Obamacare Enrollment Surges to 3.3 Million, but These 5 States Lagged Far Behind

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

You could certainly say that we are getting closer and closer to crunch time for Obamacare with the coverage cutoff date to obtain health insurance in 2014 without violating the individual mandate rapidly approaching on March 31. I've been pushing this date as the most key Obamacare deadline of its opening campaign for months since people are naturally procrastinators, so I'm anticipating quite a surge of enrollments in March.

On Wednesday, though, we received our latest monthly update (link opens PDF) from the Department of Health and Human Services on the enrollment progress behind Obamacare. While total enrollments are still pacing well below the eventual 7 million-person target set by HHS Secretary Kathleen Sebelius, enrollment nonetheless spiked 53%, or 1.146 million, to just shy of 3.3 million people.

Source: Centers for Medicare and Medicaid Services.

Certain enrollment aspects demonstrated positive tendencies, including the fact that 27% of all adult enrollees were young adults, up 3% from the prior months combined. However, this figure still remains startlingly low and could portend considerably higher insurance rates in 2015. 

Five states with the weakest Obamacare enrollment figures
Despite what appears to be robust membership gains across much of the U.S., a number of U.S. states simply didn't live up to lofty expectations with regard to their aggregate enrollment growth or their enrollment growth relative to the prior month. Let's have a look at these laggard states to find out if they have anything in common and then look at a few companies at the end which may suffer because of weaker enrollment figures in these states.

First, here are the five states with the lowest aggregate enrollment growth over the past month:


Total Enrollment Gain





North Dakota






Source: Department of Health and Human Services, aggregate enrollment Dec. 29 through Feb. 1, author's calculations.

No, that's not a misprint... Nevada really did enroll just 31 people in the month of January for a snazzy average of just one new member per day! Abysmal may not be the appropriate word here, but it was the clear underperformer of the bunch. According to a report from the Las Vegas Sun on Thursday, users are dealing with a myriad of website difficulties and long call center waits. 

Hawaii is another non-surprise here with enrollment gains of just 1,422 last month. Just a fraction of enrollees have been able to complete their application because of website glitches, and the state looks no closer to a resolution this month than it was a month ago.

The remaining states – Alaska, Delaware, and North Dakota -- have relatively small populations, so their weak aggregate enrollment figures shouldn't raise too many eyebrows.

However, aggregate enrollment only tells us half of the story. Let's also have a look at the worst five performers with respect to month-over-month enrollment percentage growth.


Enrollment % Gain







New York




Source: HHS, author's calculations.

Now here's an unexpected, but also reasonable shock: all five of the worst performing states on an enrollment percentage basis run their own health exchange. That's saying something because only 14 of 50 states are running their own exchanges. Obamacare's enrollment "underperformance," if you want to call it that, could be traced to weaker month-on-month growth in largely populated markets like Washington and New York.

Then again, it's worth noting that Washington and New York were two of a mere handful of states that had few problems with their individual health exchanges out of the gate. Whereas all 36 states on's marketplace are seeing big gains as these states play catch-up, Washington and New York have delivered very steady gains, albeit at a slower pace this past period.

You'll also note Vermont is on the list as well. Vermont's health exchange was designed by CGI Group (NYSE: GIB  ) , the same lead architect of, so no one is exactly surprised that Vermont's exchange spends just as much time being repaired as it does accepting applications from the public.

Finally, I'd point out that there's a bit of a New England bias among these weak states. Vermont, New York, Connecticut, Maine, New Hampshire, and Massachusetts all showed pretty sizable month-over-month gains on a percentage basis, but none of these aforementioned states grew their enrollment at the national average of 53%.

How this data can help you become a better investor
As you have probably surmised by now, I'm a big fan of dissecting data. Sometimes this is done purely because I enjoy knowing random facts, but other times there's an investable purpose behind a statistical dive, as there is in this case.

The weaker enrollment data here relative to the remaining states in the U.S. could negatively weigh on select health exchange architects, specifically CGI Group and Xerox (NYSE: XRX  ) .

CGI Group is a company we've raked over the coals on a number of occasions. CGI is the primary architect behind, as well as Hawaii and Vermont's largely non-functional health exchanges. With regard to, CGI Group received news last month that its contract would not be renewed, with the CMS opting to instead award Accenture (NYSE: ACN  ) the one-year oversight contract. It's very possible that with a number of serious glitches under CGI's belt that its near-term contracting orders may suffer.

Xerox, on the other hand, is a company I've been touting for more than a year as a clear Obamacare winner. Xerox should benefit from increasing Medicaid processing claims (for which it is California's go-to servicer) and higher contract revenue as the depositor of federal funds for a number of states with regard to their Medicaid expansion program. Xerox also should see big private insurance membership gains via its subsidiary, Buck Consultants, the operator of RightOpt. However, Xerox is also the lead architect of Nevada's much-maligned health exchange, and any ongoing troubles here could weigh on Xerox as it's in the midst of a multi-year turnaround.

With regard to insurers, this might be one of the very few times where national insurer WellPoint (NYSE: ANTM  ) doesn't come out smelling like a rose. WellPoint offers health plans in California, New York, Nevada, Maine, and New Hampshire to name a few states. While California saw the most robust enrollment growth of any state, every state mentioned here saw enrollment growth of less than 50% over the past month, which is below the national average. I'm pretty confident Medicaid-based growth could make up for this paid-enrollment shortfall, but it's the first time in months that WellPoint's membership gains may be showing signs of slowing.

Coasting into the finish line
Over the next two months we're set to learn a lot about Obamacare and what our future premiums may look like. Keep your eyes focused on young adult enrollment, which at the moment is tracking below estimates, and patiently wait for cumulative enrollment data which we should have by mid-April.

Still lost as to how Obamacare will affect you? Let us solve that problem in just a few minutes!
Obamacare seems complex, but it doesn't have to be. In only minutes, you can learn the critical facts you need to know in a special free report called "Everything You Need to Know About Obamacare." This FREE guide contains the key information and money-making advice that every American must know. Please click here to access your free copy.

Read/Post Comments (2) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 16, 2014, at 4:28 PM, jammerh wrote:

    <I>"...a company we've raked over the coals on a number of occasions...".</I> Indeed. Why not mention a few of the many successful contracts CGI has "under its belt" ? Where's the real evidence CGI was to blame? How do we know for certain CGI messed up, and the situation wasn't anything more than a desperate search for a scapegoat?

    You need to get your facts straight before conjuring up so much in the way of negative assumptions.

    If you look closer you'll notice that CGI handles the IT for more than the state of Vermont. A couple of years ago it acquired Stanley, a U.S. company which was absorbed into its CGI Federal division. That division has successfully taken care of the IT needs for many U.S. military, government and secret service entities. Most of which are regularly renewed with a high degree of client satisfaction.

    CGI is the world's fifth largest IT services entity. Why is it we seem to pick on it more if it's a Canadian company? If IBM has a contract expire and the business goes to someone else do we then disregard all of that company's successes and conclude that IBM is necessarily a defective company? If a U.S. company fails to we then conclude that all U.S. companies must be defective?

    There are a lot of reasons a client can fail to renew a company's services. Maybe the client's expectations are too high. Maybe they tried - unrealistically - to incorporate too many changes at the last minute. A lot of people had vested interests in seeing the project fail. Who knows what actually happened?

    When we don't really know what happened, blaming CGI is amounts to little more than shooting the messenger.

  • Report this Comment On February 16, 2014, at 10:17 PM, Pete50 wrote:

    My question is why anyone would want to sign up for what amounts to catastrophic health care insurance instead of "affordable" health care?

    Obamacare does NOTHING to help the very people it claims to be taking care of, as shown by the high deductibles and out of pocket costs. As shown by every website that lists them, such as Healthpocket.

    Say you can only afford the lowest cost Bronze Plan, and your child has a short stay in the hospital. Say the bill comes to $3,000. That is going to come out of your pocket... Obamacare won't pay one cent of that bill and you will still have a deductible of $7,386 before it ever will!

    So what are you paying around $300 a month for? You might as well NOT had the insurance in the first place, because the bill is still all yours. Even with subsidies, you will have to pay $10,386 out of your own pocket before Obamacare pays a single cent.

    In short, the ACA is Catastrophic health insurance that will take your payments every month, but unless you become severely ill, will leave YOU holding the check.

    Basically, you are paying your premiums for NOTHING!

    But the insurance companies love it... they get to keep the money.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2839364, ~/Articles/ArticleHandler.aspx, 9/4/2015 2:57:19 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Sean Williams

A Fool since 2010, and a graduate from UC San Diego with a B.A. in Economics, Sean specializes in the healthcare sector and in investment planning topics. You'll usually find him writing about Obamacare, marijuana, developing drugs, diagnostics, and medical devices, Social Security, taxes, or any number of other macroeconomic issues.

Today's Market

updated Moments ago Sponsored by:
DOW 16,044.05 -330.71 -2.02%
S&P 500 1,916.06 -35.07 -1.80%
NASD 4,663.06 -70.44 -1.49%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/4/2015 2:41 PM
ANTM $141.41 Down -1.54 -1.08%
Anthem CAPS Rating: ****
GIB $35.94 Down -0.48 -1.32%
CGI Group, Inc. (U… CAPS Rating: ****
XRX $9.88 Down -0.14 -1.40%
Xerox Corp CAPS Rating: ****
ACN $93.86 Down -1.75 -1.83%
Accenture CAPS Rating: *****