The Obama administration announced in April that more than 8 million Americans had signed up for health coverage under the Affordable Care Act. Enrollment far exceeded expectations, and the White House declared victory. Debate over the law, President Obama said, “is and should be over.”
But in Texas, the debate is far from over — and that’s a good thing.
The assumption behind the administration’s rhetoric is that most of the 8 million Americans who signed up were previously uninsured. But a closer look at the enrollment data suggests that the vast majority of those who signed up were previously insured, and that millions of uninsured Americans, including millions of Texans, didn’t bother to enroll.
If there were pent-up demand for ACA-style coverage, Texas — the uninsured capital of America — is the one place you’d expect to see it. But we didn’t.
The latest Health Reform Monitoring Survey from Rice University’s Baker Institute for Public Policy estimated that fewer than a third of Texas enrollees — 178,000, or just 3 percent of the state’s uninsured population — reported being uninsured before they signed up for coverage in the ACA marketplace. In a state with 6 million uninsured, that’s a small drop in a very large bucket.
The Department of Health and Human Services has chosen not to gather data on how many Americans who signed up for coverage didn’t have insurance beforehand — the most useful metric by which we could judge the success of the ACA. But there’s good reason to believe that most of the 733,757 Texans who signed up were previously insured.
A recent survey from McKinsey & Company found that three-quarters of Americans who signed up for coverage in the exchange were previously insured, and a RAND Corporation survey in April put the figure at about two-thirds. Presumably, many of these people had their plans canceled because of the ACA, despite the president’s promise that if you like your plan, you can keep it.
Of course, surveys are a limited tool. Because HHS hasn’t said how many enrollees were previously insured, we must parse the available data, which raise the same question as the surveys: Why didn’t more people sign up?
HHS had estimated that 2.2 million uninsured Texans would be eligible for subsidized coverage on the exchange. But only about a third of that total signed up. Even more telling, only 53 percent of Texans who got a close look at ACA plans (and subsidies) actually followed through and signed up. According to HHS, about 1.4 million Texans completed an application on the exchange, which means that more than 637,000 decided not to purchase coverage. Of those, more than 100,000 would have qualified for a subsidy.
Why didn’t they sign up? One reason might be cost. Through its subsidy structure, the ACA creates winners and losers — a hefty subsidy and affordable coverage for the winners; little to no subsidy and expensive premiums for the losers.
For Americans who earn about $30,000 a year or more, federal subsidies are generally not enough to offset the high cost of premiums. The average pre-subsidy ACA premiums in Texas are significantly more expensive than the cheapest premiums offered on the individual market before the ACA. This is especially true for young people, who in Dallas, for example, face an average premium hike of 150 percent for catastrophic coverage on the exchange compared with pre-ACA rates.
The individual policies sold in the exchanges make up a very small slice of the total health insurance market in the U.S. Still, the lack of interest in heavily regulated, government-subsidized plans among the uninsured in Texas is telling.
At the very least, it suggests that the debate over the ACA is not and should not be over — no matter what the White House claims.