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Affordable Care Act - How Many People Are Really Insured?

News pundits and government watchdogs are looking at the 7.5 million people that have signed up on HealthCare.gov and 14 state exchanges. But what about the “off-exchange” numbers?
Saturday, 19 April 2014

medical supplement plansAccording to a recent article on NPR.org, "The 7.5 Million Insured Through Obamacare Are Only Part Of The Story," the answer to this question can be quite complicated. The fact that something about the Affordable Care Act is complex comes as no surprise to the many thousands of people who had trouble signing up on the ill-fated web site, Healthcare.gov. But this time the complications are not coming from the administration; rather, the confusion lies in "how" the number of insured Americans is calculated and reported by the media.

Since the site was launched last year, the Obama administration has been tracking the number of plans purchased on HealthCare.gov and on the state health insurance exchanges. Their most recent report says they have exceeded expectations in the number of sign-ups. President Obama was happy to trumpet the 7.1 million signups under the Affordable Care Act, but these are not the only numbers to get excited about. There are some statistics that are often overlooked when calculating the net impact of Obamacare. Federal officials say another 3 million people have signed up for Medicaid and enrollment in private health insurance plans outside of the marketplaces is booming.

The federal government hasn't been counting the number of people who buy new plans directly from insurance carriers — and that number could be substantial. According to recent statistics, Arizona health insurance brokers have been asking their clients if they would qualify for a federal subsidy toward healthcare because if they did it would make better financial sense to sign them up on Healthcare.gov. However, if they made too much money to qualify, most brokers would steer them away from the exchanges.

Why buy private insurance in the age of Obamacare?

One of the main reasons people prefer to remain outside of the government-run healthcare program is because they want a better plan. It never hurts to avoid that level of bureaucracy too, but the main reason is they want a more customized plan and that can only be found outside of the marketplace.

One of the brokers interviewed for the NPR article claimed that about 15 percent of his clients were signing up for insurance plans outside of the healthcare marketplace. For these clients, enrolling directly with the insurer was just easier because there was no need to provide personal or financial information to Healthcare.gov. Instead, private insurers just gather demographic information, and once they decide on a plan they simply start paying for it. It is much simpler to do this than it is to purchase insurance through Obamacare.

Why is this calculation so important?

Mainly, these customers are not being tallied as "insured" by the Obama administration. All the news pundits and government watchdogs are looking for is the 7.5 million people that signed up on HealthCare.gov and 14 state exchanges. But the "off-exchange" number is just as important when we evaluate how well the law is working.

Interestingly, many brokers believe that more people are getting insured right now in the individual market outside of the exchange than on the exchange. In fact, a new RAND corporation survey indicates that 7.8 million people across the country purchased health insurance between September 2013 and mid-March 2014.

The success of the Affordable Care Act depends on distributing risk across a larger and more diverse group of insured individuals. While most of the calculations are based on the number of new signups within HealthCare.gov, the success of Obamacare isn't riding on those numbers; it is more dependent upon the total number of people who are insured.

Photo Courtesy of stockphotos / FreeDigitalPhotos.net

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