This Poll Uncovers a Much Bigger Concern Than Obamacare's Dismal Enrollment Figures

Halloween has come and gone, but it's felt like one continuous nightmare for the Obama administration since the launch of the state and federally run health exchanges six-and-a-half weeks ago.

The primary problem has been with the federally run website, Healthcare.gov, which was only able to process some 26,794 health insurance enrollments across 36 states within the first 33 days. Even with the knowledge that health insurance enrollments tend to be very back-loaded, this is a disconcertingly low figure that is bound to have insurers worried and is only fueling opponents of the Patient Protection and Affordable Care Act, who were already calling for its repeal. And incredibly enough, I'd contend that it's not even Obamacare's biggest concern!

Ultimately, Healthcare.gov is going to be repaired; it just remains to be seen whether that gets done by the end of this month as Healthcare.gov spokesperson Jeffrey Zients has said or if it needs extra time. With a majority of enrollees expected to wait until the last minute to sign up anyway, Healthcare.gov's technical problems really aren't a gigantic worry yet.

Obamacare's greatest concern
Instead, a poll conducted by Gallup last week points to the one thing that Obamacare optimists and insurers should fear the most: Uninsured Americans are avoiding Obamacare's health exchanges.

Last week, Gallup asked 854 uninsured adults across the U.S. whether they have "personally gone to, or attempted to go to, a government health insurance website since the Internet-based health exchanges opened on October 1, or not?" Just 18% of uninsured individuals responded that they had done so, with 22% overall planning to do so at some point.

This is a big problem, because in a previous Gallup poll 44% of uninsured respondents had answered that they planned to obtain health insurance through the exchange, with 25% also noting that they intended to pay the penalty. In other words, in a little over a month the number of uninsured people intending to sign up on an Obamacare health exchange has been halved!

Why are the uninsured avoiding Obamacare's exchanges?
The way I see it, there are a couple of reasons why uninsured Americans are currently avoiding the Obamacare exchanges.

First and foremost is the bad press surrounding the numerous glitches associated with Healthcare.gov and select state-run exchanges like Oregon and Vermont. If the outward perception generated by the media emphasizes the health exchanges' problems, it gives those teetering on the edge enough reason to just hold off from visiting the website or enrolling for health insurance.

Second, let's keep in mind that a good chunk of uninsured Americans in this country are young adults who are considered to be generally healthy. These healthier young adults are what insurers need most for the ACA to be successful, since their premiums help offset the higher medical costs associated in treating the elderly and sick. Young adults are also more technologically savvy, which can be a bad thing if the health exchanges aren't working; because so many young adults incorporate technology into their everyday lives, any glitch may give them recourse to simply not come back to the Obamacare website for months, if ever again.

Third, there's just not a lot of familiarity with Obamacare even years after its passing. Although you'll find plenty of people who'll admit they understand that it's now a law, many, especially young adults, have no clue how the PPACA will directly affect them. Without making that direct connection, many young uninsured adults will simply pass on digging deeper into the subject.

Finally, as my Foolish colleague Dan Caplinger so rightly put it, the penalty is really "much ado about nothing" in 2014. The overall penalty for not obtaining health insurance is the greater of 1% of a person's income or $95, which is not particularly damaging for many compared to the alternative of paying $200 or more a month in health insurance. For many uninsured folks it's a simple numbers game -- and the penalty is winning more often than not!

How this could affect your money
Right now, UnitedHealth Group (NYSE: UNH  ) and Aetna (NYSE: AET  ) are looking like two modest early stage losers of Obamacare. It'd be a long shot to say any state in particular is performing well in regard to enrollments, but California and New York are leading the pack, with 35,364 and 16,404 enrollments, respectively, in the first 33 days. UnitedHealth Group and Aetna, however, both pulled out of California's state-run health exchange months ago, with Aetna also bowing out of New York. Admittedly, these insurers aren't missing a lot of new sign-ups -- but they certainly aren't seeing many, either, in the states they did decided to compete in.

On the flip side, if you as an investor are focusing on insurers that are targeting low-income individuals and families that will benefit from the Medicaid expansion in states like California, then you should be in great shape. A strong name to potentially consider here would be Molina Healthcare (NYSE: MOH  ) . Molina focuses on serving Medicaid-based members, and with some 1.4 million people in California expected to be eligible for the Medicaid expansion under the PPACA it could theoretically see a nice surge in its membership figures by the end of next year.

Finally, don't forget those dark-horse private insurance platform providers like Health Net (NYSE: HNT  ) , which are coming out smelling like roses with the numerous problems Healthcare.gov has undergone. Health Net has a huge presence in California's market, and may be a source that small businesses and individuals turn to if the exchange fixes aren't completed within the next month or two. Health Net has years of experience, so this would be a natural boost for its business.

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  • Report this Comment On November 15, 2013, at 7:00 PM, troothis wrote:

    Why do I feel like I just read an ad for Obamacare?

  • Report this Comment On November 17, 2013, at 8:22 AM, peckbill wrote:

    Beware the GOP/Tea party members of Congress have caused a lot of grief over the past few years; they have refused to go along with almost none of the Democratic proposals. Their next move will be to make amends with all of you. Some of you will be sucker enough to buy their lies and big money will be spent to convince you that all of the GOP/Tea Party is not bad. Do not believe their lies and deceptive moves. These individuals shown strong indications that they are members of the KKK. These members of Congress shut down the United States government because they did not get their way and cut more 150 million people out of available medical care by eliminating the Patient Protection and Affordable Care Act (the GOP voted more than 45 times but failed every time); these actions would expose America to foreign threats and economic poverty; the GOP does everything it can to make sure the poor remain poor and the middle class is reduced to poverty. The cost, to the American people, for the GOP/Tea Party tantrum is over 60 billion dollars; none of this money lost by Congressmen/women. In truth neither the GOP nor the Tea Party can shut down the government; they can only stop paying selected items that anger the people and make the people hate them more. The GOP (Congressman Cantor) has lied about national debt reduction; the debt has been reduced more under the current Look at other crippling changes supported by the GOP, 1) in 2006 the GOP enacted a law requiring advanced money payments that has crippled the U.S. Postal Service to the extent that it is now threatened with enormous cuts and restrictions on services, 2) the GOP has enacted laws and made adjustments in federal and state operations that greatly cripple women rights and basically tell women, you are a second class citizen, you don’t count, and 3) the GOP fights, every day, to cut much needed services such as Social Security, retirements, including military capability, that makes America appear to all foreign countries as a downward spiraling Nation without leadership, 4) drastic reductions in the food stamp program that is needed to insure our hungry, mostly single mothers and kids, are fed at the minimum healthy levels(enforcement of the proper enactment process would greatly eliminate much of the waste and abuse in all these areas), 5) supports legislation in every state that would restrict voting rights of blacks, Hispanics and whites that support Democratic candidates or beliefs, 6) tried to hold the United States of America hostage over a continuing resolution and made up debt problems for accost to the American people of over 60 billion dollars, 7) there has not been a United States Budget in over four years because of a lack in GOP co=operation to build America for the future, 8) openly supports the Heritage Foundation, an extremely conservative organization that is at best un-American and 9) the GOP/TEA Part has traditionally taken a firm stand against raising the minimum wages; the Democrats have made significant forward progress in this area in California, Nebraska, Ohio and other States that look to take care of the people with low incomes. These are all very serious anti-American acts.

    The GOP and Tea Party members of Congress and those who support them are not true Americans. These people are determined to bury America by stripping Americans of their Constitutional rights. Do not be fooled by GOP and Tea Party promises; show them that the American citizens are still in charge as they were during 1776. America is for Americans; the constitution is the United States of America Constitution; it doesn’t belong to foreign powers and it damn sure doesn’t apply to them. The GOP members have their own agenda and they are not willing to work with other members of Congress or grass roots people; effective use of the word compromise eludes their small brain. Great Americans wrote the Constitution to free us from oppression from foreign soil, let us fight to keep it that way. Fight for America and get rid of the GOP and Tea Party; and, if a Democrat or Independent offers aid and support to the GOP or Tea Party they should also be voted out of public office. Also, do not believe that the Tea Party is breaking away from the GOP; the Tea Party is still and will always be with the GOP and be un-American.

  • Report this Comment On November 17, 2013, at 11:21 AM, skypilot2005 wrote:

    On November 17, 2013, at 8:22 AM, peckbill wrote:

    "The GOP and Tea Party members of Congress and those who support them are not true Americans."

    peckbill, how about these quotes?:

    “President Obama said at least 24 times, “If you like your health plan, you can keep it.” & “If you like your Doctor you can keep them.” Now we learn that the administration knew from a 2010 HHS report that as many as 93 million Americans could lose their health insurance because Affordable Care Act implementation makes them illegal.”

    “With the Obamacare website a technical disaster, people losing policies cannot even find out how much Obamacare replacements will cost them. In 44 states, replacement policies are predicted to cost substantially more, except those that taxpayers subsidize.”

    Nice try but, OBama and the Democrats own this disaster.

    Sky

  • Report this Comment On November 17, 2013, at 11:48 AM, Psychoderelict wrote:

    First, Peckbill is a 'Useful Idiot'. Dem's refused to allow any Repub's to make changes to ACA, which was written by E. Emauel and the Center for American Progress. Repubs introduced all kinds of bills, including 'Health Savings Accounts' and Tort Reform, which Dems declined when they had Full Power Pelosi in charge.

    Overall, this article is self explanatory, yet still fails to address the main problem. ACA DOES NOT lower costs for health care. Sticker Shock is WHY the Website doesn't work. 60% of the country, including Democrats like me were against Obamacare in the first place. Now, everyone will pay more for health insurance, and fewer will be covered.

    It ain't NO TEA PARTY problem, its a FINANCIAL DISASTER for the entire country.

  • Report this Comment On November 17, 2013, at 5:25 PM, RJFL99 wrote:

    I wonder if Peckerhe@d wrote that by himself or just copied it from the DNC website? I suppose if you're on the government teat and don't have to work for a living you've got the time to write something like that yourself, but I doubt it.

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