With another week in the books, enrollment in the Affordable Care Act, known best by its shorthand Obamacare, continues to outpace the subdued enrollment estimates from the Department of Health and Human Services that were released in November.
After announcing that it expected just 9.1 million enrollees by the end of the 2014-2015 enrollment period, the federally run health exchange known as Healthcare.gov added another 102,896 plan selections in week seven (Dec. 27, 2014 through Jan. 2, 2015), bringing its cumulative total to nearly 6.6 million plans selected. Total applications submitted also increased by just shy of a quarter million in week seven to more than 8.4 million. Chances are unlikely that almost 2 million people would submit an application without eventually completing the enrollment process, so I'd expect this figure to rise.
And, remember that Healthcare.gov's weekly Obamacare enrollment report doesn't include enrollment from the 14 state-run exchanges. The last time we heard from the individual states they had amassed more than 1.1 million plan selections, collectively. All told this means Obamacare enrollment should be currently at a minimum of 7.7 million, if not markedly higher since we haven't received official data from these 14 states in a few weeks.
In spite of enrollment figures currently running ahead of enrollment period-end estimates, there are still three key events that consumers would be wise to circle on their calendar in 2015.
Event No. 1: February 15, 2015
February 15th is a critical day for Obamacare as it marks the last day of the 2014-2015 open enrollment period. As we witnessed last year, Obamacare enrollment essentially doubled in the final month as procrastinators who had been sticking to the sidelines and not wanting to pay their premiums finally had no choice but to sign up. It's very possible we could be witnessing something similar this year, as evidenced by the 1.9 million person gap between applications submitted and plans selected.
As long as consumers have insurance for nine out of 12 months out of the year, they're not in violation of the actionable component of the ACA known as the individual mandate. Therefore, waiting until Feb. 15 will ensure that these late enrollees don't have to pay January's or February's premium payment, but are still in compliance with the mandate. For younger adults running on a tighter budget or those who feel invincible, it represents a way for them to keep a few hundred dollars in their pocket.
Long story short, Feb. 15 could be a day where we witness a huge surge in enrollment, so it's going to pay for consumers and investors to closely watch this date.
Event No. 2: April 15, 2015
Another deceptively key date this year will be Tax Day, April 15th, since this is the first year where consumers will have to report whether or not they purchased health insurance for 2014. If a consumer chose not to and he or she isn't exempted from the individual mandate then they'll be required to pay the greater of $95 or 1% of their modified adjusted gross income, up to the full cost of a bronze plan.
However, Tax Day is intriguing for more than just the implementation of ACA penalties. In addition to simply answering whether or not you purchased insurance in 2014, taxpayers will also be required to finalize their modified adjusted gross income so it can be compared against the amount of subsidies they may have received. Based on Healthcare.gov's statistics, 87% of enrollees have received a subsidy in the 2014-2015 enrollment period, which is a consistent figure with last year's enrollment period across state-run exchanges and Healthcare.gov. It's estimated that as many as 50% of individuals may have overstated their 2014 income when they had to provide wage guesses sometimes more than a year in advance. Ultimately, this means these individuals could receive a smaller refund or actually owe money back to the government.
Obamacare's effect on taxes will definitely be interesting to say the least.
Event No. 3: June 2015
Lastly, while no specific date has been listed, the U.S. Supreme Court is scheduled to review a case brought against Obamacare that seeks to overturn the right of the federal government's exchange, Healthcare.gov, to hand out subsidies in June 2015.
According to the plaintiffs in the case, the language of the ACA is such that only states running their own exchanges are allowed to pay out subsidies to eligible individuals. However, because there are three dozen states reliant on the federally run Healthcare.gov, the subsidies being divvied out to nearly 6 million people may be ineligible.
There are really two scenarios to consider here. In the first scenario, the Supreme Court finds against the plaintiffs and Obamacare continues more or less unabated. In the other scenario, the Supreme Court rules in favor of the plaintiffs and nearly six million people will lose their subsidies. The average subsidy saves people $264 per month, or close to $3,200 per year. Without these subsidies I'd expect a majority of current subsidy-dependent enrollees to drop out of Obamacare; the cost of purchasing health insurance would simply be too high for them to afford. If this were to happen, each state would have to scramble to set up their own exchange, but it would likely take a year or two before everything would be up and running.
What would happen to Obamacare in the interim if the second scenario plays out is really anyone's guess.
Even though open enrollment for Obamacare is set to close in less than a month, it's obvious we've still got a pretty full slate of events to keep our eyes on in just the first half of 2015.