The enrollment numbers are trickling in, and by all accounts, they’re not looking good. First round figures show just under 27,000 have enrolled in health plans for 2014 using the federal HealthCare.gov and another 79,000 through state-based marketplaces. These numbers lag far behind the oft-quoted 16 million first-year enrollment figure from the Congressional Budget Office (CBO).
What this number is: the CBO’s best guess at what would actually happen in the first year and the number driving the CBO’s cost estimates of the law. What this number is not: a magic number determining the success or failure of the Affordable Care Act (ACA). Having said that, high enrollment in the marketplaces is, in fact, necessary for a successful ACA not only from a political perspective but, perhaps more importantly, from an economic one.
Nearly all of the reforms in the ACA are built upon the fundamental principle that makes any insurance work: broadening the pool of risk. The bigger and more diverse (i.e. a good mix of age, gender, and health status) the pool, the more affordable for everyone. This is why individual coverage today can be costly or even impossible for those with pre-existing conditions but bargain-basement for young, healthy people. With marketplace enrollment figures low, the pools remain small. As long as this remains true, plans could become ever-more expensive, making that tax penalty more attractive for the younger, healthier individuals. Ultimately, this could push prices higher, likely drive some plans out of business, and undermine the very goals of the law.
Time will tell if a projected uptick in registrants towards the end of the open enrollment period (March 31, 2014) will improve the risk pool. These are unprecedented times in our nation’s history!