Jackson Jambalaya

Health care industry expert Bob Laszewski points out only 11% of those purchasing insurance under Obamacare were uninsured.  He asked in an earlier post ""But what if most of the uninsured literally don't buy Obamacare?"

The (Wall Street) Journal reports that "insurers, brokers, and consultants estimate at least two-thirds" of the 2.2 million people who have so far signed up in the new exchanges are coming from those who already had coverage.

This is consistent with anecdotal reports from insurers I have talked to that are seeing very little net growth in their overall individual and small group markets as of January 1.

That's even worse than I thought it would be even considering the January 1 individual policy cancellations and small group renewals that are driving employers to reconsider offering coverage––and that is saying something. The vast majority of the individual cancellations, particularly because of the early renewal and extension programs, are yet to come. The same can be said for the small group renewals.

This also tells us why the first three months of the Obamacare enrollment had a relatively high average age––they came from the same market that tended to skew older that the health plans already covered.

When McKinsey asked why subsidy eligible people weren't buying, 52% cited affordability as the reason. Readers of this blog will know that I'm not shocked to hear that given what I have been writing about the high after-tax premiums, net of the subsidies, people are finding, as well as the high deductibles and narrow provider networks the subsidized Silver and lowest cost Bronze exchange plans are offering people....

 At Michigan's Priority Health about 25% of their new exchange customers came over from employer coverage and 50% from the individual market––leaving only 25% to come from the ranks of the uninsured.

I will suggest that the significant number of the new enrollees coming over from discontinued employer coverage should be troubling to Democrats. While low paid workers might fare better in the exchanges, many of those eligible for federal subsidies, particularly in two-income families, will fare far worse compared to the plan their employer offered them. Creating a circumstance that forces people to lose their employer coverage is not going to be a political win.

The WSJ also reported that Michigan insurers expected a total of 400,000 new exchange enrollments out of the 1.2 million uninsured but so far have signed-up only 76,000 people, "many of whom were previously insured."

If this keeps up there won't be a "death spiral." Heck, so far the insurers are just re-enrolling their old customers at higher rates!

In addition, many of the 2.2 million exchange enrollees have not yet paid their premiums. The carriers I talked to at the end of last week report that anywhere from a low of 70% to a high of 85% of new enrollees have paid so far. Some of the health plans have closed their books on January and some are willing to take premium until the end of the month. It would appear there will be an overall 10% to 20% final attrition rate due to non-payment of premium.

However, many finally pay, so far it is clear that the uninsured just aren't buying Obamacare. Rest of post