“That was never our target number. That was a target that came from the Congressional Budget Office, and it has become an accepted number. There’s no magic to the 7 million. What there is magic to is that in the month of December a million Americans signed up for insurance.”
– White House aide Phil Schiliro, interview on MSNBC, Dec. 31, 2013
This column has been updated.
The White House this week crowed about the fact that, as of the end of the year, 2.1 million Americans have signed up for insurance either through the federal health-care exchange or state-run exchanges. The message was that the Affordable Care Act Web site, which had a troubled launch, was turning a corner.
At the same time, the administration has backed away from the idea that it suggested it had a “target” of 7 million enrollees when the enrollment period for 2014 ends in March. As Schiliro put it, “that was never our target number.”
Let’s explore this figure and the administration’s enrollment claims.
The 7 million figure did originate as an estimate (not a target) by the CBO. Before HealthCare.gov launched, senior administration officials certainly embraced the number.
Here’s Health and Human Services Secretary Kathleen Sebelius speaking to reporters last June: “We’re hopeful that 7 million is a realistic target.”
And here she is on Sept. 30, in an interview with NBC News: “I think success looks like at least 7 million people having signed up by the end of March 2014.”
Moreover, on Sept. 5, 2013, Marilyn Tavenner, administrator of the Centers for Medicare and Medicaid Services, sent Sebelius a memo titled, “Projected Monthly Enrollment Targets for Health Insurance Marketplaces in 2014.”
The memo offered an estimate of 7,066,000, drawing both on CBO’s estimate and the experience of the universal health plan in Massachusetts, Medicare Part D “and conversations with employers, issuers and states.” It projected that enrollment would be 3.3 million by the end of December.
The 7 million figure, apparently, became less relevant as “a target” or a measure of success when it became clear that the Web site’s problems were making it difficult for people to sign up.
Instead, officials have argued that a more relevant figure is the mix of young and old people. That’s because younger people tend to be healthier and thus have lower medical expenses; if only older people sign up, premiums would soar.
(To be fair, when Sebelius spoke of 7 million being “a realistic target,” she also made this point: “It’s both about numbers and hopefully getting a balanced risk pool. So a lot of our efforts will be using creative ways to outreach to sort of the young healthy population who is eligible but who may not get up every morning thinking about health insurance.” But the media have tended to emphasize the 7 million figure.)
In one possible good sign, the state of Kentucky announced this week that 40 percent of the 116,000 enrollees in Medicaid or qualified health plans in the state are under 35 years old. Officials are looking for at least 30 percent of enrollees to be under 35.
It’s important to remember that the health-care marketplace is not a single entity, but at least 51 different marketplaces, each with its own risk pool, so it is quite possible some states will do very well while others might end up with an unbalanced mix.
But there is one funny thing about the administration’s enrollment figures: The White House counts “an enrollee” as anyone who has selected a qualified health plan.
“Once someone clicks ‘enroll’ and selects a plan, we consider them enrolled,” a senior White House official said. “We don’t know if they have paid or when they pay the company because it’s a private transaction between the company and the consumer.”
[Update: Administration officials now concede that originally enrollment information was supposed to have been received, but that part of the system has not been completed yet.
“We do not have information on who has paid their premiums now,” one official said. “We will in the future. This is part of the back-end financial management systems that are left to be built. Issuers will be reporting to us on completed enrollments in connection with payments of premium tax and cost-sharing subsidies, but that we don’t yet have that data.”
Under a work-around, insurers were expected to provide numbers by Dec. 27, but since premiums are not due until Jan. 10, any information that has been received is not yet complete.]
Thus it is possible that thousands, or even tens of thousands, of “enrollees,” under the administration’s definition, have not purchased a plan.
Insurance industry officials report that they are still receiving duplicate ID numbers for enrollees, as well as experiencing a continuing problem with so-called “orphans.” These are people who are recorded by HealthCare.gov as having picked an insurer, but the companies have no record of these persons, meaning they cannot be sent a bill or receive an insurance card.
Moreover, CBO’s original estimate of 7 million assumed that people had paid for their plans. Under CBO’s definition, if a person bought coverage that began Jan. 1 and then never got around to paying, then CBO would not count that person as having been covered at all.
So it’s quite likely the administration is even further behind the targets outlined in Tavenner’s memo than is currently apparent. That memo assumed consumers paid their first month’s premium prior to receiving coverage.
The Pinocchio Test
Whether or not the administration originally came up with the 7 million figure, officials certainly embraced it as a target in the months leading up to the implementation of the Affordable Care Act. We agree that the mix of young and old enrollees is perhaps the more relevant number, but it’s a bit odd at this point for the administration to minimize the 7 million figure. Everyone knows enrollment got off to a slow start — and one can safely assume the administration would be bragging if in December it had exceeded the targets in Tavenner’s memo.
Moreover, the administration’s definition of “signing up” is more expansive than what most people would consider as enrolling in a plan. Officials should be more frank in explaining that one reason for selecting this measure is because the system is not yet fully functioning.
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