7M ObamaCare enrollment target a tall order despite recent surge

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Experts say the Obama administration faces a tall order in hitting the 7 million enrollees the Congressional Budget Office projected would sign up for ObamaCare in 2014.

After a surge of enrollees in December, 1.1 million people have enrolled in the federal exchange, and another 1 million have enrolled through the 14 state-run marketplaces.

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That falls short, however, of the administration’s stated goal of 3 million enrollees by the end of 2013.

Perhaps even more importantly, the makeup of those enrollees remains unclear.

The idea behind the health exchanges is that young and healthy enrollees will offset costs from the older and sicker enrollees. If most of the ObamaCare recipients are old and sick, it will be tougher for the exchanges to work.

The administration hasn’t released a breakdown of who is enrolling, but preliminary data coming out of the state-run exchanges indicates a large number of high-risk consumers.

“I don’t see how they could have the balanced risk pool that they need,” said Joe Antos of the conservative American Enterprise Institute. “The younger people with lower incomes already have education loans, car loans, and such, and these are people who, even with a generous subsidy, it’s still going to cost them money out of their pockets.”

Antos and John Holahan, a fellow at the nonpartisan Urban Institute, both said the final enrollment number for 2014 is likely be closer to 4 million or 5 million.

Holahan said 7 million was “attainable” but unlikely.

“If they are at 4 million by the end of March, and get another 1 or 2 million through the special enrollment periods by the end of the year, that will be a very good 2014,” he said. “It will help that the website is working well, and the insurers will be advertising, and then 2015 will be better.”

Others say it’s still possible the administration could hit the 7 million target.

“I think the 7 million projection is possible,” said Larry Levitt, a senior vice president for the Kaiser Family Foundation.

He argued that December was the first real month during which the system was functioning and the result was a dramatic rise in enrollment.

In addition, Levitt said healthcare officials and the insurance industry held off on a public relations blitz because of the HealthCare.gov woes.

With the website now functioning better, he said he expects a torrent of ads to be released ahead of April 1, when the law's penalty for not having insurance will kick in.

“March is the real deadline,” he added. “The experience in Massachusetts and in the Medicare prescription drug program suggests a lot of people wait until the last minute. It’s similar to taxes. Most people wait until April to file.”

The administration has also touted the example of the Massachusetts health law, arguing that people didn’t enroll in its exchange until close to the deadline.

Antos warned of a false dawn for the administration if it puts too much weight in the recent jump in enrollment.

He said many young and healthy people will opt to pay the penalty under the individual mandate, at least for the first year.

He said the administration had a chance to pull them in with a successful October rollout, but that it missed its “one bite at the apple” with the critical demographic.

Levitt and Holahan disputed the notion that the law requires young people to be successful, but they admitted it would be a while before it is clear whether healthy people are signing up.

“I don’t think we know,” Levitt said. “It’s hard to say, but when insurers set their premiums in 2014, they seemed confident it would be a balanced mix.”

Holahan said the metric was overblown. He pointed out the measures place to protect insurers from a potential imbalance during the early years of the law.

“The most important thing is that young and healthy find out how inexpensive and reasonable good insurance is in these market places,” he said. “As that becomes better known, their enrollment numbers will go up and the individual mandate penalties will get larger. Some of this just needs time to work itself out.”

One thing all three experts agreed upon was that the media is placing too much importance in the 7 million benchmark.

Holahan downplayed its meaning, saying it wasn’t a “gold standard” touchstone for whether the law is ultimately successful.