Following three years of planned implementation, Obamacare's state and federally run health exchanges have been open for business for four months as of today. The results, as you might imagine, have been mixed with the glitch-filled October and November months acting as a complete night-and-day to the robust enrollment figures we've witnessed since the start of December and through the entirety of January.
As you may have also suspected, these bifurcated results have also brought a number of wildly pessimistic and optimistic claims regarding Obamacare's future into the limelight. But, rather than stew on the countless opinions and prognostications associated with Obamacare, I prefer to instead dwell on the facts surrounding Obamacare's implementation in these early months.
Here are the 10 Obamacare facts that really matter after the first four months.
1. Obamacare enrollments have reached 3 million.
The most important figure that everyone is likely to focus on came in a blog post from the administrator of the Centers for Medicare and Medicaid Services last week, Marilyn Tavenner, that Obamacare enrollment has now reached 3 million. If you're going strictly by the Department of Health and Human Services estimates, Obamacare enrollments are still running behind schedule, as the agency had forecast 3.3 million enrollees by the end of December. However, momentum is currently undeniable with more than 2.6 million people signing up for health insurance between Dec. 1 and Jan. 24.
2. 6.3 million have been deemed eligible for Medicaid or CHIP coverage.
Also within Tavenner's post was the figure that between October and December 6.3 million people were deemed eligible to enroll in Medicaid or the Children's Health Insurance Program, or CHIP. One of the primary tenets of Obamacare was to bring access to health insurance to individuals who previously had no access or could not afford health insurance. With 6.3 million people enrolling, it would appear that this new law is accomplishing its goal of lessening the number of uninsured.
3. The U.S. uninsured rate dropped 1.2% ... in a month!
Based on a Gallup poll that has been conducted with some regularity since 2008, the percentage of U.S. uninsured dropped 1.2% in January to 16.1% from 17.3% in December. This marks the lowest uninsured level in three years, and is a marked decline from the 18.6% uninsured level reported just this past summer. However, I wouldn't suggest getting too lost in this figure, as it includes both the 3 million paying enrollees, and the 6.3 million government-sponsored enrollees, meaning an uninsured rate drop was expected. Whether Obamacare can continuously lower the uninsured rate over the long term is the real question left remaining.
4. Gold and platinum plans are selling poorly -- but that's OK.
According to mid-January data from the HHS, a majority of enrollees have chosen bronze (20%) or silver plans (60%) thus far and have primarily left gold (13%) or platinum (7%) level plans on the shelf -- and that's quite all right with the HHS and insurance companies! Just like purchasing any product in a retail environment, lower-priced items can have the beefiest margins. Selling plans with lower premiums that require higher out-of-pocket expenses by members for doctor visits, medication, and hospitalization, can actually result in fewer medical expenses for the insurer, as long as the consumer continues to pay their end of the bargain, that is!
5. Not enough young adults are signing up.
Also according to that HHS mid-January report, young adult enrollment, the key component that I've stated will determine the long-term success or failure of Obamacare, is running below projections. Through Dec. 28, 489,460, or 24%, of all enrollees were between the ages of 18 and 34.
The reason this age group is so crucial is that these individuals are often healthy, and their premiums are needed to help offset the higher costs associated with treating elderly and terminally ill patients. With the Patient Protection and Affordable Care Act mandating broader health benefits for insurance plans, insurers can no longer deny coverage to patients with pre-existing conditions. This scenario makes the importance of young adults signing up paramount to Obamacare's success.
6. Not all insurers are confident in the long-term success of Obamacare.
Just because Obamacare is the law of the land and is expected to bring potentially millions of new members into the fold, not all insurance companies are sold on its success. Aetna (NYSE:AET) CEO Mark Bertolini, who has been critical of the new health reform law in the past, spoke with CNBC last week and noted that a lack of early enrollment success and a shortage of young adults could cause his company to drop out of Obamacare completely based on the right scenario. Investors should take note of what the nation's largest insurers are saying but may also want to take Bertolini's gripe with a grain of salt, as Aetna decided not to participate in California or New York's individual health exchange, and thus far these have been two of the three best performing states with regard to enrollments.
7. Obamacare opposition is at an all-time high.
It pretty much doesn't matter which poll you look at -- the percentage of respondents who view Obamacare as unfavorable is at or near an all-time high. The January Kaiser Family Foundation poll showed that those who view Obamacare as unfavorable stood at 50%, the highest level since October 2011. A CNN/ORC International poll conducted in mid-December pointed to a record number unfavorable views of Obamacare with opposition to the law standing at 62%. In other words, select Americans may be signing up, but they may be doing so out of the necessity of Obamacare now being a law with an attached penalty for noncompliance, rather than by choice.
8. State exchange problems are back in the spotlight.
The Obamacare website, Healthcare.gov, may not be perfect -- there are still kinks to work out with regard to adding a baby to a family insurance plan -- but the "glitch spotlight" is actually back on state-run health exchanges such as those in Hawaii, Oregon, and Vermont. Vermont's exchange spends just as much time being upgraded as it does running, Oregon's exchange just went online recently, a few months late, and Hawaii, as of the end of December, was dead last in the nation in enrollments because of its glitch-filled exchange. Not surprisingly, CGI Group (NYSE:GIB), the primary architect of Healthcare.gov, was also the contractor assigned to design Hawaii and Vermont's state-run exchanges.
9. CGI Group is out as Healthcare.gov's primary architect.
Given the aforementioned problems directly caused by CGI Group's source code, the Centers for Medicare and Medicaid Services announced in mid-January that it will not reneCGI's contract which is set to expire on Feb. 28. Instead, the CMS announced that it had hired global IT-consulting company Accenture (NYSE:ACN) to fill the void. Accenture will inherit the day-to-day activities of Healthcare.gov's operations, and will be instrumental in implementing changes that will allow small businesses to be integrated into the website before open enrollment for 2015 starts on Nov. 15.
10. March 31 is the most important deadline.
Last, but certainly not of least importance by any means, is that the March 31 coverage cutoff remains the most important deadline on the horizon for Obamacare. Because the laws of the PPACA allow citizens to go without health insurance for up to three months in a year without fear of the individual mandate penalty, it's pretty conceivable that those who view Obamacare unfavorably, but don't want to pay the penalty, will wait until the end of March to fully enroll. Therefore, it's still plausible that Obamacare could hit the HHS target of 7 million enrollees, but we simply won't know until the mid-April update from the HHS.