HealthSource RI Numbers in Perspective

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I was tempted to label Felice Freyer’s article on the latest results for HealthSource RI enrollment as spin:

More than 92,000 Rhode Islanders signed up for health coverage under the Affordable Care Act by Monday’s deadline, according to the latest data from HealthSource RI.

That figure includes nearly 28,000 people who selected a private health-insurance plan and a surprising 64,590 who enrolled in Medicaid. Both figures exceed projections.

Even the Obama administration, which has proven willing to lie in the service of the Affordable Care Act (“keep your doctor,” and all that), hasn’t presumed to include Medicaid as part of its totals for enrollment. (The number is arguably wrong, in any event, because as Freyer notes, around 34.5% of the Medicaid enrollees were eligible under the pre-ObamaCare rules.)

However, I’ve rethought how I’d characterize the article based on something Freyer wrote in a Tweet responding to my initial expressions of surprise:

The goal was to reduce the number of uninsured, so totals matter.

Freyer appears to adopt the inside-the-government advocates’ view that the Affordable Care Act, generally, and HealthSource RI, specifically, represent steps toward a goal, rather than an overall program to be evaluated.  That’s the narrative theme of her reportage.  The quest of the story, and the question to be answered is: Can the Rhode Island and federal governments eliminate the uninsured problem.

Enrollment

From that perspective, the size of the blob in the following chart is great news, and the fact that the green area (representing paying customers) is so small is merely another challenge along the way.

 

Without any challenge, Freyer lets RI Secretary of Health and Human Services Steven Costantino get away with waving away the future cost of this massive surge of government dependents as something that cannot be predicted, right now, and proceed as follows:

“I’m pleased that the expansion went so well and it just proved that our outreach efforts and really our ability to make a dent in the uninsured has been very successful,” Costantino said. “This will be adding $500 million into the Rhode Island health-care economy.”

So, the goal isn’t to have a cost-saving healthcare system or even just to get people covered, but to get people covered in a way that costs state and federal taxpayers half a billion dollars, because that floods the government’s budget.

Projections

The statement that the numbers “exceed projections” is misleading, too.

To make the case, Freyer uses an unofficial number that the U.S. Centers for Medicaid and Medicare appears to have proclaimed at some point after the federal government botched its roll-outs and initial numbers were weak.  It doesn’t take much skepticism to see it as a low-balled low bar published for the political purpose of giving the exchange a very easy target to hit.  In that regard, it’s not unlike a youth-league soccer coach saying that his team exceeded his projections by scoring two goals, instead of one, after the opposing team scored 10 in the first five minutes.

The reality is that the team was supposed to win the game, meaning that ObamaCare and HealthSource RI were supposed to offer expanded options at lower cost to paying customers, while adding minimally to the cost of free Medicaid.  In Rhode Island, the Medicaid expansion was adopted by bureaucrats with no public debate, and Governor Chafee created the exchange by executive order because he seemed confident that it would never cost the taxpayers anything.

The reason he was so confident, we can assume, was that he was looking at projections that showed the program’s being wildly more popular than it’s been.  The following chart shows the projections the state government was making for different categories of paying customers before the exchange was created and again before it went live, as compared with the actual results as of March 31 of this year.  As you can see, the results are a fraction of the projections, not “exceeding” them.

The total 2011 projection was seven times the actual results so far; the projected number of people paying full cost was 10 times the results.  In other words, as the governor was deciding to overstep the legislature and implement a health benefits exchange by executive order, the state was projecting that more people would be paying the full cost of their plans than have actually signed up for any plans at all.

Meanwhile, the total 2013 projections were three times more than the results, with full-cost customers’ being larger by six times.

As for Medicaid, the 2011 projections predicted that the 163,000 counted on Medicaid would become 219,000.  However, by last year, that projection had been dropped to 175,000, meaning an increase of just 12,000.  The actual result as of March 31st is therefore five times larger than that projection.

Based on our Twitter conversation, it does not appear that Freyer was aware of these projections, but they are massively important if the question to be answered is how well the program is performing by the standards that persuaded Rhode Island to adopt it (meaning, naturally, the people with the power to impose it on the rest of us).

Demographics

There’s another important point to make about Freyer’s coverage:

Among the 28,000 buying private insurance through the exchange, 28 percent are ages 18 through 34, the critical “young invincible” demographic needed to balance the costlier older people. That’s up from the previous month when this group made up 25 percent.

To be sure, that sounds like a positive development.  The problem is that, according to the Kaiser Family Foundation, what the insurance pool needs is for people in this range to make up 40% of enrollees, otherwise the costs paid out are likely to be greater than the premiums paid in.  The imbalance is exacerbated by the fact that more women than men signed up, and the law requires them to be charged the same rates, even though women are more expensive to insure.

All that money will have to come from somewhere.

By the way, one wonders how many “young invincibles” went to HealthSource RI to sign up and discovered that they were eligible for ObamaCare’s Medicaid expansion, which Rhode Island bureaucrats adopted with scarcely a thought.  So, instead of forming the backbone of the for-pay system, they constitute an expense for taxpayers.

In Summary: Costs

Between the fact that HealthSource can’t support itself, the reality that many more Rhode Islanders have been lured to Medicaid, and the realization that the demographics are way out of whack, the elected and appointed officials who jumped right into ObamaCare with both feet set us up for a budget bust that could be as dramatic as the annual deficits already projected and the anticipated loss of gambling revenue when Massachusetts casinos open their doors.

That’s the significant narrative here.  That’s the massive scandal worthy of newsprint.  Instead, Rhode Islanders and their elected representatives are being set up by bureaucrats and a complicit news media to be blindsided by a reality that’s even more harsh than the one we’re experiencing… or even projecting.



  • Mike

    It is east to insure the uninsured…just give then insurance and bill the workers. Not so easy, perhaps, to give the care, as doctors can't make ends meet with what Medicare will pay. Time to demonize those selfish doctors that undergo 8 to 14 years of school and hundreds of thousands of debt to serve a public that thinks it deserves something for nothing….

  • MoniqueAR

    Wow. Great work, Justin.

    These numbers are eye-popping. I literally laughed out loud at the first graph. Only in gov't can you a.) have such a discrepancy between projections and reality and b.) still proclaim it a success.

  • Does that include the aggregate population of Mexica, Guatamala, El Salvador, Puerto Rico, and the Dominican Republic? Obama counted the population of Kenya in his ACA total.

  • “This will be adding $500 million into the Rhode Island health-care economy.” This is the same point made about restoring unemployment benefits to the long-term unemployed who lost benefits. Unfortunately, our elected officials or top administrator never count the money has to come from somewhere and there are offsetting lost "multiplier" effects from those who pay.

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