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CBS News Warns Obamacare Medicaid Enrollment Proceeding as Planned

October 26, 2013

To be sure, the launch of the Affordable Care Act's new insurance marketplaces has been plagued by a variety of problems. But in its Friday segment titled "Medicaid enrollment spike a threat to Obamacare structure?" CBS News highlighted an issue that isn't a problem at all. While several states have been very successful in their early outreach to low-income Americans who qualify for coverage under the ACA's expansion of Medicaid, the experience with the launches of the Medicare drug program and Massachusetts reform law shows that enrollment with private insurers proceeds slowly. And as it turns out, that's exactly what the Congressional Budget Office forecast.

Nevertheless, just 25 days after the opening of the Obamacare exchanges Jan Crawford of CBS News warned, "Industry sources say that if we do not see some real turnaround soon, there could be big problems for the entire system."

The disastrous rollout of may have another serious problem: A CBS News analysis shows that in many of the 15 state-based health insurance exchanges more people are enrolling in Medicaid rather than buying private health insurance. And if that trend continues, there's concern there won't be enough healthy people buying health insurance for the system to work...
CBS News has confirmed that in Washington, of the more than 35,000 people newly enrolled, 87 percent signed up for Medicaid. In Kentucky, out of 26,000 new enrollments, 82 percent are in Medicaid. And in New York, of 37,000 enrollments, Medicaid accounts for 64 percent. And there are similar stories across the country in nearly half of the states that run their own exchanges.

Crawford should have read the CBO's projections before sounding the alarm bell. In its May forecast, the agency estimated that by the end of 2014, 9 million more Americans would sign up for Medicaid or SCHIP (the State Children's Health Insurance Program) compared to only 7 million who purchased insurance through the exchanges. A year later, the trend will reverse, as the number buying insurance policies is expected to grow by six million to a total of 13 million while Medicaid/SCHIP inches up to 12 million. By 2023, 24 million people are projected to buy private insurance compared to the 13 million added to the government's Medicaid program.
As Jonathan Cohn pointed out in the New Republic, Romneycare's history in Masschusetts suggests that "early enrollment--it's supposed to be slow." After one month, the number of new premium paying subscribers in Massachusetts Commonwealth Care plans was 123. After two months, the total was 2.239. Only after 11 months (that is, as the deadline for avoiding the individual mandate's penalties approach) did the number reach 36,167.
That pattern, made worse by the continuing glitches with the web site, explains the slow pace of new premium paying customers at the 34 state Obamacare exchanges run by the federal government. Meanwhile, California's "Bridge to Reform" program kicked off three years has already sign up 600,000 of the 1.4 people predicted to enroll in Medicaid. Oregon quickly added 56,000 as well, cutting the ranks of the uninsured there by 10 percent in two weeks. The Oregonian explained how the Kitzhaber administration did it:

Since late September the Oregon Health Authority sent out notices to 260,000 people already enrolled in the state's food stamps program since late October.
The notices informed them that based on their income reported to the Supplemental Nutrition Assistance Program, they are pre-qualified for the Oregon Health Plan in 2014. Most of them are newly eligible thanks to the state's decision to expand the program's income caps under the federal Patient Protection and Affordable Care Act.

Regardless, it is still early in the process. To put the ACA's rollout in perspective, President Bush's Medicare prescription drug program for 43 million American seniors experienced similar growing pains:

Roughly 1 million Part D enrollees had been enlisted in late 2005, a month before coverage initiated on Jan. 1, 2006. That's less than 10% of the 10.4 million participants that signed up for the program between Nov. 15, 2005 and the end of the enrollment period on May 15, 2006.

So, a little more than three weeks after the start of Obamacare open enrollment, Americans should not be worried that the newly Medicaid eligible are signing up as predicted. In her segment, Jan Crawford of CBS gave the game away, reporting that "the numbers are causing concern in the insurance industry, which needs healthy adults to buy private insurance in large numbers for the system to work." The recent record of reforms in Massachusetts and with Medicare suggests the insurance industry will be just fine.


Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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