Obamacare Enrollment Is Half of Initial Projections, Triple the Price

Health care think tank says subsidies have driven up costs but not plan participation.

A. Michael Khoury stands outside of his Leading Insurance Agency, which offers plans under the Affordable Care Act (also known as Obamacare) in Miami, Fla., on Jan. 28, 2021. Joe Raedle/Getty Images

President Joe Biden has boasted that enrollment in health insurance through the Affordable Care Act (ACA) is at record highs. But according to a report issued by Paragon Health Institute, the enrollment numbers alone don’t tell the whole story.

“Enrollment is way below expectations, and the average cost is three times what was projected,” Brian Blase, president of Paragon Health Institute, told The Epoch Times.

“The ACA is not working as intended.”

The Biden administration didn’t respond to emails seeking comment.

In a statement issued on Jan. 25, the president said that 16.3 million people had obtained insurance through HealthCare.gov and state-based insurance marketplaces under the ACA from Nov. 1, 2022, through Jan. 15, 2023.

“This is more than double the number of Americans who signed up for coverage during the first Affordable Care Act Open Enrollment in 2014,” the statement reads.

It says the 30 states that use HealthCare.gov for their insurance marketplaces are reporting a 50 percent increase in enrollment since January 2021.

The statement goes on to state that many new enrollees are paying $10 or less for coverage each month.

“We’ve made record-breaking progress in expanding coverage and lowering health care costs for American families,” the statement reads.

President Joe Biden discusses health care costs and access to affordable health care during an event in Virginia Beach, Va., on Feb. 28, 2023. Leah Millis/Reuters

However, experts say the Biden administration neglects to mention the expanded subsidies paid to insurance companies to keep those premiums low.

They say expanded subsidies and tax credits have increased the price that taxpayers are paying per enrollee.

“Enrollment is not really an effective measure,” Greg Fann, one of the study’s authors, told The Epoch Times.

“We should be looking at what the enrollment is relative to expectations. That’s not materialized.”

Mr. Fann is a consulting actuary at Axene Health Partners. He co-authored the study with Daniel Cruz, an actuary and co-founder of Presidio HealthCare.

A report from Paragon Health Institute, “Shortcomings of the ACA Exchanges: Far Less Enrollment at a Much Higher Cost,” outlines the issue and states that the expanded subsidies are set to expire in 2025. The report says that this gives Congress time to find ways to make the system more efficient.

Under the ACA’s rules, people can’t pay more than a certain percentage of their household income on health insurance. That percentage is determined by factors such as the person’s age, health, and income. Taxpayers make up any shortfall in the premium.

“We are spending significant taxpayer dollars,” Mr. Fann said.

CBO Expected 40 Million Sign-Ups

In 2013, the Congressional Budget Office (CBO) projected that 40 million Americans would enroll in health plans through the ACA by 2021.

The CBO projected an average cost to taxpayers of $6,850 for each new individual market enrollee and $10,538 for private insurance customers. The Paragon report found the actual costs to be $20,739 and $36,798, respectively.

The report shows that only about 21 million enrolled by 2021, even after premium subsidies were expanded and rules were rewritten to allow more people to qualify for Medicaid.

According to a new CBO report, if nothing changes, the trend of increasing subsidies will continue.

The CBO projects that annual federal health care subsidies will grow from $1.8 trillion—or 7 percent of gross domestic product (GDP) in 2023—to $3.3 trillion, or 8.3 percent of GDP, in 2033.

Total subsidies over those 10 years are expected to be at least $25 trillion.

A national insurance trade group is predicting that costs will continue to rise.

A paper published by AHIP, formerly known as American Health Insurance Providers, says several factors will affect the cost of insurance in the coming year.

“Looking ahead to 2024, the combined impact of increasing provider costs, hospital and provider consolidation, prescription drug costs and health care utilization—alongside major policy changes—are the main drivers influencing individual market rates which are expected to increase,” the AHIP paper reads.

President Barack Obama signs the health care insurance reform legislation during a ceremony in the East Room of the White House on March 23, 2010. Saul Loeb/AFP/Getty Images

The paper also points out that Congress recently approved expanded taxpayer-funded premium tax credits through 2025.

AHIP didn’t respond to an email seeking comment.

According to the Paragon report, the current program has attracted the older, frailer, and less healthy by artificially lowering insurance costs with subsidies.

With an open enrollment period set to begin in November, Paragon officials expect the problem to be exacerbated.

Mr. Blase said now is the time for Congress to begin looking at ways to make the program more efficient.

The report concludes that with more than a decade of information available, this is a good time for government officials to evaluate the program and consider changes.

These include determining who enrolls through the ACA exchanges and who opts for private insurance, employer-offered group plans, and other programs. They should also consider providing options outside of the ACA.

Mr. Blase said the main objective is to find better ways to spend tax money rather than sending it directly to insurance companies.

“The worst thing Congress could do would be to extend the expanded subsidies,” he said.