Often lost amid the controversy about the malfunctioning Obamacare website and the cancelled health plans are the abysmal sign-up numbers for the program’s health-insurance exchanges. Across all the exchanges—those run by the states as well as the federal one—846,000 applications have been submitted since October 1, for a total of 1.5 million people. Out of this number, 396,000 were deemed eligible for Medicaid (whether these people will take the next step and enroll in Medicaid is another matter). After parsing out those ineligible for coverage through the exchanges, about 1 million applicants can purchase health insurance through the exchanges. But to date, only 106,000 (less than 27,000 on the federal exchange) have gone ahead and selected a plan.
Consider this number in context. In its latest projections, the Congressional Budget Office estimated that 7 million people would enroll in Obamacare’s health exchanges in 2014; the current enrollment is about 1.5 percent of that. The administration’s expectation for October 2013 enrollment alone was 500,000. Part of the problem is the law’s subsidy structure, which continues to favor the sick and elderly, rather than the young and healthy, whose participation is essential to stabilizing the risk pool. Moreover, the law’s weak first-year penalty for forgoing coverage makes enrolling a bad bet for many “young invincibles,” who can’t afford to shell out $200 per month for a high-deductible policy. (Penalties get stiffer in years two and three, but without young invincibles in early years, so will premiums.)
The Obama administration has tried to defend the enrollment numbers by comparing them with the early figures for Massachusetts’s Health Connector, the Bay State’s pre-Obamacare insurance exchange, signed into law in 2006 by then-governor Mitt Romney and seen as a model for Obamacare. The administration points out that a mere 123 people enrolled in the Massachusetts exchange during October 2006, its first month of operation. By December 2007, 158,000 people had enrolled. But the participation rate for Romneycare, as some call it, was much more robust than these figures indicate. The administration number only represents premium-paying enrollees; it excludes a huge portion of people converted from the state’s uncompensated care pool, as well as those who weren’t paying premiums because their incomes fell between 100 and 150 percent of the federal poverty line. If one includes these participants, the actual number of Health Connector enrollees was closer to 4,500 in the first month. Plus, the Massachusetts open-enrollment period lasted from October 2006 to July 2007, a much longer period than under Obamacare—meaning that enrollment was likely to have been slower at the outset.
By contrast with Romneycare, the numbers for Obamacare are actually less robust than the numbers indicate. According to John Kingsdale, a managing director of Wakely Consulting who helped oversee the Health Connector’s rollout, the program got about one enrollment per 100 website visits. That ratio sounds small, but it dwarfs Obamacare’s performance so far. With 25 million visits to the website to date, Obamacare’s 106,000 enrollments represent a miniscule conversion rate of just under half of one percentage point.
Even with its lousy management and technical failures, though, Obamacare probably won’t collapse—government programs rarely do that. Just look at “superstars” like Medicaid and the wide-ranging disability-insurance programs. Lesser known but long-lived failures include the World War II-era Raisin Administrative Committee (still going strong today) and Head Start. Government programs can fail completely, but entrenched interests keep them going. When it comes to Obamacare, the small (but vocal) portion of the electorate that stands to get large insurance subsidies will fight to keep the program alive. And states that get additional federal funding under the law’s Medicaid expansion won’t want to give up their newfound cash cow.
Hopefully, in the coming months, Republicans and Democratic reformers will find common ground on reforming the law, as the two parties did for Romneycare in Massachusetts. The Keep Your Health Plan Act, just passed in the House, won’t fix Obamacare’s underlying problems, but Democratic support for the measure shows that the rank and file are ready to take the plunge. Will Republicans seize a bipartisan opportunity to reform the Affordable Care Act?