Exchange enrollment tops 4.2 million through February, but pace slackens

Nearly 950,000 Americans selected a health insurance plan through the state and federal exchanges in February. That brought the total to 4.2 million with one month left in the open enrollment period.

Enrollments decreased by just over 200,000—or 18%—from January, when more than 1.1 million individuals enrolled in commercial plans.

But federal officials expressed optimism that there will be another surge as the March 31 deadline for enrollment approaches. Most people who don't have coverage at that point will face a fine of $95 or 1% of their income, whichever is greater.

In 2006, the Obama administration noted, more than 1 million individuals signed up for plans in the final week of the initial enrollment period for the Medicare prescription drug program. In addition, nearly a quarter of federal employees who opted to change their health benefits in 2012 did so during the last two days of the enrollment period.

Jack Hoadley, a professor at Georgetown University's Health Policy Institute who has scrutinized enrollment patterns for the Medicare prescription drug program, echoes the optimism of administration officials. In particular, he believes that younger people are likely to wait until near the end of the enrollment period to sign up for coverage.

“They're the patterns that we expected,” Hoadley said. “It continues to be a challenge to do this whole enrollment in what is still a very politically charged atmosphere.”

HHS Secretary Kathleen Sebelius pointed to a Gallup survey released Monday that showed the percentage of uninsured individuals decreasing from 17.1% to 15.9%, the lowest level since 2008, as evidence that the Patient Protection and Affordable Care Act is making a difference.

“This wasn't a coincidence or something that just happened on its own,” Sebelius said. “Given what we know about past enrollment patterns for healthcare, we expect that even more will sign up as we approach the March 31 deadline.”

Just over 60% of enrollments—or 2.6 million—were processed through the federal exchange. The rest were through the marketplaces run by 14 states and the District of Columbia.

The Congressional Budget Office originally projected that 7 million Americans would sign up for private plans during the initial enrollment period. Last month, that estimate was reduced to 6 million owing in part to technology problems that initially plagued the federal exchange and continuing problems with some state-based marketplaces. In order to meet that projection, enrollments would need to nearly double from February's pace.

As with past reports from the CMS, the enrollment data comes with some significant caveats. It includes everyone who has signed up for a plan, regardless of whether they followed through with their first premium payment. That means a significant chunk of enrollees—most estimates are in the neighborhood of 15% to 20 %—haven't paid and therefore aren't actually covered.

It's also uncertain how many previously lacked coverage. A study released last week by the McKinsey Center for U.S. Health System Reform estimated that 27% of those who signed up for plans through mid-February were previously uninsured. That was up from 11% in a previous McKinsey study.

A quarter of the enrollees so far are between 18 and 34 years old. That's unchanged from February and remains well below the 33% to 40% level that most experts believe will be necessary to create a balanced, sustainable risk pool.

Republicans seized on that as fresh evidence that the law is unworkable. “The administration won't tell us how many people have actually paid for a plan or how many were previously uninsured,” Brendan Buck, a spokesman for House Speaker John Boehner, said in a statement. “But what we do know is that young adults—those who the White House repeatedly said are critical—are deciding the healthcare law is a bad deal.”

The vast majority of individuals signing up for coverage, 83%, are eligible for federal subsidies. In addition, silver plans, which are designed to cover 70% of medical expenses, are by far the most popular products, with more than 60% of enrollees choosing such coverage. Bronze plans, which cover 60% of healthcare costs, were the choice of 18% of exchange customers, the second most popular category.

Just over half of the enrollments through state-based exchanges were California residents. Some state exchanges—Maryland, Massachusetts and Oregon, in particular—continue to be plagued by technological problems and remain far away from reaching enrollment goals.

Follow Paul Demko on Twitter: @MHpdemko