Minor details often cloud the bigger picture. Such is the case for some recent Obamacare news.
The Center for Medicare and Medicaid Services states that 11.1 million Americans are still paying Obamacare customers. These new enrollment figures are down by 1.6 million in 2016.
It would be easy to chalk this up as another Obamacare failure. However, in looking at the enrollment numbers in Year 3, the new data shows significant gains in effectuated enrollment. More Americans are taking the next step in the enrollment process–they are paying their first premium!
Why Obamacare Enrollment Numbers Are Down in the Short Term
Health insurance coverage is a privilege.
A person signs up for health insurance coverage with the understanding that he must pay to keep the coverage valid. In exchange, the health insurance company keeps their word to help afford unforeseen costs in the future.
In this transaction, it is imperative that the person signing up for coverage pay the very first premium. This is what it takes to activate–or effectuate–coverage. Over 1 million Americans failed to pay their first Obamacare premium.
While this may seem like a blow to the already shaky reputation of the law, it is more of a matter of personal responsibility. Everyone has to keep up their end of the deal for a deal to work.
The good news is that more Americans are making more of an effort to keep their Obamacare health coverage.
Paying Obamacare Customers by the Numbers
The health exchanges were popular among Americans in 2015 as 11.7 million Americans signed up for health coverage. Shortly after the end of the buying season, records showed that only 10.2 million paid their first premiums.
Obamacare customers must be getting the message that one must pay a premium to keep health coverage. The number of paying customers buying Obamacare grew by 900,000 from 2015 to 2016 counting the health insurance cancellations.
“The carriers tell me they have a lapse rate of about 2 percent per month…”
It is hard to say how much a 2 percent attrition rate will further whittle down the Obamacare activation number at the end of this year. The number of paying Marketplace customers at the end of 2015 was 8.8 million Americans–slightly lower than the CBO’s earlier prediction of 9.1 million enrollments.
If attrition continues at Laszewski’s rate, and if the enrollments tally beats 8.8 million effectuated enrollments, then the Marketplace is better off than it was in 2015. By the numbers, more and more people are coming out to buy health insurance. American citizens are learning that health insurance is a privilege.
Paying Obamacare Customers in Tennessee & Other States
Over 230K Tennesseans paid their first premium in 2016!
This current retention rate is quite a jump from the number of first premium payers last year. Close to 183K Tennesseans made their first Obamacare premium payment by March 31, 2015.
This figure was greatly overshadowed by amount of Georgia residents who effectuated Obamacare coverage . Georgia residents accounted for 478K of the total activation data–that’s more than Tennessee’s and Alabama’s numbers combined.
The competition gets steeper by moving down the map…
Over 1 million Florida residents paid their first premiums–that’s more than double the amount of Gerogians who effectuated their coverage. Florida joins two other states with over 1 million in residents who paid their first premiums–Texas and California.
Why This All Matters…
All this matters because it is one more instance in which the country’s healthcare law is helping more people protect their health. More people are paying their premiums to cement their coverage.
Opponents of the Affordable Care Act are quick to point out the law’s weaknesses. Double digit rate hikes are common, deductibles are sky high, and many health insurers pull out of exchanges due to unsustainable losses.
The fact that 1.6 million people lapsed health coverage is not a failure of the law. It is a failure on the part of personal responsibility. Pay your first premium!
Philip Strang is a health insurance agent with American Exchange. When he is not enrolling families into health plans, he likes to write about the Affordable Care Act, or Obamacare.