When Consumers Weigh in on Obamacare, an Interesting Misconception Emerges

Source: White House on Flickr.

Open enrollment for the Affordable Care Act, which you might know best as Obamacare, is set to close in less than a month. Early indications are that total enrollment for the 2014-2015 period will exceed what's deemed to be a conservative enrollment estimate set by the Department of Health and Human Services in November prior to the start of open enrollment.

But just because the numbers are coming in better than expected doesn't mean that underlying opinions about the law have changed much, if at all, over the past four-plus years.

According to the Kaiser Family Foundation's Health Tracking Poll, public opinion on Obamacare remains stable -- and by stable, I mean mostly negative. With the exception of three single-month intervals in 2012, the majority or plurality of respondents in KFF's nearly monthly polls have harbored an unfavorable view of the law since the beginning of 2011. In its latest rendering from Dec. 2014, KFF notes that 46% of respondents view Obamacare unfavorably, 41% view it favorably, and 14% either don't know or refused to answer.

Consumers weigh in on Obamacare
However, when KFF asked consumers to weigh in on what the main thing is that Obamacare actually does, or what it means to them, we got a very interesting set of answers. Below are the top five responses consumers chose to describe what the ACA does, along with supportive quotes that they could choose from.

Table by author. Data source: Kaiser Family Foundation.

As you can see by the responses to KFF's December poll, a large plurality of people (41%) believe that the ACA expands access to health insurance. Meanwhile, 8% believe it increases costs, 5% think the plan is designed to decrease costs, and only 7% believe it helps them or other people out.

Why such a gigantic difference between expanding access to health care and every other answer? I suspect the answer lies in the common misconception that Obamacare affects a large percentage of the population.

A common Obamacare misconception
Obamacare is often viewed as a transformative law that's designed to flip the old American health care system on its head. While it is certainly a shake-up of the health care system, its true target is providing insurance options for lower-income individuals, as well as millions of people who are able to pay into the system but simply chose not to in prior years. Obamacare was never expected to enroll 100-plus million working Americans. Instead, its decade-long goal as set forth by the Congressional Budget Office was a net reduction in the number of uninsured by 26 million.

Source: Flickr user Will O'Neill.

I'm not oblivious to the fact that Obamacare does affect all citizens, as the individual mandate requires that everyone purchase health insurance or face a penalty unless they happen to meet one of the nearly one dozen individual mandate exemptions. And of course a major overhaul of the American health care system directly affects taxpayers and can have externalizes that are difficult to predict. However, since most people haven't actually had to change their health insurance game plans (i.e., they're covered by their employer or were purchasing insurance on their own well before Obamacare was rolled out), I'd argue that the direct effect of Obamacare isn't felt by a majority of the U.S. population. For instance, as of week seven of open enrollment, just 7.7 million of the United States' nearly 159 million-person labor force was insured through Obamacare.

I believe this makes public opinions polls on Obamacare extremely tricky to analyze. Without hearing for certain from those directly affected by Obamacare, we can never get a complete picture of how it's affecting citizens. Furthermore, with businesses turning to private exchanges as a more hands-off approach to managing their employees' health care options, the implementation of the employer mandate may not have a big impact on how many additional Americans are directly affected by Obamacare.

Take Aon Hewitt, a subsidiary of Aon (AON -0.92%) as a striking example. In October, Aon announced that its private exchange network was expected to grow by 60% to 1.2 million members by the end of 2015. Last year alone, Aon attracted more than 70 companies to its network, and its current clients include the likes of Sears Holding, Walgreen Boots Alliance (formerly known as Walgreen), and Darden Restaurants. With the perception that these private exchanges will give consumers more control over their health insurance options -- employees are given an annual subsidy which they can use to shop on a private exchange network like Aon Hewitt offers -- and reduce business costs, it's no wonder they're proliferating in this generally negative sentiment environment. 

One thing to remember
Ultimately, whether Obamacare is viewed favorably or unfavorably by the public doesn't really matter to consumers and investors as much as the question of whether having additional payers in the system helps to further control medical cost inflation.

To that end, we still have a lot of hashing out to do. Insurance premium cost inflation was under control in most states this year and has benefited from an increase in the number of insurers offering plans on the marketplace exchanges. However, challenges loom, such as getting the remaining 22 states on board that chose not to expand their Medicaid program, and the upcoming Supreme Court decision on the eligibility of subsidies from the federally run Healthcare.gov. These obstacles stand in Obamacare's path to success, regardless of how people feel about the health care reform law in polls. 

For insurers, the most visibly affected group, it makes them a potentially dangerous investment. Until we have clarity from the Supreme Court and have a few years of data under our belt, we won't be able to claim with any certainty that Obamacare is succeeding in controlling medical care costs.