The Obamacare Deadline Arrives

Today is March 31. It’s the “Obamacare” deadline that we’ve been hearing about for months, the end of the open enrollment period on the health care exchanges — although the federal government has extended the deadline for a week, to allow people who claim to be in the midst of applying to complete the process.

How is the process going? We know for sure that a lot of money and effort has been spent in encouraging people to apply by the deadline. The federal government has spent millions on TV ads and social media banners, alerting people to the deadline and encouraging people to “get covered.” President Obama himself has led the charge. Over the past few weeks, you couldn’t go to a website or social media outlet without seeing an ad. It’s been, by far, the largest, most visible, and probably most expensive government-sponsored ad campaign in my lifetime. It’s blown the “click it or ticket” and anti-drunk driving campaigns out of the water.

Has the ad campaign worked? According to information provided by the government, enrollments surged as the deadline neared. By mid-March, the government reported that 5 million had enrolled, then 6 million a few days ago. Some people hold out hope that enrollments might hit 7 million. The 7 million figure has some significance, because the Congressional Budget Office initially forecast that 7 million enrollments were needed during the open enrollment period, although the CBO later revised that forecast to 6 million.

It’s not entirely clear what these numbers represent. There are supposed to be 48 million residents in the United States who do not have health insurance; 7 million is only a small fraction of the uninsured whole. What do we do about the remaining millions of uninsured people? Moreover, it’s not clear how many of the people who have enrolled through the exchanges were formerly uninsured, either. Many of the users of the health exchange websites apparently were people who were insured but whose policies were terminated because they lacked mandatory provisions required by the Affordable Care Act. There are also valid questions about how many of the enrollees have actually paid premiums and therefore have coverage.

There will be a lot of information coming our way over the next few days and weeks about Obamacare. The Affordable Care Act is such a hot-button issue — and the impending elections in November will keep it so — that supporters and opponents of the law are sure to massage and select the data to favor their positions. The average voter would do well to apply skepticism to the messaging from both sides of the Obamacare debate.

If you’re someone who bought a new policy through healthcare.gov, the ultimate question about your fellow enrollees is: who are these people, and how sick are they? Insurance fundamentally involves a pooling of risk, and the cost of health insurance is directly tied to who else is in your pool. If you’re in a group with lots of young, healthy people who don’t need much health care, your premiums will be lower than if you’re in a group with a preponderance of sick people who regularly need expensive medical attention. We won’t know the true actuarial makeup of the new plans until the people who are covered begin to make claims, the claims get processed and paid, and the insurance companies look at the results and decide whether the pricing of the plans needs to be adjusted — and if so by how much. If health care costs increase dramatically, few people are going to consider Obamacare a success no matter how many people have enrolled.

It will be nice to see some new ads once the March 31 deadline passes, but everyone needs to take a deep breath. This initial deadline is just one step in a very long process, and we won’t know the outcome until we are much farther down the road.

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