Early state numbers: People aren't signing up for ObamaCare, they're signing up for Medicaid

David Freddoso was issuing heads-ups about this weeks ago and now here’s Ezra Klein’s Wonkblog saying, yep, heads up. I understand the concern, what I don’t understand is why anyone thinks it’s “unexpected.” It stands to reason that the most voracious demand for expanded insurance would be among the people who can’t qualify for it or can’t afford it, i.e. the sick and the very poor. The latter are signing up and being steered into Medicaid. The former are surely signing up (or trying to sign up) and being steered into ObamaCare, where they’re going to create one hell of an adverse selection problem for insurers unless healthy people get cracking on enrolling en masse.

Long story short: Where are the enrollments from healthy middle-class people on whom so much depends?

The first month of the new health law’s rollout reveals an unexpected pattern in several states: a crush of people applying for an expansion of Medicaid and a trickle of sign-ups for private insurance.

This early imbalance — in some places, nine out of 10 enrollees are in Medicaid — has taken some experts by surprise. The Affordable Care Act, which expanded Medicaid to cover millions of the poorest Americans who couldn’t otherwise afford coverage, envisions a more even split with an expanded, robust private market.

“When we first saw the numbers, everyone’s eyes kind of bugged out,” said Matt Salo, who runs the National Association of Medicaid Directors. “Of the people walking through the door, 90 percent are on Medicaid. We’re thinking, what planet is this happening on?”…

The yawning gap between public and private enrollment is handing Republicans yet another line of criticism against President Obama’s health overhaul — that the law is primarily becoming an expansion of a costly entitlement program.

On top of the differing early demand for Medicaid versus private insurance, it’s easier to sign up for the former. As Wonkblog notes, there’s no choice of plans in Medicaid to dither over and no 404 catastrophe waiting for you online. Since states already have information on their lowest-income citizens are from food-stamp programs, they can either automatically enroll them in Medicaid or do it over the phone. None of this matters terribly if Healthcare.gov can be salvaged quickly and private-insurance purchases start to skyrocket: Granted, taxpayers are on the hook for all of these new Medicaid enrollments, but then they’re also on the hook for ObamaCare subsidies for lower-income people who don’t qualify for Medicaid. What makes this story worth flagging are two things. One: Like Guy Benson says, for all the Democratic blather this week about insurance plans getting canceled under O-Care because they’re “junk,” Medicaid itself is a junk plan. The instantly famous study of Medicaid recipients in Oregon earlier this year — conducted in part by none other than Jon Gruber, one of the architects of ObamaCare — showed that the program did little to improve the health of the poor.

Two: HHS has been, shall we say, imprecise in delineating the proportion of Medicaid applications to ObamaCare applications when talking about the demand for coverage since October 1. They’ve thrown around the number “700,000,” but how many of those are for one program versus the other? This was Freddoso’s whole point in initially flagging this issue. In order to tell if ObamaCare’s on track to form sustainable risk pools, only the number who are applying for private insurance matters — yet HHS has been coy in distinguishing that from the Medicaid applications. That fits a pattern of deception since the exchanges launched on October 1. Here’s Peter Suderman on last night’s report of six — six — total enrollments nationwide on ObamaCare day one:

On October 3, White House spokesperson Jay Carney, pressed for enrollment numbers, said, “No, we don’t have that data.” On October 7, in an appearance on the Daily Show, Health and Human Services Secretary Kathleen Sebelius repeated the claim when questioned about enrollment: “I can’t tell you,” she said, “because I don’t know.”

But that simply wasn’t true—at least not during the first few days…

It’s possible that Carney didn’t have the numbers at the time. And I suppose it’s even possible that, four days later, HHS Secretary Sebelius hadn’t seen the numbers either. But that explanation is not particularly believable, especially in the case of Sebelius, whose is the nation’s top health bureaucrat and is therefore expected to keep informed of such things. And on the vanishingly small chance that it is true that neither Sebelius nor Carney were at all aware of the enrollment numbers themselves, then that reveals that both remained, perhaps by choice, clueless and out of the loop regarding crucial details about Obamacare’s operations.

Bottom line: If only because of the ongoing Medicaid/private insurance sleight of hand, you shouldn’t trust what anyone in the White House says about applications or enrollments until we have the official numbers later this month. To hit their target, they need 494,000+ newbies in the private insurance market alone. Otherwise they’re at risk of an adverse selection problem, which means next year will be worse than it’s already shaping up to be. Via BuzzFeed, here’s OFA’s latest solution to the ambivalence from “young healthies” towards the law so far. Merry Christmas?

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