How to Tell When Someone’s Misleading You About Obamacare

Everyone has an enrollment statistic they want to avoid, but it’s all part of the same puzzle.

National Journal
Sam Baker
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Sam Baker
April 3, 2014, 10:32 a.m.

The hot­test trend in Obama­care ana­lys­is is to wave off in­con­veni­ent stat­ist­ics, claim­ing this or that met­ric “doesn’t mat­ter” if you really want to un­der­stand what’s go­ing on.

Don’t listen to any­one who tells you this.

Every met­ric out there right now mat­ters — just not in isol­a­tion.

The total num­ber of sign-ups — 7.1 mil­lion — is a real and im­port­ant num­ber, des­pite crit­ics’ best ef­forts to ra­tion­al­ize it away. But the factors the White House would rather ig­nore — like the num­ber of people who haven’t paid their premi­ums — are also real and im­port­ant num­bers.

The Af­ford­able Care Act is com­plic­ated, and try­ing to get an hon­est handle on the state of en­roll­ment re­quires wad­ing through an ocean of com­pet­ing stat­ist­ics. Un­for­tu­nately, that makes it easy for par­tis­ans to cherry-pick the num­bers that work best for them (and for hon­est people just mak­ing a point to get a little hy­per­bol­ic).

There was a time, in Oc­to­ber and Novem­ber, when the only thing we could learn from en­roll­ment data was that Health­Care.gov didn’t work, which we already knew.

But that time has passed. Open en­roll­ment is over. We have real data. And the fact is that no one met­ric tells the whole story of Obama­care en­roll­ment — and no met­ric can be tossed aside as ir­rel­ev­ant.

Over­all en­roll­ment mat­ters. The White House tried to get away from this num­ber when it was low, in­sist­ing that there was no ul­ti­mate goal for en­roll­ment. Now, it’s Re­pub­lic­ans — who had no qualms re­ly­ing on the en­roll­ment num­bers when they were low — ac­cus­ing the ad­min­is­tra­tion of “cook­ing the books.”

Roughly 7.1 mil­lion people have se­lec­ted an in­sur­ance plan through Obama­care’s ex­changes. That is im­port­ant be­cause the whole point of the Af­ford­able Care Act is to cov­er mil­lions of people. Wheth­er that’s hap­pen­ing is ar­gu­ably the most im­port­ant ques­tion about the law’s suc­cess. There are im­port­ant things this num­ber doesn’t tell us, but one very im­port­ant thing it does.

The holes in the en­roll­ment data also mat­ter. Crit­ics would have you be­lieve they are all that mat­ters, and that once they’re filled, the 7.1 mil­lion fig­ure will crumble and the law will un-pass the mile­stones it has already cleared. That’s not likely — but these ad­just­ments are still im­port­ant.

We don’t know how many people have paid their first premi­um — the fi­nal step to ac­tu­ally hav­ing cov­er­age. The best es­tim­ates avail­able now sug­gest it’s about 80 to 85 per­cent. If that holds, the 7.1 mil­lion sign-ups will trans­late in­to about 6 mil­lion ac­tu­al en­rollees, give or take. Lower than what the ad­min­is­tra­tion has said? Yes. Low enough to destabil­ize the law or move it back across the threshold of first-year suc­cess? No. Six mil­lion would still meet the Con­gres­sion­al Budget Of­fice’s re­vised ex­pect­a­tions for ex­change en­roll­ment, tak­ing the Health­Care.gov de­bacle in­to ac­count.

(And yes, CBO’s es­tim­ates for en­roll­ment very much mat­ter.)

The num­ber of pre­vi­ously un­in­sured people also mat­ters. The point of the law wasn’t just to cov­er mil­lions of people, but to re­duce the num­ber of un­in­sured by mil­lions of people. Some sur­veys sug­gest ex­change en­roll­ment is mostly people who already had cov­er­age, but those data came be­fore the last-minute sign-up surge.

The mix of healthy and sick mat­ters. Wheth­er premi­ums go up in 2015 de­pends mostly on the mix of healthy versus sick en­rollees in each state, not the total num­ber. Both sides have tried to turn the fo­cus to this stand­ard in­stead of over­all en­roll­ment (Demo­crats when the over­all total was low and no one knew the risk mix, Re­pub­lic­ans when en­roll­ment picked up and the risk mix didn’t look so hot). It is a big­ger ques­tion when eval­u­at­ing premi­ums and the odds of sur­viv­al, but an ex­change with only 50 people, even if they’re all healthy, wouldn’t be a suc­cess­ful ex­change.

So, the ra­tio of healthy people is pretty im­port­ant, but guess what? No one knows how many healthy people are sign­ing up.

The mix of young and old en­rollees mat­ters. Be­cause in­surers don’t know their cus­tom­ers’ health status un­til people start fil­ing claims, they use age as a stand-in. A young per­son is as­sumed to be health­i­er than someone older. That as­sump­tion isn’t per­fect, and some policy ex­perts push back against the fo­cus on age be­cause age it­self isn’t ter­ribly im­port­ant. They’re right, it’s not, but it’s the best tool we have to eval­u­ate something that is im­port­ant.

And that’s what most of this squab­bling comes down to: us­ing the best data you can to as­sess a range of dif­fi­cult ques­tions.

The fi­nal en­roll­ment num­ber won’t be 7.1 mil­lion; it will be the 80 to 85 per­cent of those people who pay their premi­ums. But that doesn’t make 7.1 mil­lion a red her­ring — 80 per­cent of 7 mil­lion is a lot more than 80 per­cent of 5 mil­lion.

The num­ber of un­in­sured people get­ting cov­er­age is crit­ic­al to eval­u­at­ing the law’s pro­gress to­ward its broad­est, most fun­da­ment­al goals. It does not have much bear­ing on wheth­er premi­ums go up next year, which is also an im­port­ant ques­tion, be­cause if premi­ums go up, en­roll­ment might be lower. And en­roll­ment mat­ters.

It all mat­ters.

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