Uninsured rate dips 2.7 points

Roughly 5.4 million Americans who previously lacked health insurance have acquired coverage since the state and federal exchanges opened on Oct. 1, according to a new study conducted by the Urban Institute's Health Policy Research Center. The uninsured rate for nonelderly adults dropped to 15.2% in March, down 2.7 percentage points from September, according to the center's survey results.

The researchers found a large gap in the uninsured rate between states that have opted to expand Medicaid to adults with incomes up to 138% of the federal poverty level and those that have not implemented that piece of the Patient Protection and Affordable Care Act. In Medicaid expansion states, 12.4% of adults lacked coverage, compared with 18.1% in non-expansion states. Roughly half the states have opted to pursue the Medicaid expansion.

The Urban Institute study likely underestimates the number of previously uninsured individuals who have obtained coverage since Oct. 1. That's because 80% of the survey was conducted prior to the first week of March and therefore may not fully reflect the surge of enrollments that occurred leading up to the March 31 deadline.

“I think you can view this as a little bit of a lowball,” said Katherine Hempstead, a senior program officer at the Robert Wood Johnson Foundation, which paid for the study. “If we had been in the field at the end of March we would have seen a larger decline.”

ACA supporters are celebrating after last week's announcement by the Obama administration that enrollment had reached the 7.1 million enrollment target, and the number is likely to rise through April 15. But it's certain that some of those people who signed up ultimately will not be enrolled for a variety of reasons. Insurers are saying 10% to 20% of the people who have signed up haven't paid their first premium.

In addition, there will continue to be so-called churn. Researchers at the UC Berkeley Labor Center recently estimated that only about 55% of individuals obtaining coverage through Covered California would remain in an exchange plan for at least a year. Some people will leave their exchange plan because they gained employer-provided coverage or their income dropped and they qualified for Medicaid.

The Urban Institute study is seen as the first credible assessment of how many previously uninsured individuals have gained coverage during the Obamacare open enrollment period for 2014. The Obama administration has not released data on how many of the exchange customers who signed up for private plans were previously uninsured or how many have paid their premiums.

Enrollment will not fully stop with the March 31 open enrollment deadline. That's in part because the federal and state exchanges will allow individuals who started the enrollment process prior to the end of the month an opportunity to complete the process. In addition, individuals who have undergone a “qualifying life event” will still be eligible to sign up for coverage throughout the year. That could include divorce, losing a job, having a child, graduating from college, or having to shift out of Medicaid due to higher income.

Outside of the Obamacare exchanges, eHealth, an online insurance broker, has identified 20 carriers in 14 states that are continuing to sell individual-market plans at least through April 15. Beyond that, insurance experts say it would be risky for any one insurer to continue selling individual plans throughout the year because it could attract people with health problems—while insurers are prohibited by the ACA from checking applicants' health status, limiting benefits, or charging a higher premium. In contrast, during open enrollment, all insurers are equally at risk of signing up sicker enrollees.

“I would certainly urge insurance clients to weigh the risk carefully before choosing to accept people outside open enrollment,” said Hans Leida, an actuary at consultancy Milliman.

There have been other preliminary signs that the uninsured rate has been dropping. A Gallup poll released in February found that the rate had fallen to 16%, down from 17.1 % in the fourth quarter of 2013.

Jonathan Gruber, an economist at Massachusetts Institute of Technology who consulted in crafting the Massachusetts and federal healthcare reform laws, cautions that any assessment of the impact on the uninsured rate at this point is inherently flawed because there are just not enough data available to judge how the healthcare reform law has changed the insurance landscape.

“It's going to take three years for the law really to phase in,” Gruber said. “People need to just calm the heck down.”

—with Harris Meyer

Follow Paul Demko on Twitter: @MHPDemko