Last week, the government announced their 2016 estimate for enrollment through the healthcare.gov website and various state exchanges. The expected enrollment of 10 million is marginally greater than the 9.9 million enrolled as of June 2015, and 50% less than the 20 million that was projected three years ago by the Congressional Budget Office. Currently, there are an estimated 10.5 million Americans who are eligible to get coverage through an exchange, yet are not covered – even though the healthcare.gov technical glitches and confusion have been largely fixed and the employer mandate carries the heftiest penalty to date for people who forgo coverage.
The government is learning what the insurance community learned a long time ago: the individual market is a difficult place no matter the backdrop of penalties or incentives.
There is now a realization that a large group of people in the country refuse to budge from their position of not buying coverage. Some Americans just do not want to be told by the government what they have to do, especially when it comes to healthcare. Even for those Americans whose coverage will be heavily subsidized, the remaining portion still eats into an already tight budget and with high deductibles and cost sharing, potential purchasers just don’t see the value. Additionally, with the economy gaining stronger footing, some people who were originally assumed to be enrolling through an exchange, are enrolling in employer-sponsored plans.
The longer-term issue is the stability of the exchanges with an enrollment that is significantly lower than assumed. If enrollment is weighted by those citizens that have higher medical costs, then the per enrollee costs will have to go up significantly – and this will unfortunately be borne by the taxpayer.