The Obama Administration is counting on as many as 7 million Americans, including 2.7 million young people, to enroll in health insurance coverage on the state and federal ObamaCare exchanges. Based on early numbers, however, it appears that they’ll fall far short of that number, which could put the heart of the law is very real jeopardy.
Millward Brown Digital (formerly known as Compete), a company that tracks web traffic, broke down the numbers from the first week the ObamaCare health insurance exchanges were online. Based on the traffic and reports of successful enrollees, they note that just 1% of people who visited the exchange websites actually enrolled.
“Over the course of Obamacare’s first week, 9.5 million people visited healthcare.gov, the federal government’s official healthcare website and the de facto exchange for residents of two thirds of the states,” wrote Matt Pace at the company’s blog. “In addition, the 16 operational state-run exchanges combined to attract over 3.1 million visitors during the same period.”
“In total, 11.3 million consumers visited the federal and state exchanges during their first week of operation,” he explained. “Unfortunately, what started as a fire hose of interest, resulted in only a small trickle of actual healthcare enrollments.”
Pace noted that 27% of those who visited the site, some 214,000 people, were able to register an account, but the actual enrollment numbers are, well, pathetic.
“In the end, just 36,000 consumers, or 1% of all those who attempted to register for the federal exchange, successfully enrolled in Obamacare,” wrote Pace, noting that website wasn’t ready for the heavy traffic that the site receive, which he equated to the “daily traffic on Target.com.”
Poor coding and design as well as a decision to put income verification at the start of the enrollment process, thus allowing potential enrollees to see subsidy eligibility so they wouldn’t be scared off by rate shock, were other reasons the federal ObamaCare exchange website experienced problems.
Here’s a chart provided by Millward Brown Digital which shows the madness:
Jim Geraghty explained yesterday that the bleak enrollment numbers means that ObamaCare is on pace to get 828,000 enrollments by the time the open enrollment period ends on March 31, 2014. The Obama Administration anticipated 494,620 enrollments by the end of October, the first month the exchanges were open. Let that sink in for a moment.
“According to the Kaiser Family Foundation, ‘Over 47 million nonelderly Americans were uninsured in 2012,’” noted Geraghty. “So the exchanges are on pace to get 1.7 percent of the uninsured with completed enrollment for insurance.”
But the 828,000 enrollments, per Geraghty’s math, are key to the argument of ObamaCare is an unworkable law. That number is 6.12 million short of the enrollments needed to make ObamaCare “work,” depending on your definition of that word in relation to the law.
If the numbers don’t increase at a substantial pace, it could lead to what some insurance experts call a “death spiral,” insurance rates would necessarily skyrocket for those who have coverage on the individual health insurance market, which is something The Economist recently noted.
“Obamacare’s main goal is to expand access to cheap insurance. It offers subsidies to those who cannot afford it and bars insurers from charging people more because they are sick,” the magazine explained. “The sick who lack insurance will probably keep trying to enroll. The young and healthy may give up more quickly, if it is too difficult.”
“And if they do, the insurance firms that offer policies via the exchanges will find that their pool of customers is disproportionately sick and costly to cover,” the magazine continued. “This may spur them to raise prices for everyone, making the young and healthy even less likely to enroll, despite the small fines they would have to pay if they lack insurance.”
“A death spiral could follow,” they added.
Counting on the individual mandate to get people to sign-up for health insurance coverage may not be enough to sway the uninsured or those who’ve been shifted to the exchanges. Remember, many Americans aren’t going to be eligible for subsidies because they make too much money and some will be discouraged from paying for a policy that is substantially more expensive than pre-ObamaCare rates, whether the decision is personal finance or buying something they don’t think they need.
It’s too early to say with any certainty that this will happen. Enrollments could pick-up the pace and the Obama Administration could reach their goals. But the early numbers indicate that ObamaCare is going to implode.