Inside Healthcare Reform’s Initial Numbers
& Top 10 Healthcare Reform Misconceptions

Now that the initial open enrollment period for the Affordable Care Act’s individual mandate has ended we can review the early numbers, consider what worked, what needs to be fixed and what’s next. There is an enormous amount of misinformation about the new law on countless topics but, keeping in line with this posting’s numerical theme, we are pleased to share a Top 10 Reform Misconceptions list with you today in the form of a new newsletter that appears to the right or can be obtained by clicking here.

Our view has long been that the law is here to stay and that there are many positive provisions in it that benefit consumers. That said, it’s anyone’s guess how the law will evolve in the years ahead, whether it will be successful long term or what it will either cost to subsidize or do to actually control rising care costs. For a peek into what’s happened, thus far, with our nation’s ever evolving, new healthcare law here are some numbers that are useful to consider:

14 & 36: 14 states (California, New York, Massachusetts, etc.) created and operate their own medical insurance marketplace with funding to do so from the Federal Government. The other 36 states (Florida included) use the Marketplace known as healthcare.gov that the Federal Government created and operates. Last week the Department of Health and Human Services announced that, in light of the many well publicized problems it has had (and still has) with its website and much else, it is seeking a private contractor to run the Federal Marketplace.

48,000,000: As of 2013 there were an estimated 48,000,000 Americans in our Country that had no health insurance. One theory of the new law was that by adding more insured people into the system, folks who have insurance that can pay their medical bills, then we would all see doctors and hospitals stabilize or reduce their rates and not need to make up for treating so many people without insurance and, thus, having those who are insured make up the difference. Time will tell if more people being insured and, thus having insurance to pay for their care, will have any noticeable impact on the seemingly ever rising cost of that care as our nation continues to age, as ultra-costly technology continues to do remarkable things to repair humans and as new wiz-bang drugs produce medical marvels while making the firms that make them some of the most profitable businesses on the planet.

8,005,702: In recent weeks the White House has announced that more than 8,000,000 Americans appear to have obtained coverage between October 2013 and April 2014. Based on a May 1st report from the Department of Health & Human Services here is how the total breaks down by age.

Age Range # Enrolled % of Total Enrolled
Age < 18 497,522 6%
Age 18-25 869,476 11%
Age 26-34 1,379,467 17%
Age 35-44 1,371,645 17%
Age 45-54 1,814,837 23%
Age 55-64 2,036,251 25%
Age ≥65 36,504 0%
Total 8,005,702 100%

Source: ASPE Office of Health Policy, May 1, 2014, Characteristics of Marketplace Plan Selection By Gender, Age, Metal Level & Financial Assistance, Page 18

67%: Last Wednesday the House of Representatives Energy & Commerce Committee released a report that suggests that only 67% of new policy holders that signed up for coverage during the recent open enrollment have paid their first premium for their new coverage. The White House countered by suggesting the figure is much higher and that it’s premature to determine whether people have paid or not paid for their new insurance. Politics aside, insurers are reporting that about 80% to 90% of applicants have paid their premium. Some suggest that given a surge in applicants in the weeks prior to the open enrollment closing in April, that some folks have simply not been billed or had time to pay. What the final totals will be remain to be seen, but work to help people pay, such as CVS recently announcing that the pharmacy chain will accept payment for insurer’s premiums for some insurance companies, and other steps should help.

80%: Speaking of bills, insurers and the government have reported in recent months that 80% of the healthcare reform related systems that are needed to bill and administer new policies, the so called ‘back office’ functions beyond obtaining quotes and applying, have not yet been be built. The initial focus by the government and insurers was the Marketplace system to allow for quotes and applications and, while one would think that having had three years from the time the law passed until its’ systems needed to operate would have been sufficient, the fact is that the work continues and likely will for some time to come.

13.4%: According to a new Gallup poll, the percentage of uninsured American adults has decreased to 13.4% as of April 2014, a drastic improvement as compared to a peak of 17.1% in December 2013. Experts believe that the Great Recession impacted these percentages between 2008, when the figure was 14.4%, and last December’s 17.1% result, and that the Affordable Care Act’s individual mandate law that began in January 2014.

19%: Also according to Gallop, the percentage of uninsured Americans as of April 2014 is estimated at; 19% for 18 to 25 years of age, 24.5% for 26 to 34 years of age, 13.2% for 35 to 64 years of age and 2.2% for Americans 65 years old and older. Insurers and others have expressed concern over whether enough young people have or will enroll in coverage to help offset the claims that older people inventibly have.

28% & 66%: According to its May 1st 2014 Summary Enrollment Report, the Department of Health and Human Services announced that about 8,000,000 people enrolled for coverage between October 2013 and April 2014. Of this total 2,248,943 or some 28% were 18 to 34 year olds and 66% were ages 35 and older. The other 6% were children ages 0 to 17. Nationally 54% of all applicants were female and 46% were male.

82% & 86%: 82% of all applicants written within the 14 states that run their own medical insurance Marketplace received a tax credit subsidy from the Federal Government based on their income and other factors. 86% of applicants written within the 36 states that use the Federal Marketplace qualified for a Federal subsidy. In total, 6,670,458 of all applicants (85%) obtained coverage with the help of a subsidy.

17%, 69%, 9%, 4% & 2%: Of the individual ‘metal’ plans (Bronze being the most basic and Platinum the broadest) applicants sought, here are the Federal enrollment figures as of May 1st for plans written in the 36 states the Federal Marketplace operates (Florida included):

Metal Plan # Enrolled % of All Applications
Bronze 939,195 17%
Silver 3,755,589 69%
Gold 464,831 9%
Age 35-44 1,371,645 17%
Platinum 216,779 4%

Source: ASPE Office of Health Policy, May 1, 2014, Characteristics of Marketplace Plan Selection By Gender, Age, Metal Level & Financial Assistance, Page 21

I could go on with more initial figures but will suffice it to say that a social – industrial effort as large as the Affordable Care Act will take years to be completed and even then will likely evolve for a very long time. These are truly transitional times in healthcare and while it remains to be seen if any of this can help stabilize and even reduce the cost of care, the true problem our nation faces, what we know is that there is much work ahead. Rules clarifying the new law continue to arrive and more are expected throughout this year. Core programs, such as the SHOP plan for small businesses and the large employer ‘mandate’ that were postponed and are expected to launch in 2015 remain in question, as even this week there is rampant talk about further delays in one or both programs.

Stay tuned to morrisandreynolds.com for all of the key details and stay in close contact to your professional agents and underwriters here at Morris & Reynolds Insurance. We will do our very best to guide you in the right direction, to keep you informed of the latest important news and to assist you for many, many years to come.

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