Sarah Kliff, another Obamacare supporter, estimates that health reform has enabled about 5 million people to become newly insured. But thats only about 10 percent of the uninsured. What happened to the mandate that required that everyone have health insurance this year or face a fine? Turns out that the mandate doesnt actually apply to millions of people. In fact, the Congressional Budget Office estimates that 90 percent of the uninsured are exempt from the mandate.
Certain exemptions are written into the law itself. For example, the mandate doesnt apply to American Indians, to people who have religious objections, or to people who earn too little to be required to file an income tax return. But as I wrote at Forbes the other day:
... the administration has piled on with 14 ways people can avoid the fine based on hardships. These include homelessness, domestic violence, being evicted from a residence, having a utility cut off, property damage from a fire or flood, and even a canceled insurance plan. Also, people can avoid the penalty if a close family member has died recently or if they have medical expenses resulting in substantial debt.
It gets worse. Many of the people who signed up didnt pay their first premium. Of those who did, many have stopped paying. For example, Aetna is estimating that by the end of this year they will have lost about 30 percent of their initial enrollees. There is a report of similar attrition out of Florida, which has apparently lost one-fourth of its initial enrollees already. The administration, which has access to national numbers, has refused to release any information on such buyers remorse since May.
Underlying all this is the fact that millions of newly insured people didnt understand what they were buying, even though their premiums are being heavily subsidized. As Lena Sun, writing in the Washington Post, reported:
"Nonprofit organizations across the country are being swamped by consumers with questions. Many are low-income, have never had insurance and have little knowledge of the health-care system. The rampant confusion poses a potential hurdle for the success of the health law: If many Americans dont understand how health insurance works, that could hurt their ability to use their benefits or to keep their coverage altogether."
Health insurance guru Robert Laszewski puts it this way:
"So what youve got is an insurance industry that did not do a good job in gearing up for a population that has never had health insurance before, an Obama administration that did a horrible job on the back end, resulting in a flood of calls to insurer call centers, and a population that is low-income and is not health-insurance literate. Put those things in a bag and youve got a problem."
So if Obamacare is failing miserably at insuring the uninsured, what difference does it make? Even though the health insurance mandate is affecting very few of the uninsured, it is having a major effect on people who are insured.
Up to 80 percent of the people who had individual insurance last year will lose their coverage by the time all the Obamacare rules completely set in. Up to 90 percent of the plans that cover people at work will lose their grandfathered status. In many of these cases, people are being forced to buy richer and more expensive plans with more coverage than they want or need. In other cases, they may lose insurance altogether.