Image source: Healthcare.gov.
Statistics by themselves rarely astound anyone. For example, 80 yards probably doesn't mean much to you. However, if you heard someone kicked an 80-yard field goal, that would be impressive. (It happened, by the way, last year when University of Texas kicker Nick Rose booted an 80-yarder in practice.) Context is key.
What's true for football is also true for public policy. Numbers and figures provided without the appropriate frame of reference can be meaningless, but taken in context can be stunning. Here are five Obamacare stats that will blow you away -- when you understand their background.
1.) 13 million
This figure is the estimated number of Americans that the U.S. Congressional Budget Office (CBO) projects will be covered under health plans bought on federal and state Obamacare exchanges by the end of 2016. What's surprising about the 13 million estimate is how far short it is of prior projections. The CBO previously estimated that 21 million Americans would be signed up for Obamacare health insurance in 2016.
And the Obama administration is even more pessimistic. In October, Health and Human Services Secretary Sylvia Mathews Burwell stated that the number of enrollees would likely be closer to 10 million. These estimates are particularly shocking because analysts had predicted that 2016 would be a huge year for Obamacare enrollment.
Several factors are behind the large shortfall. Fewer employers than expected have dropped health benefits for workers. More individuals are staying on their older policies. Perhaps most importantly, the remaining uninsured Americans are simply proving more difficult to reach than anyone expected.
2.) $4,308
The CBO estimates that approximately $56 billion will be spent in 2016 on Obamacare subsidies. That translates to roughly $4,308 in subsidies per enrollee (counting all projected enrollees). While that figure might not seem too high at first glance, consider what the CBO has projected in the past.
Back in 2010, it estimated that the cost for Obamacare subsidies in 2016 would be $59 billion. Remember, though, that the agency also projected the number of enrollees would be 21 million. The CBO, therefore, expected an average of $2,810 in subsidies per enrollee.
Why are average subsidies more than 53% greater than predicted? The lower number of enrollees than expected is perhaps the biggest factor. Another likely reason for the higher average subsidies is the income levels of enrollees. The CBO seems to have expected that more Americans with the financial ability to pay larger portions of their monthly health insurance premiums would sign up for Obamacare plans.
3.) $2.5 billion
This amount is how much less the federal government's risk corridors program will pay health insurers for 2014 than they expected. The goal for the risk corridors program was to insulate health insurers from much of the financial risks from covering less healthy enrollees in the first three years of Obamacare. It's now questionable as to how much insulation health insurers will really receive.
In October, the Centers for Medicare and Medicaid Services (CMS) announced that insurers will pay $362 million into the risk corridors program. Under the risk corridors program, insurers whose premiums are greater than claims and other costs by a specified level pay into the program. Insurers whose premiums are less than claims by a specified level receive payments for the shortfall. The problem is that those less lucky insurers have claims totaling $2.87 billion. CMS is only reimbursing the $362 million paid in by the other insurers -- 12.6% of the requested amount.
How will CMS make up the difference? The agency says that it will use 2015 and possibly 2016 collections to help pay the 2014 gap. Unfortunately for health insurers who participated in Obamacare, that might not be enough -- and could lead to insurers quitting Obamacare.
The nation's largest health insurer, UnitedHealth Group (UNH +0.10%), lost $475 million on Obamacare plans last year. UnitedHealth expects to lose another $500 million in 2016, for combined losses of nearly $1 billion. As a result, the company has warned that it could ultimately pull out of the Obamacare exchanges altogether.
UnitedHealth isn't the only insurer thinking along those lines. Recently, Brad Wilson, the CEO of Blue Cross and Blue Shield of North Carolina, announced that his company could also withdraw from the state's Obamacare exchange in 2017. Even though the insurer raised rates by an average of 32.5% this year, Wilson said his company was still losing money on Obamacare plans.
Aetna (AET +0.00%) CEO Mark Bertolini also recently stated that he has "serious concerns" about whether the Obamacare exchanges are sustainable. Aetna reported losses on its Obamacare plans in 2015 -- although not nearly as large as UnitedHealth's losses. However, Bertolini still believes that it's "too early to give up."
While UnitedHealth Group seems ready to bail out on the Obamacare exchanges, Aetna prefers that changes be made. Aetna CFO Shawn Guertin stated that "it's premature to declare victory or defeat" with respect to the Affordable Care Act. Guertin stressed, though, that changes are needed to make the risk pool stable.
4.) 7.1 million
Congress put tax penalties into Obamacare as a means to encourage enrollment. However, the Kaiser Family Foundation estimates that 7.1 million Americans would actually pay less in penalties in 2016 than they would by buying insurance on the Obamacare exchanges.
In 2014, 7.5 million individuals paid tax penalties instead of purchasing health insurance -- a higher number than expected by the Internal Revenue Service. These Americans kicked in a whopping $1.5 billion in "individual shared responsibility payments."
Financial penalties have increased from the greater of 1% of income or $95 per adult in 2014 to the greater of 2.5% of income or $695 per adult in 2016. Despite this jump, it seems likely that many Americans will still view health insurance as not affordable enough to buy and instead opt to pay the tax penalties.
5.) 30 million
This last figure is the estimated number of Americans who still don't have health insurance, according to Dr. Benjamin Sommers, assistant professor of health policy and economics at the Harvard T.H. Chan School of Public Health. In a paper published in The New England Journal of Medicine, Dr. Sommers stated that the number of uninsured Americans could be as high as 34 million.
Other research suggests even higher numbers of uninsured individuals. The National Health Interview Survey conducted in 2014 found that 36 million Americans didn't have health insurance.
Why are so many still without insurance with Obamacare in place? One factor is that around 5 million uninsured individuals are undocumented residents and don't qualify for Obamacare coverage.
Probably the biggest reason of all, though, was referenced in the previous statistic: Despite some successes with the Affordable Care Act, health insurance is still not affordable enough for millions of Americans.
