To Build a Future
On September 9, 2009, President Barack Obama stood before a joint session of Congress and delivered a forceful argument for the need to reform health care. Laying out the core tenets of the plan that would become the Affordable Care Act, the president framed reform as a moral obligation fundamental to building a more stable future for the millions of Americans who were uninsured and for the country as a whole.
Four and a half years later the foundations of that future have been laid. Last week, the US Department of Health and Human Services (HHS) released a report detailing the results of the first period of open enrollment for health insurance through the newly created Marketplaces. These numbers answer key questions about the composition of the new Marketplace enrollees and, therefore, provide an opportunity to better understand the future we are building.
Before we dive in, it is important to remember that these statistics alone cannot tell the whole story. As Brett Norman, Jennifer Haberkorn, and Kyle Cheney explain, the fifty-one individual Marketplaces (one for each state plus DC) each need the right number and mix of enrollees to sustain it, and have so far experienced a wide range of outcomes. The ACA also made changes to insurance outside the Marketplaces, including the expansion of Medicaid, the employer mandate, and new quality requirements for all health plans, none of which are captured in these enrollment figures.
What these national Marketplace statistics do offer is an essential thousand-foot view of the expansion of the individual insurance market under the ACA. The new report goes beyond the total enrollment figure (over eight million people, as was announced nearly a month ago) to include information on how many enrollees were previously uninsured as well as demographic breakdowns by age and race. Those numbers had previously been the subject of heavy speculation as market analysts and politicos alike searched for signals of the new law’s success or failure.
Perhaps the most closely watched demographic group has been the much-maligned cohort of “young invincibles.” In addition to having the lowest rates of coverage of any age group, young adults are also considered essential to maintaining the fiscal stability of the new Marketplaces. The new report shows that about 28 percent of enrollees, or 2.2 million people, are between eighteen and thirty-four years old. That proportion is smaller than the 40 percent of uninsured who fall in that age range, meaning young people will continue to have insurance at a lower rate than older adults. Importantly, however, 28 percent is thought to be sufficient to keep Marketplace premiums fairly stable in future years, preventing the drastic rise in premium rates that many feared if too few young, healthy individuals signed up for coverage.
Another important question has been how well the Marketplaces would be able increase coverage among racial minorities. As I discussed in my last column, people of color make up a disproportionately high percentage of Americans who lack insurance, a disparity many hoped the ACA would improve.
However, the information on racial breakouts of enrollees provided by the new enrollment report is less than ideal. The report only gives information on race for the thirty-four states where the federal government was running the Marketplace (known as “Federally Facilitated Marketplaces” or FFMs), and among those enrollees, nearly a third either did not indicate a race or selected “other,” creating a very large degree of uncertainty. Of those who did indicate a race, 10.7 percent were Latino, 16.7 percent were African American, and 7.9 percent were Asian.
So, while African Americans and Asians both make up a slightly larger proportion of federal Marketplace enrollees than of the population eligible for Marketplace coverage, Hispanics and Latinos are comparatively underrepresented among enrollees – as far as we can tell. There is reason to believe that Hispanics and Latinos may make up a significant portion of those enrollees whose race is unknown or “other,” as is known to occur in the US Census. All told, however, it does not appear that the first year of open enrollment has succeeded in reducing racial disparities in health coverage.
Of all the demographic measures provided in this report, perhaps the most anticipated was information on how many enrollees were previously uninsured. Given that a key aim of the ACA was to extend coverage to those who did not have any, the question of whether most Marketplace enrollees already had other insurance has been central to the debate over the effectiveness of the ACA.
Unfortunately, the data on enrollees’ previous coverage status are incomplete. People only had to indicate whether they had current coverage in order to find out if they qualified for financial assistance, meaning that coverage status for the 270,000 enrollees who did not complete an eligibility determination is unknown. Additionally, the data are once again only provided for the FFM states, which include about 5.45 million of the eight million enrollees. However, of the 95 percent of enrollees in a federal Marketplace who did give information on their insurance at the time of application, only 13 percent, or just over 695,000 people, indicated that they already had a plan.
Suppose we took a conservative stance and assumed that all 270,000 who did not go through the eligibility determination already had coverage through some other source. That would leave 4.5 million individuals, 82 percent of federal Marketplace enrollees, who were uninsured at the time they enrolled in a Marketplace plan. So while the exact number of newly insured is unclear from this report alone (and studies like those from Gallup and McKinsey provide alternative approaches to estimating that figure), we can safely say that millions of people have gained new coverage through the Marketplaces.
As all these numbers have come out, strident partisans on the right and left have trumpeted the bits and pieces they interpret as signs of success or failure: not enough young adults, more newly insured than expected, a lack of improvement in racial disparities. In the face of the upcoming congressional elections, every number is somebody’s political weapon, be it Republicans advancing new angles of attack or Democrats battling to defend their success.
Yet as we discuss this inaugural year of enrollment, we should remember why the ACA was enacted in the first place. The point of all this reform, of the thousands of pages of new regulations and billions of dollars invested in implementation, was not just political. The point was to address the critical failings of the American health insurance market, failings that cost money and lives by leaving millions of people without health coverage.
As the president told Congress in 2009, “We did not come here just to clean up crises. We came here to build a future.” That “we” included every member of Congress, Democrat and Republican, as well every one of the countless individuals involved in arguing over, writing, and implementing the law. That future, in turn, has begun to take shape. Those who seek to understand it should not accept any one statistic as an indicator of ultimate success or failure, but rather consider each number as just one brick in the new foundation of American health insurance.