 30% mentioned."

So technical problems are still all-too present. But for almost twice as many people, the Affordable Care Act turned out to be not so affordable.

Health-insurance expert Bob Laszewski, commenting on the Journal's story on his blog, writes he's "not shocked to hear that given ... the high after-tax premiums, net of the subsidies, people are finding, as well as the high deductibles and narrow provider networks the subsidized Silver and lowest cost Bronze exchange plans are offering people."

The good news is that these sign-ups may be enough to stave off a "death spiral" in the insurance industry in which too many of the new enrollees were relatively sick and costly to insurers. The bad news is that, as Laszewski puts it, "so far the insurers are just re-enrolling their old customers at higher rates!"

There is still a chance uninsured Americans will decide at the last minute to get insurance rather than pay the Obamacare tax. But it isn't exactly a ringing endorsement of Obamacare as the solution to their problems that it appears they would be doing so reluctantly and under threat of financial pain, rather than because the law is compelling changes they believe to be beneficial.

Kyle Wingfield is the AJC's conservative columnist. He joined the AJC in 2009 after writing for the Wall Street Journal, based in Brussels, and the Associated Press, based in Atlanta and Montgomery, Ala.