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It may be hard to believe, but today marks the five-month mark since Obamacare's state and federally run health exchange marketplaces went live. We have certainly come a long way from day one, where technical glitches and overloaded servers made the federally run Obamacare website, Healthcare.gov, practically unusable. But even now, after five months, there are still a number of issues that need correcting.
In some aspects, Obamacare is the saving grace to millions of people who previously had no access to affordable health care. To others, Obamacare is the end of health care as we know it. As you might imagine, this major division of opinions on Obamacare has created a number of optimistic and pessimistic claims about what will happen next.
Rather than stew on these opinions, I choose to cut through the white noise at the beginning of each month and note the most important new and ongoing facts that every American should know about Obamacare.
Here are the 10 Obamacare facts that really matter after the first five months.
1. Obamacare enrollment has crossed the 4 million person mark.
Obamacare enrollment is still well off the mark set by Department of Health and Human Services Secretary Kathleen Sebelius of 7 million enrollees before the coverage cutoff period ends; but it's clear that enrollments have surged since the majority of technical glitches were dealt with. According to a blog entry by Centers for Medicare & Medicaid Services Administrator Marilyn Tavenner, Obamacare enrollments have hit 4 million as of Feb. 25. This means roughly 700,000 people signed up for health coverage in the first three-and-a-half weeks of February, and that more than 3.6 million have signed up since Dec. 1.
2. Too few young people are still signing up.
Not lost in the aforementioned signup totals is the fact that a critical group of uninsured people that the HHS, CMS, and insurers need to court the most isn't signing up as expected. According to the mid-month release of enrollment data by the HHS, young adults accounted for 27% of all enrollees in the Dec. 29 through Feb. 1 period, which was actually up from the 24% witnessed between Oct. 1 and Dec. 28. However, the current 25% enrollment figure is well below the 38% targeted by the HHS to help offset insurers' costs to treat terminally ill and elderly patients. Young adults are typically healthy, and without their premiums the overall cost of premiums could rise next year across the board.
3. Obamacare is failing to court another crucial group.
According to a study released last month by private research group The Commonwealth Fund, Obamacare's biggest shortcoming may not be in courting young adults so much as courting uninsured Hispanic citizens. Its survey found that less than half (49%) of Hispanics who are potentially eligible to receive a subsidy in their state were aware of their states' marketplace. An even lower 19% had affirmed that they've shopped the exchanges for insurance compared to the national average of 24%. There are four key barriers to entry potentially keeping Hispanics on the outside looking in, and if the HHS doesn't address these issues, Obamacare enrollment may not hit its targets.
4. Most insurers are losing money from Obamacare -- and that's OK.
Based on quarterly earnings reports from some of our nation's largest insurers, Obamacare is costing them money rather than padding their bottom-line. National insurers CIGNA (NYSE: CI ) and Aetna (NYSE: AET ) reported adding about 20,000 and 200,000 members, respectively, via Obamacare, with WellPoint (NYSE: ANTM ) adding more than 400,000 members through the latter part of January. Both CIGNA and Aetna, which pulled out of a number of individual marketplaces prior to the launch of Obamacare, are both losing money while WellPoint is seeing a profit. What investors need to remember is that these insurers are predominantly focused on corporate clientele and that Obamacare accounts for only a small fraction of their revenue, and an even smaller portion of their profits and/or losses.
5. Silver and bronze plans were even more popular last month.
Based on that same HHS mid-February data release, the amount of health plans which are either silver or bronze (i.e., the two least-expensive on a premium basis) have jumped again to 81% of all plans purchased from 80% in the prior month. You might be under the impression that this is bad news since consumers are opting for lesser-expensive plans, but it's actually great news for insurers. It will mean less out-of-pocket expenses upfront for insurers unless each and every member hits their maximum out-of-pocket expenses for the year. This is a case where lower priced products actually carry some of the beefiest margins.
6. Gulf Coast enrollment is soaring while Nevada and Hawaii are lagging way behind.
Although traditionally large states like California and Florida are providing the bulk of Obamacare enrollments, no region of the country saw enrollment surge more in the past month than the Gulf Coast. Mississippi saw its Obamacare enrollments spike 116% while Louisiana and Texas also delivered an enrollment surge that was well above the national average of 53%. On the flipside, Hawaii is practically standing still, plagued by ongoing website issues. In similar fashion Nevada has actually stood still, adding just 31 enrollees in all of January -- you heard me right, 31! Situations like this do nothing but hurt the credibility of the marketplace architects -- in this case CGI Group (NYSE: GIB ) for Hawaii and Xerox (NYSE: XRX ) for Nevada – and prevent hundreds of thousands of eligible and uninsured Americans from enrolling.
7. Obamacare could translate into 2.5 million lost jobs by 2024.
In early February the Congressional Budget Office came out with its latest Budget and Economic Outlook Report which notes that the Affordable Care Act will cause a reduction in workers' hours that will cost the equivalent of 2.5 million jobs by 2024. I believe part of this statement is correct in that the ACA is only exacerbating a push toward increasing job specialization thanks to an ongoing technology revolution and pushing those who lack a high degree of specialization into part-time roles. However, we also have to consider that this reduction in hours for non-specialized workers is also creating increased job security for those workers who do have a high degree of specialization.
8. Disapproval of the law is still near or at an all-time high.
Time has certainly not healed all wounds with a majority of those polled still disapproving of Obamacare relative to those who approve of it. Gallup's February poll notes a slight improvement in sentiment with approval rising to 41% from 38% and disapproval dipping to 51% from 54%, however the Kaiser Family Foundation's January poll showed that more people viewed the ACA unfavorably (50%) than had done so since October 2011. That negative sentiment continues to weigh on the HHS' efforts to reach 7 million enrollees before the coverage cutoff date.
9. Delays are hurting the credibility of Obamacare's remaining deadlines.
Perhaps nothing has become more synonymous with Obamacare in the early going than delays. Last month, Obamacare delayed aspects of the employer mandate for midsized and large corporations until 2016, giving them even more time to comply with the law and pushing the new deadline a full two-years beyond the original deadline when the law was first set to be implemented. Following a myriad of other delays, the urgency to sign up and the penalty assigned for not having insurance could begin to lose credibility if these deadlines remain fluid to fit the administrations' needs.
10. March 31 remains the only deadline you need to be concerned with.
Finally, as we ended with last month, March 31 remains the only important date you need to keep your eyes on. It's the last day that citizens can sign up for health coverage in 2014 and not violate the individual mandate. It also marks the perfect point for people who've avoided paying premiums for as long as possible, or who view Obamacare unfavorably but don't want to be in violation of the individual mandate, to sign up. By mid-April we'll have concrete answers on how this first year of enrollment fared and should be able to make solid estimates as to where premiums will be headed next year by then.
One under-the-radar fact is that Obamacare isn't as confusing as it might appear on the surface
Obamacare might seem 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.