McKinsey and Company has published a new report about the Affordable Care Act. It's getting attention, but not entirely for the right reasons.
The report attempts to address a few different questions—among them, how Obamacare is affecting the uninsured. Research from organizations like Gallup, Rand, and the Urban Institute have made it clear that the proportion of Americans without coverage is coming down. But they don't show by how much. McKinsey has bene taking surveys of its own and, according to this new report, only about a quarter of the people getting coverage through the new marketplaces were previously uninsured. That’s a pretty low number and it would seem to suggest the law isn't having such a big impact. “The upshot of that figure was that of the people shopping for coverage on their own who had actually enrolled in a new plan in 2014, the vast majority had been previously insured,” as Avik Roy wrote in Forbes. “Another way to say that is that for all of the talk about 7-million this and 8-million that, the Obamacare exchanges’ expansion of coverage to the uninsured was far smaller.”
The second part of that quote makes a valid point that, presumably, few people grasp. Of the 8.1 million Americans signing up for insurance in the new marketplaces, many would have had coverage anyway. But, even with the information that McKinsey has provided, it's difficult to know how many people fall into that category—or how that really reflects on the law's overall performance.
For one thing, the survey includes people buying on the marketplaces as well as those buying directly from insurers. As the bloggers Charles Gaba and Andrew Sprung have pointed out several times, those factors could skew the numbers (or interpretations thereof) by quite a lot. Another issue is that, in the absence of the Affordable Care Act, some people who had insurance last year would have lost it this year—just as some people who lacked coverage last year would have gotten this year. The market as a whole is very fluid, with people switching between employer coverage and individual coverage and back again. Adjusting for those variables is tough. Then there's the problem common to so many of these surveys. People don’t always use the same definition of “previously uninsured” or have precise recollections of their recent past. Keep in mind, too, that lots of people are getting insurance through other sources, like Medicaid, through which enrollment will increase over the course of the year.
Truth is, it's going to be a while before we have a good sense of just how deeply Obamacare is reducing the ranks of the uninsured. I know—it's very frustrating! But the McKinsey report had one other finding that, as Sprung points out, ought to start some discussion right now.
About half of the people who McKinsey surveyed did not end up buying insurance—either because they shopped and found nothing they liked, or because they didn't shop at all. When asked to explain these decisions, the majority of these people said they thought coverage would cost too much. But two-thirds of these people said they didn’t know they could get financial assistance. In other words, they assumed they would have to pay the sticker price for coverage, even though federal tax credits would have lowered the price by hundreds or thousands of dollars a year.
With a little education and outreach, many of these people will discover that insurance costs less than they thought. When next year's open enrollment period begins, they are more likely to get coverage. But the idea was to help more of those people this year. And if the administration deserves some blame for this shortfall, its adversaries deserve more. Republicans and their allies did their best to taint the law—and, where possible, to undermine efforts to promote it. Without such obstruction, even more uninsured people would probably be getting coverage right now. As Sprung quipped in his post, “Those who deliberately spread disinformation about the ACA and actively encouraged the uninsured to remain in that blessed state of freedom can be really proud of themselves.”