Most People Enrolling In Obamacare Were Already Insured

The Wall Street Journal story (“Exchanges See Little Progress on Uninsured”) is behind a pay wall, but thankfully, Megan McArdle blogged about it.

Somewhere between 65 percent to 90 percent of the 2.2 million folks who bought insurance on the exchanges through late December seem to be people who already had insurance. Some came to the exchanges when their policies got canceled; others came, voluntarily or not, from the employer market. But various sources suggest that the number of previously uninsured people who have so far bought policies on the exchanges is somewhere south of 750,000.

To put that number in perspective, the Congressional Budget Office projected that the exchanges would sign up 7 million people in the first year, roughly 2 million of them transitioning from other insurance plans and 5 million of them previously uninsured. If the Journal’s numbers are right, then by the end of December, the exchanges had signed up at least 1.45 million previously insured folks out of the 2 million who were projected to enroll by the end of May — roughly 75 percent of the projected total. But at most, they’ve signed up 15 percent of the uninsured that they were expecting to enroll. You’d expect the early numbers to be somewhat weighted toward the previously insured, who probably want to maintain continuous coverage. Still, this is a fairly wild skew, and it leaves us with a burning question: Where are the uninsured? Did hardly any of them want coverage beginning Jan. 1?

McArdle runs through some other way the previously uninsured might be purchasing insurance and doesn’t find any real alternative that might mean they are entering the ranks of the insured. So if the Wall Street Journal’s numbers are accurate, then there are only two possibilities. One option is that the uninsured are so used to being uninsured that it simply doesn’t matter to many of them, yet, that we “just created a giant new entitlement to take care of these people.” Perhaps they will change their minds by the March deadline.

The other possibility is that we have simply been wrong about how many tens of millions are supposedly without health insurance. That would mean the mantra about how so many needed health insurance was just wrong.

But either way, this means that relatively few people are going from being uninsured to getting insurance. Rather, their going from insurance before Obamacare to insurance through Obamacare. This will have an effect on whether people are thrilled or less than thrilled with the Affordable Care Act. Obamacare was expecting an army of grateful people who were able to get insurance for the first time. What happens if it gets, instead, an army of people paying too much for too little?