Fewer enrollees could signal the beginning of a death spiral for Obamacare exchanges
(Americans for Tax Reform) – WASHINGTON, D.C. — Between the end of March and the end of June, 29 states plus the District of Columbia lost Obamacare enrollees, based on an Americans for Tax Reform analysis of recently released data from the Centers for Medicare and Medicaid Services (CMS). In total, Obamacare exchanges had a net loss of 238,119 enrollees in the three-month period.
The latest data finds that enrollment across all 50 states and DC sits at 9.9 million as of June 31. This is down from 10.2 million Obamacare enrollees as of March 31.
States that lost the most enrollees include Florida (-101,091), Georgia (-34,925), North Carolina (-32,300), Pennsylvania (-29,487), Texas (-23,194), New Jersey (-14,273), Indiana (-13,268), and Arizona (-10,905).
Twenty states posted increased enrollment numbers, with Massachusetts (32,438) and California (28,908) inching upward. One state, Colorado did not provide CMS with updated data.
In addition, approximately 423,000 individuals on Obamacare in 2015 were not legally enrolled due to failure to produce sufficient documentation proving citizenship or immigration status and were thus removed.
The poor performance of the program is bad news for the long-term sustainability of the federal and state Obamacare exchanges given their reliance on paying enrollees to meet costs. Exchanges typically fund their operations through a fee on premiums: the federal exchange that provides 37 states with coverage charges a 3.5 percent premium, while state exchanges are free to choose their own rate. Fewer enrollees could signal the beginning of a death spiral for the Obamacare exchanges.
The federal exchange, which dropped from 7.3 million enrollees to 7.2 million in the three-month period, can better absorb lost enrollees because costs associated with the exchange are pooled across all 37 states. State exchanges are more precariously placed because they have just a fraction of the customers to pool resources, yet they face similar costs. In total, enrollees on the 14 state exchanges fell from 2.9 million to 2.7 million.
“It all comes down to an economy of scale that just isn’t working,” said Ryan Ellis, tax policy director at ATR.
Below is a list of each state’s net gain or loss of enrollees between March and July.
|State||Net gain/loss of Customers|
*Colorado did not provide CMS with updated enrollment data
**State Exchanges: California, Colorado, Connecticut, DC, Hawaii*, Idaho, Kentucky, Maryland, Massachusetts, Minnesota, New York, Rhode Island, Vermont, and Washington
***Hawaii is transitioning to the federal exchange.
Americans for Tax Reform is a non-partisan coalition of taxpayers and taxpayer groups who oppose all tax increases. For more information, please contact John Kartch at firstname.lastname@example.org or visit the website www.ATR.org.