![Obamacare supporters are greatly inflating estimates of the number of previously uninsured people that have gained coverage because of the new law. Here's sensible look at the numbers. [Credit: CNN/Money]](https://i0.wp.com/www.dougsbriefcase.com/blog/wp-content/uploads/2014/03/Credit-CNN-Money.jpg)
Obamacare supporters are greatly inflating estimates of the number of previously uninsured people that have gained coverage because of the new law. Here’s sensible look at the numbers. [Credit: CNN/Money]
Hyperbole over how many people have presumably gained health coverage as the result of Obamacare won’t subside anytime soon. At its current pace, we seem destined to reach the point where the number of people who are alleged to have gained coverage because of Obamacare surpasses the number that lacked coverage in the first place.
Last month, Senator Richard Durbin (R‑IL) put the number of newly insured at 10 million. This month, advocates are seeking signatures on online petitions to protect 13 million people “who now have health insurance thanks to Obamacare” from the malefic schemes of the Republican party.
In this two-part series, I’ve tried to push past the hype and take a careful look at the data the government have released so far on new enrollments. My previous post examined data on enrollment in private health insurance policies sold through exchanges. This one deals with new Medicaid determinations.
But first, how did we move from the bogus 10 million figure to the even loopier 13 million figure? Easy. After Senator Durbin propounded his 10 million exaggeration, the government released new data on Medicaid determinations through the end of January and also issued a press release updating exchange enrollment through late February. Our on-line petition friends used these new figures, adding the number of people who had selected plans through late February (4 million) to the number of new Medicaid determinations from October 2013 through January 2014 (8.9 million), to arrive at their highly misleading 12.9 million, or “nearly 13 million.”
Before examining the Medicaid numbers more closely, it is important to lay out a few facts about the program. Many think of Medicaid as government insurance for the very poor. That’s only half right. Millions of low-income people have never been eligible for Medicaid coverage because poverty alone wasn’t enough. In addition to being poor, you had to be:
- Old and bereft of assets;
- Under 18;
- A parent of someone under 18;
- Pregnant; or
- Have a severe disability.
With few exceptions in some states, non-aged, non-disabled, childless adults have been shut out of Medicaid no matter how low their income. Obamacare changed that, allowing an individual to qualify for Medicaid based on income alone. It required states to cover everyone earning less than 133 percent of the federal poverty level ($15,521 for an individual; $31,720 for a family of 4), irrespective of their life circumstances. Medicaid became what many people thought it had been all along — government health coverage for the very poor.
The law the President signed mandated that every state expand its Medicaid program. But the Supreme Court found that provision unconstitutional, requiring that states be allowed to decide for themselves whether to expand their programs. As of the beginning of this year, 25 states and the District of Columbia had done so. The rest had not.
While only half the states have expanded Medicaid to new populations, every state operates a Medicaid program. That is a critical difference between exchanges, which opened for business last October, and Medicaid, which has been around for 50 years. People are determined eligible for Medicaid every day in every state – seniors, people with developmental disabilities, pregnant women, children under 18, low-income parents – and there is no way to infer from government reports which people added to the Medicaid rolls are newly eligible thanks to Obamacare and which would have been eligible even if Obamacare had never become law.
The chart below presents the number of people determined eligible for Medicaid by state agencies between October 1 of last year and January 31.
The blue bars show how many of the 8.9 million determinations were made by states that opened their programs to people who were previously ineligible for the program (“expansion states”); the red bars represent determinations by states that retained the old rules (“non-expansion states”).
More than 4.2 million – or 47 percent – of those determined eligible over that period lived in states that did not expand their Medicaid programs. By definition, those 4.2 million people could not have become eligible for Medicaid because of Obamacare.
What about the 4.7 million who live in expansion states? Weren’t they added to the rolls only because of the changes made by Obamacare? No. Most were almost certainly eligible under the old rules. Medicaid is a huge program. Congress’s advisory committee on the program reports that there were more than 63 million enrollees in 2010, including more than 30 million children. All of these groups continue to be eligible today and likely constitute the vast majority of those determined eligible even in expansion states.
That is especially true since Medicaid has a large shadow population, millions of people who are eligible for coverage but have not enrolled. How many is a matter of considerable dispute. But consider this: CBO estimates that even years from now, after Obamacare is fully implemented, more than 6 million Medicaid-eligible people will remain uninsured. It seems likely that some uninsured people who were eligible for Medicaid were motivated to apply for coverage by intensive enrollment campaigns. Though that is a knock-on effect of Obamacare promotional efforts, it is not accurate to say that these individuals gained Medicaid coverage because of the new law.
It should also be borne in mind that many of the “expansion” states were covering adults with incomes of 133 percent of the federal poverty level even before the Obamacare Medicaid expansion took effect this year. As of January 2013, according to the Kaiser Family Foundation, 10 “expansion” states (DC, HI, IL, ME, MA, MN, NJ, NY, RI, and VT) were covering adults with dependent children with incomes of 133 percent of the poverty level, and 3 (DC, HI and VT) had extended coverage to childless adults to that income level. Another 5 (IA, MA, MN, NM, WA) were covering unemployed childless adults above those levels. As a result, many adults determined eligible for Medicaid in those expansion states this year would have qualified for coverage even without the health care law.
Then there is the additional complication that Medicaid data are notoriously faulty and incomplete. CMS bases its figures on state reports, which are spotty and deficient. A number of states have antiquated data systems and most are still in the process of implementing new federal rules for making income eligibility determinations. Some still haven’t reported their January numbers. Others double-count enrollments, since an individual may have more than one eligibility determination. And 13 states don’t distinguish a new eligibility determination from a redetermination – the process by which a state agency decides whether an individual already receiving Medicaid can continue receiving it.
This combination of factors thoroughly discredits the notion that there are 9.3 million fewer uninsured people as the result of Obamacare’s Medicaid expansion. Indeed, it is virtually impossible to determine how many people have gained coverage so far due to this expansion.
The health consultancy Avalere has taken a crack at it, estimating that 1.7 to 2.7 million previously uninsured people living in expansion states had been determined eligible for Medicaid through the end of January. [Avalere estimates that some people living in non-expansion states also had gained coverage due to the law, although officials in some of these states have strongly disputed the estimates.] The Avalere estimates include “those who were previously eligible [for Medicaid] but newly enrolled due to greater awareness of coverage options” [emphasis added]. Such estimates are highly questionable. How, exactly, does one quantify “greater awareness?” In any event, if people were “previously eligible” for Medicaid, Obamacare did not make them eligible for Medicaid. As a result, I would argue that the actual number of previously uninsured people who today have coverage due to the Obamacare Medicaid expansion must fall somewhere below the 1.7 — 2.7 million range, though I think the data are too muddled to say much more than that.
Things should become clearer as the year progresses, but the important thing to bear in mind is how little getting an accurate Medicaid count matters. From the beneficiary perspective, there is no deadline to sign up for Medicaid. Unlike the exchanges, where people must enroll by the end of this month, someone eligible for Medicaid can show up in an emergency room or community health center any day of the year and sign up on the spot. The Medicaid enrollment numbers will continue to mount over time. There is no March 31 cut-off.
From the perspective of insurance companies, the health, age and number of new Medicaid recipients doesn’t matter. Unlike exchange-based insurance coverage, paying claims for a pool comprising unusually old or unhealthy people creates no financial risk. Claims aren’t paid out of premiums, since Medicaid recipients pay no premiums. The cost of their coverage is borne entirely by the government, which will finance their care out of taxes and new debt, no matter the cost.
Indeed, there is really little reason for Obamacare backers to play games with enrollment numbers, whether for Medicaid or private coverage sold through exchanges. CBO expects the law to reduce the number of uninsured by roughly 45% over the next 10 years at a cost of a little more than $2 trillion. But that will take time. Data on the first four months of the first open season suggest that a lot of uninsured people already have obtained coverage. That number will certainly amount to millions over the course of this year and millions more in the years to come.
That it is too soon to know just how many people have so far benefited from the law should not detract from the fact that the number of uninsured people in 2014 will be considerably less than last year’s number and that the 2015 number will likely be lower still.
That is an achievement that requires no exaggeration or hyperbole. The law’s proponents should drop the numbers game and celebrate the fact that the law is reducing the ranks of the uninsured.
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