By Lambert Strether of Corrente.
The Department of Health and Human Services published an “Issue Brief,” HEALTH INSURANCE MARKETPLACE: NOVEMBER ENROLLMENT REPORT. (Sorry for the ALL CAPS, but that seems to be HHS house style.) This was my call on Monday, 2013-11-11:
It’s actually OK that the numbers are low in absolute terms; the MA enrollment for RomneyCare was initially low, and built to the final deadline. There are two metrics that matter: First, the order of magnitude of the enrollees compared to projections. 494,620 vs 49,462 is just barely passing; 494,620 vs. 4,946 would be very bad or, in Washington parlance, a “concern”; and even I don’t think there will be 494 enrollees. Second, the actuarial soundness of the pool; if the entire pool has a pre-existing condition, the insurance companies can’t profit. Unfortunately, the website debacle selects for the already ill, since only they have the incentive to sit through the days and the hours it takes to sign up. So I would expect the administration PR effort to: (1) roll out the heart-tugging YouTubes; (2) conceal the actuarial soundness, to avoid any hint that ObamaCare is already entering a death spiral; and (3) Focus on Medicaid signups, which are, after all, a success. And (4) claim next month will be better…..
But before we break that down, let’s take a minute to see how the White House gamed the numbers. Basically, the headlines with numbers (not just “low”) fall into two categories: ~106,000 and ~27,000. Why is that?
First, understand that HHS, as WaPo warned they would Monday, gamed the semantics of “enrolled.” Basically, what they did would be like Amazon saying that credit card transactions + the value of everything in people’s shopping carts = total sales. Ridiculous, right? I’ve got books in my shopping cart I won’t buy except in my own sweet time, and might never. How would those books be a sale? Same deal here. Here, buried in Appendix A of HHS’s enrollment report, note 8 for the column titled “Number of Individuals Who Have Selected a Marketplace Plan (8)” (total: 106,185) is the definition HHS is using for enrollment:
(8) “Individuals Who Have Selected a Marketplace plan” represents the total number of “Individuals Determined Eligible to Enroll in a Plan Through the Marketplace” who have selected a plan (with or without the first premium payment having been received directly by the Marketplace or the issuer) during the reference period. This is also known as pre-effectuated enrollment
“Pre-effectuated enrollment.” Savor that. So the that accounts for the optimistic, ~106,000 figure. What about the 27,000 figure? That represents the 26,794 who “enrolled” (pre-effectually) through the Federal Exchanges alone (Appendix B); a fraction of the 106,185 total.
So what in the name of sweet suffering Jeebus does HHS mean by “pre-effectual enrollment”? Up to the top (page 2):
Overview of Enrollment to Date
To date, 106,185 persons have enrolled and selected a Marketplace plan — this includes those who have paid a premium and those who have not yet paid a premium.
So, just like I said: HHS is combining sales numbers (“paid a premium”) with prospective (“pre-effectual”) sales numbers (“not yet paid a premium”). I can’t be sure whether that’s according to generally accepted accounting principles, but somehow, I don’t think so. Doesn’t think come under the heading of “Don’t count your chickens before they are hatched”? After all, there are plenty of reasons why people might not take that last step and actually fork over the cash, including (fully justified) doubts about the plan selected. Or there might be no cash to fork over, after subsidy. Or they might be eligible for Medicaid. So it would be really nice to know how many people are actually paying, because the actuarial coin has two sides: Paying out (as little as possible) and raking in (as much as possible). If that breakdown exists in the report, I can’t find it. (Readers?) The closest I can come is this rather Delphic statement:
Enrollment of individuals anticipating paying a premium for coverage is expected to increase as the start date for benefits, January 1, 2014, approaches.
So how’d I do on my call? Here it is again:
So I would expect the administration PR effort to:
(1) roll out the heart-tugging YouTubes. I don’t visit Kos a lot, so I’ll just quote from Snow Crash:
“There’s no big hurry on this delivery,” he says. “Would you like to stay and have a drink? We’ve got Kool-Aid.”
“I’d love to,” Y.T. says, “but my diabetes is acting up real bad.”
“Well, then you can just stay and be a guest of our community. We have a lot of wonderful things to tell you about. Things that could really change your life.”
“Do you have anything in writing? Something I could take with me?”
(2) conceal the actuarial soundness, to avoid any hint that ObamaCare is already entering a death spiral. We’ve already seen the two sides of the actuarial coin, and how HHS gamed the premium side. So did they game payouts, the other side of the coin? They did indeed. We have many anecdotal reports that those with pre-existing conditions are over-represented in ObamaCare’s pool at present, because only they have the drive to fight through the horrible website. But there’s nothing in the HHS’s report that would give us a hint as to the composition of their pool. The words “pre-existing condition” do not appear. There are no proxies for health, as zip code or age. The word “smoking” does not appear. So I called this one.
and (3) Focus on Medicaid signups, which are, after all, a success. From the report, far forward on page 4:
Many of the SBMs [State-Based Marketplaces] have experienced first-month enrollment-related activity [What does that mean?] with substantial numbers of Medicaid eligible individuals applying to the Marketplace. Enrollment of individuals anticipating paying a premium for coverage is expected to increase as the start date for benefits, January 1, 2014, approaches.
And (4) claim next month will be better. From the report, again page 4:
[T]he Department expects Marketplace enrollment will start slowly, with peaks in December (as the January 1 coverage date approaches) and March (as the close of open enrollment approaches). Based on available data for the first reporting period, the level of early Marketplace enrollment appears to be consistent with expectations based on the Massachusetts Commonwealth Care experience. Many of the SBMs have experienced first-month enrollment-related activity [Again, WTF?] that exceeds comparable Commonwealth Care enrollment for the first month of open enrollment (See Appendix C for more information).
In a perfect world, I’d show whether (1) through (4) are propagating in the real world, but it’s late. I would guess badly. For example, on (3), Medicaid, Jon Walker tweets:
Medicaid expansion going well.
— Jon Walker (@JonWalkerDC) November 13, 2013
However, that has the great merit of being true. Walker also tweets:
Given that the public option magic zombie sparkle pony represents the quintessence of flaccid career “progressivism,” losing a public option defender like Walker is a complete #FAIL. The White House is in very bad trouble on this.