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Obamacare won’t get 7 million enrollees in 2014 — and that’s okay

"Because has been under repair throughout November, enrollment will likely still lag well behind the pace needed to hit the bottom-line goal of signing up 7 million people by the end of March," reports the National Journal's Sam Baker.

Baker's story, which is about how and whether we'll know when is fixed, is excellent. But I want to complicate the idea that signing up 7 million people by the end of March is really the "bottom-line goal" for Obamacare.

Obama sells Obamacare. But will he get the right people to buy? (Photo by Win McNamee/Getty Images)
Obama sells Obamacare. But will he get the right people to buy? (Win McNamee/Getty Images)

The 7 million number isn't a goal so much as it's an estimate. It comes from the Congressional Budget Office's May 2013 projection of how many people would sign up for insurance under Obamacare. But that projection didn't foresee two months of a non-functional federal health exchange. Or, to put it simply, that estimate is already wrong. It should be thrown out entirely.

Back in July, when Sarah Kliff and I asked the White House how they defined "success" in 2014, they always defined it as a function of the mix of people in the exchanges -- the "ratio" -- rather than the number of people in the exchanges. On this, the administration was clear: More wasn't necessarily better. Twenty million enrollees would be a disaster if only 1 million of them were young and healthy.

It all came down to the ratio. If 7 million people signed up for the exchanges -- as CBO predicted -- the Obama administration believed success meant ensuring about 2.7 million of them were young and healthy. If they got 10 million people to sign up, about 3.9 million had to be young and healthy. If they got 4 million to sign up, success would mean making sure 1.5 million were young and healthy.

The reason the ratio matters so much was that it is crucial to keeping premiums low. The White House always thought it possible that demand in the first year would be underwhelming, and until people actually saw the system was working, many would hang back from the system. But so long as the ratio was right, the premiums will remain low, and so when people eventually come to buy insurance, they can get a good deal, and they'll want to sign up.

Or, to put it differently, success in Obamacare's first year was all about setting up success in Obamacare's second year.

No one will ever look back on Obamacare's launch and call it a success. The question is whether they'll look back and say that Obamacare subsequently became a success. And that's why the bottom-line goal for the White House is still the ratio of people who sign up for 2014 rather than the raw number of who sign up for 2014. The law is in much better shape going into 2015 if it has an actuarially sound pool of 4 million than an actuarially disastrous pool of 9 million.



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Brad Plumer · November 26, 2013

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