Unreported Obamacare Data -- Exchange Sales Conversion Is Much Worse When The Taxpayer is Not Subsidizing the Policy
I like digging through the raw data in the Obamacare report rather than just accepting the bits the New York Times wants to report. As a business guy, I was looking at the data from a sales-conversion perspective -- ie, who is buying and who is not? And of course, why?
When I was in the marketing world, we used to call the process of sales conversion the sales funnel. For the exchanges this means some percentage of the available market actually show up at the exchange, and then some percentage of those actually complete the arduous sign-up process, and some percentage of those actually select a policy, and presumably some percentage of those actually pay, though we don't know what that latter percentage is. At each step, we ask ourselves what people are we converting from one step to the next, and why.
Here is the Obamacare exchange sales funnel through December (as has become tradition, it is a scavenger hunt to fill this in and the data locations move around from month to month).
As you can see, of the nearly 3.7 million people who have selected a private plan or been put in Medicaid or CHIP, fully 88% are on the government dole (subsidized or full Medicare).
The interesting new data is on the plan selection breakdown between subsidized and un-subsidized. This leads to an interesting finding that is a bit non-obvious from the report itself because the data is spread all over the report. But lets look at conversion of applicants to plan selection based on whether folks are subsidized or subsidized.
For the 2,383,131 applicants who find they are no going to be subsidized, only 436,603 have selected a plan, for a 18% conversion rate
For the 2,756,667 applicants who find they will get supported by the taxpayer, 1,646,237 selected a plan, far a 60% conversion rate.
In essence, applicants are more than 3 times more likely to sign up if they are getting taxpayer money. The exchanges are not selling health care, they are selling subsidies. People sign up, check to see if they have money coming, and go away if they don't and stay if they do.
The next really interesting piece of data would be the demographics and health status of the 18% who did sign up for an unsubsidized plan. I would not be at all surprised if the demographics there were far, far worse than the average. Emerging hypothesis: People come to the exchange, and sign up if they get a subsidy, or if they have health problems or high risk.
mogden:
I am confident that Top Men are working on this problem.
January 17, 2014, 11:42 amR.C. Chapman:
I understand the ???????. No one seems to want to talk about how many actually follow through. Just as important and totally ignored is how many will pay the first month premium, get counted, then, for what ever reason, drop out? I suspect that many will find each successive premium more difficult to justify from already strapped budgets and many will find that the coverage is not as expected and buyer's remorse will come into play. This applies to those with or without subsidy, but obviously the severity of the problem will be related to the size of the subsidy and overall cost.
So another conclusion I draw is not only are the healthy and young without subsidies the most likely group to fail to pay, they are also the most likely group to drop out early in the plan. The second group is the healthy and the least likely group to fail to pay and who will try to remain in the plan is the sick and subsidized.
The lack of demographic information tied to health and the lack of any verification of who has paid lend credence to this conclusion. If the information was good, we would be hearing about it loud and clear.
January 17, 2014, 12:16 pm.
IMHO this "roaring success" is not anywhere near as solid as some seem to think and perhaps even less solid than even us doubters realize.
STW:
What I don't understand is why anyone who knows their income is too high for a subsidy even looks at the exchange. We have to buy new insurance because of Obamacare but since I can do math I know that our combined income (no children) is too high for a subsidy. We applied elsewhere and are waiting to hear back (5 weeks). Even though Obamacare forced me to get new insurance our purchase will never show up in the statistics. Then again, my SSN or bank information won't show up in a Ukrainian database either.
January 17, 2014, 12:25 pmaczarnowski:
I'm surprised by the unsubsidized rate. It was pretty clear early on the only reason to get close to the Sisyphean suck of the exchanges was because there was a chance of a subsidy. There are more plans in the private market, you can talk to actual person, and you can actually know you've actually bought them.
The 18% conversion feels like people who thought they'd get paid who turned out to be in the 49% of people getting screwed by this monstrosity. Once they've already pushed the ball up the hill they're hedging before the damn rock comes tumbling back down on them.
January 17, 2014, 12:28 pmCraig:
I read somewhere it's skew toward women and older, of women single women more than married women
January 17, 2014, 1:28 pmrst1317:
Note that we don't know how many of those people actually end up with coverage. A large portion of them may not be getting coverage that way.
I also wouldn't underestimate how much people wait until the last minute and just want to hurry up and get it done. They don't care about making the best choice, just about doing something.
January 17, 2014, 1:52 pmmesaeconoguy:
Thanks for the raw data link (provided it actually is the data).
I, too, enjoy a good romp thru the weeds, but in this case, I fear that effort is wasted, because this deal was sealed last year.
January 17, 2014, 5:33 pmFelineCannonball:
shopping around?
January 19, 2014, 12:42 ammarque2:
Because in all probability you were given insurance that was the same as that offered by the exchange. In many states insurance companies not part of the exchange are not allowed to offer separate insurance. This somehow is suppose to keep costs down.
January 19, 2014, 12:55 pmmarque2:
The private market doesn't really exist any more. Buying on the private market is the same as buying from the exchange. In fact in several states - if you were not selected to offer plans on the exchange - you are banned from offering any new insurance policies. In CA as an example 33 competed for the exchange. 13 won places and the rest are banned from new business until 2017. The 20 that lost also had to cancel about half their existing plans. Somehow restricting company competition is suppose to reduce cost and reduce prices.
January 19, 2014, 1:00 pmMatthew Slyfield:
"13 won places and the rest are banned from new business until 2017."
That would actually be an increase in insurance competition in most states. I don't have a cite handy, but I recall reading during the PPACA debate before the law was passed that if you exclude companies that self insure there are only 5 or 6 health insurance companies in most states.
January 19, 2014, 9:45 pmmarque2:
Right - but it cut 60% of the insurers out of CA.
Most states with insurance problems had them caused by legislators mandating every procedure under the sun and restricting how insurance companies can be compensated. And then they wonder why there are so few in the state.
January 20, 2014, 8:44 amMatthew Slyfield:
No, you are wrong. The 5 or 6 insurance carriers in most states is a result of the insurers having to be licensed at the state level and the state only licenses that many. The states are deliberately restricting insurance competition.
January 20, 2014, 9:55 amrst1317:
"Buying on the private market is the same as buying from the exchange."
No it is not the same. There are differences.
January 20, 2014, 3:23 pmmarque2:
Yeah - like you don't automatically qualify for the subsidy. Seriously - Obamacare has destroyed the whole market. Unless you own a private business that self insures - you are going to purchase an Obamacare plan. Look at the name of the plan you purchased privately - can almost guarantee it matches the name of the plan on the Obamacare site for your state.
Even aggravators don't shop for you any more.Check out ehealthcare.com for instance. They used to shop insurance for you. Now all they have are Obama plans and the company has been reduced to being "exchange helpers" paid to help folk fill out the exchange pages.
Sorry guy - you have been really duped.
January 21, 2014, 9:03 amCharles Clarke:
This is rather late, but a possible explanation for the 'unsubsidized' portion.
In Colorado, which has its own exchange - so it may not be fully comparable, you needed to apply for Medicare - and wait 2-4 weeks for them to get back to you - to have the subsidy during the year. If you knew you weren't eligible for Medicare but could get a subsidy, you could apply for insurance on the exchange, not take the subsidy through the year, but take it on your tax return. So these folks would appear as buying on the exchange, but not taking the subsidy, even though they really will at tax time. At least that is my understanding. Until I see the tax forms, I have little evidence. After all, we'll know what is in Obamacare after Obama has modified it X million times.
December 13, 2014, 9:10 am