With The November Election Six Months Away Obamacare Is Up For Grabs

House Energy and Commerce Committee Republicans seemed surprised last week when representatives of the insurance industry reported that they didn't have enough data yet to forecast prices for next year's health insurance exchanges, the market was not about to blow up, and that so far at least 80% of consumers have paid for the health insurance policies they purchased on the exchanges. The executives also reported there are still serious back-end problems with HealthCare.gov––particularly in being able to reconcile the people the carriers think are covered and the people the government thinks are covered. These are all things that you have read about a number of times on this blog.

The insurance companies are doing their best to make Obamacare work.

Why?

Because if they want to be in the individual and small group markets, Obamacare is the only game in town––it has a monopoly over these markets. The same rules that apply to the individual market also apply to the even larger small group health insurance market.

Unless Obamacare is repealed this is the business reality insurance companies have to deal with. So, you make the best of it.

Republicans are right to think Obamacare is unpopular. The latest Real Clear Politics average of all major polls taken since open-enrollment closed still has 41% of those surveyed favorable to the law and 52% opposed to the law––about as bad it is always been.

But Obamacare is not going to be repealed. The sooner Republicans come to understand that the better for them.

I really think Democrats have the potential to take back, or at least neutralize, the health care issue by the November elections if Republicans aren't careful.

Most voters are still very unhappy about Obamacare. They hate the individual mandate and they find the health plans––with their after subsidy premiums still too high, the deductibles and co-pays way too big, and the narrow networks too confining––unattractive.

But most don't want it repealed, they want it fixed. In the latest Kaiser poll 58% want the law improved and only 35% want it replaced.

But, the Republicans' challenge is that they have painted themselves into a political corner by convincing their base Obamacare has to be repealed––Republicans want the law repealed and replaced by a margin of 62% to 31%. That means any Republican running in a contested primary has to continue the repeal and replace line.

But once in the general election, the tables turn on this argument.

Independents want the law improved by a margin of 56% to 39%. Repeal and replace is a loser issue in the general election.

Looking at what the independents have to say, the Republican repeal and replace strategy could well run into trouble come November IF Democrats are able to convince voters they are the party that understands Obamacare needs fixing and they are the ones to do it.

Obamacare will certainly have to be fixed.

Amid all of the Democratic euphoria over "eight million enrollments" (which are really about 6.5 million enrollments once all of the premiums are finally paid) is the fact that only about a third of those eligible to purchase subsidized health insurance on the exchanges did so.

That means two-thirds did not.

In an earlier post, I recounted the old marketing story about the dog food company that pulled out all of the stops to create the best dog food ever. But the product didn't sell––because the dogs didn't like it.

Obamacare is a product that is a monopoly––you can't buy individual health insurance anywhere else. It is a product that about everyone would agree you are much better off to have than not have. It is a product that the government will pay a big part of most people's cost. And, if you don't buy it the government will fine you.

And only a third of the subsidy eligible signed up?

I will suggest that lost in the celebration over "eight million enrollments" is the fact that two-thirds of the consumers who were eligible for a subsidy didn't buy it. And, according to my travels in the market, about half that did buy it in the insurance exchanges already had insurance.

A just released McKinsey survey done during April estimates that 74% of those who bought coverage inside and outside the insurance exchanges had been previously insured––which would be consistent with my finding.

 Obamacare's two biggest problems come down to this: Not enough people are signing up for it to be sustainable in the long-term because the products it offers are unattractive.

The polls and the market's response to Obamacare are all consistent: The jadwal is not attractive and needs some serious fixing but it isn't going to be repealed.

Republicans can continue to exploit this issue only if they understand this.

And, Democrats can win the issue back, or at least neutralize it, if they can get beyond their current euphoria over "eight million" and get real about how unhappy people are with the jadwal and the plans it offers––and come up with a plan to fix Obamacare.

I feel like I'm watching a football game here. The ball (Obamacare) has been fumbled. It's bouncing down the field up for grabs. The Republicans are saying they don't have to chase the fumble because, "We're are so far ahead we're going to win the game anyway." The Democrats are saying, "What fumble?" They've got "eight million reasons why the ball hasn't been fumbled."

Going into November, Obamacare as a major political issue, is up for grabs.

It's going to be interesting to see which side, if any, gets past its overconfidence by figuring that out and jumps on the ball first.

Obamacare: What About The Working Class And The Middle Class?

The administration issued a report yesterday that says individuals who selected plans in the federal health insurance exchanges have a post-credit premium that is on average 76% less than the full premium for the plans they selected. And, 69% are paying less than $100 after the subsidies––46% are paying $50 or less.

The administration also pointed out that 65% of individuals selecting the Silver Plan in the federal exchange chose the lowest or second-lowest cost Silver Plan.

As I have said before, only about one-in-three subsidy eligible people bought and paid for coverage during Obamacare's first open-enrollment.

It would appear from this data that it is the lowest income people who are most often signing up for coverage. They are the ones who get the biggest premium subsidies as well as the reductions in their deductibles and co-pays.

The Obama administration has been touting the report. The new HHS secretary said, "We're finding that the marketplace is working. Consumers have more choices, and they are paying less for their premiums. Nearly 7 in 10 consumers who signed up in the marketplace are paying $100 or less for that coverage."

That is one way to look at it.

Here is another. The lowest income people––who pay the lowest premiums and out-of-pocket costs––are the ones who are obviously signing up. That explains why the average consumer subsidy is so high and the average net cost is so low.

As I have said on this blog before, the biggest consumer kasus Obamacare has is that the plans––with their still high premiums even after the subsidy, big deductibles, and narrow networks––are not attractive to working class and middleclass families and individuals who don't qualify for the biggest subsidies.

Simply, the Obamacare plans are unattractive to all but the poorest who get the biggest subsidies and the lowest deductibles.

Last week, the CBO said that 87% of the 30 million who they project will still be uninsured in 2016 will not pay an individual mandate fine because of all of the Obamacare hardship exemptions. Obamacare looks to be on its way to creating a chronically uninsured class.

I understand the administration's desire to spin the enrollment results. But if they want to see Obamacare's approval ratings rise above their longstanding abysmal results I suggest they take a hard look at why two out of three subsidy eligible people aren't buying it and work to make these plans more attractive for them.

Earlier posts:
Obamacare: The Uninsured Are Not Signing Up Because the Dogs Don't Like It

The One Thing That Could Save Obamacare––And The Obama Administration Needs To Do It In the Next Month