The 3 Most Important Obamacare Questions Yet to Be Answered

Don't look now, but we're less than 48 hours away from Obamacare's health insurance coverage deadline for 2014. With the exception of extension for special circumstances that don't allow currently uninsured citizens from completing their enrollment by tomorrow, Obamacare's state and federally run marketplaces will close to new members until Nov. 15 when enrollment for 2015 kicks off.

A lifetime's worth of opinions have been thrown around over the past year as to whether or not the Patient Protection and Affordable Care Act, known better as Obamacare, would end with success or disaster. To that end, both optimists and pessimists have been given a bevy of ammo to support their side of the argument.

When all is said and done, however, and enrollment for 2014 closes on Monday night when the clock strikes midnight, there are only three Obamacare enrollment figures that will be of importance. These are figures we don't yet have the final tally on, but they're by far the most crucial figures of all.

What percentage of enrollees were considered young adults (18-34 years old)?
Back in late September I opined that the true success or failure of Obamacare over the long-term would be determined by its ability to attract young adults – those aged 18-34 years of age – to enroll. Young adults are often healthy, so their premiums are needed by insurers to help offset the higher costs associated with treating terminally ill and elderly patients. Because insurers can no longer deny coverage to people with preexisting conditions, the importance of young adults is now that much more important.

Source: White House on Flickr.

As of the latest update in mid-March which spanned enrollment data through March 1, just 25% of  enrollees were classified as young adults. By comparison, the Department of Health and Human Services had been targeting a figure closer to 38%. One assumption being tossed around is that if the number of young adults signing up doesn't improve dramatically in March it could lead to much higher premiums in 2015. Conversely, a surge in young adult enrollment in March could greatly quell those concerns.

There are a lot of factors working in favor of increased young adult enrollment this month including the urgency to sign up with the deadline now less than 48 hours away. Although I personally signed up back in October through my state-run exchange in Washington, I can speak for other 18-34 year-olds in that we generally wait till the last possible moment to pay our bills. This latest surge in enrollment figures very well could be headed by young adults, but the mid-April update on the final figures will certainly tell the tale.

How many people fully enrolled?
Another critical figure, but perhaps of slightly less importance than young adult enrollment, is the total enrollment figure for Obamacare.

Originally, the Centers for Medicare and Medicaid Services had, prior to the opening of Obamacare's health exchanges on Oct. 1, projected a total of 7 million enrollees. Following the first two months of unsuccessful signups caused by server malfunctions and glitches in IT software for federally run Healthcare.gov and a handful of state-run exchanges, it appeared that this figure was beyond a longshot.

Source: Centers for Medicare & Medicaid Services.

Earlier this week, however, we learned from the HHS that total Obamacare enrollment had hit 6 million, meaning more than 1.7 million people had signed up in less than four weeks since the last update. This figure is also important as it meets the lowered estimate of 6 million enrollees from the Congressional Budget Office following the October and November software meltdown. The administration estimates that 6 million enrollees are required to ensure that the insurance system remains sustainable -- and that number was clearly hit. 

The big question now is exactly how many people signed up in total. Although a cumulative figure is no longer as important, more enrollees are just icing on the cake to insurers' top-line. WellPoint (ELV 0.15%), for instance, is already profitable from the more than 500,000 enrollees it's signed up, and any major surge in total enrollment is likely to boost its own figures higher. It could also translate into positive news for national insurers such as CIGNA (CI) and Aetna (AET) which are known better for their corporate insurance policies, but who've thus far been losing money in the individual market under Obamacare. A surge beyond the estimated 6 million by the CBO could help stem those losses and relieve some of the perhaps unwarranted pessimism surrounding these two insurers.

How many newly insured citizens did the Medicaid expansion add?
Lastly, an often overlooked point of Obamacare is that it helped expand Medicaid coverage in 26 states, plus D.C., bringing millions of previously uninsured individuals who did not qualify for Medicaid into the system.

Source: Vic, Flickr.

On the surface this figure may seem like a drag as it's made up entirely of people who receive assistance from the government to pay their health care needs.

However, having more lower-income Americans insured through the government should bode well for both acute care hospital providers and pharmacies in general which could help lower long-term costs in these areas.

Theoretically, hospitals such as HCA Holdings (HCA 1.70%) should benefit from more insured people walking through their doors to receive treatment. As long as citizens meet their end of the bargain and cover their maximum-out-of-pocket costs then everyone wins. With Medicaid patients that's not even a concern since the government is covering all out-of-pocket expenses. HCA wrote off $3.86 billion, or roughly 10% of its revenue last year, as doubtful, therefore any reduction in doubtful revenue through a lower rate of uninsured patients could go a long way to boosting its margins.

Similarly, pharmacies like Walgreen (WBA -0.11%) are liable to see an uptick in business and profitability if Medicaid enrollment surges. Medicaid is going to give low-income individuals and families a chance to get preventative care at the doctor's office that previously wasn't available to them, which is likely to result in more preventative care prescriptions written than in year's past. Since Walgreen and its pharmacy peers are struggling with front-end sales as discounting and competition heats up, they're counting on strong pharmacy growth, be it from generics or branded drugs, to drive their bottom-line higher.

I'm very eager to see what the final Medicaid enrollment tally will be, and so should you!