13 Aug 2014 Health Care Odds & Ends: Leaving The ObamaCare Exchanges

1. Down 44%? My former colleague at Investor’s Business Daily, Jed Graham, reports that new evidence on exchange enrollment “could require quite a come-down from those lofty claims” of 8 million enrollees in the ObamaCare exchanges.

Aetna, the nation’s third-largest health insurer, “had 720,000 people sign up for exchange coverage as of May 20, a spokesman confirmed to IBD. At the end of June, it had fewer than 600,000 paying customers. Aetna expects that to fall to ‘just over 500,000’ by the end of the year.”

That would be a drop of 44 percent.  At that rate the ObamaCare exchanges would drop from 8 million down to 4.6 million enrollees.

Yet not every insurer expects to see such a dramatic drop. “Cigna said that it expects its individual market customers, including more than 100,000 in the exchanges, to ‘move from 300,000 down to 280,000 in that range,” Graham reports.  That’s a drop of 6.7 percent.

But attrition is not the only reason for decline in exchange enrollment…

2. Can They Prove Their Citizenship Status?  Will They Have To?  The Daily Caller reports that the Centers for Medicare and Medicaid Services “sent letters notifying 310,000 customers who have failed to fix errors in their citizenship or immigration data that their coverage will be terminated Sept. 30 if they don’t submit proof by Sept. 5.”

So, let’s say that half of those, 155,000, are unable to prove citizenship, reducing exchange enrollment from 8 million to 7,845,000.  Then, let’s assume that attrition is at about the halfway point between 44 percent and 6.7 percent, which is about 25 percent.  That would drop enrollment down to about 5.9 million, quite a ways from 8 million.

As for the death spiral, we can’t know what effect this will have since we have no data on the age or health status of those who are leaving the exchange.  However, those who are dropping coverage because they have stopped paying their premium are probably disproportionately young, which is not a good sign for avoid a death spiral. But that’s a rough guess and at this point we can’t know with any confidence.

Final point:  I have my doubts that those 310,000 will have to prove citizenship.  What would prevent President Obama from issuing an executive order giving them a waiver?  The law, of course, but as we have seen that means little to this president.  So don’t be too surprised if, at the end of August, President Obama “finds a way” to let those people stay on the ObamaCare exchanges.