According to a report from reputable consulting firm McKinsey & Co. , only 11% of those purchasing health insurance in the individual health insurance market were previously uninsured. Although the report, discussed at length in a Wall Street Journal article, is the most extreme to date in examining whether the Affordable Care Act is, as promised, significantly reducing the number of uninsured or simply substituting one form of insurance for another, it is roughly in line with other surveys conducted recently. Michigan-based Priority Health reported that only 25% of its more than 1,000 enrollees surveyed in plans that comply with the law were previously uninsured. Health Markets Inc., an insurance agency that enrolled around 7,500 people in exchange plans, said 65% of its enrollees had prior coverage with, presumably, the remaining 35% uninsured.
The figures from McKinsey, coupled with the other survey data, are crucial to any evaluation of the success of the Affordable Care Act. Its proponents like to brag that 10 million people have gained insurance as a result of the ACA. As has already been pointed out by many, (see here and here) that figure is a grotesque exaggeration. But hitherto it had been assumed that at least a substantial portion of the individual Exchange purchasers were coming from the ranks of the uninsured. If the McKinsey report, which was based on a survey of over 4000 purchasers, holds up, it further reduces the number of people who have been helped in the most significant way by the ACA.
It is not enough that a few people have indeed been helped by the ACA. Billions of dollars of overhead have been spent on getting the individual Exchanges up and running. Millions of people have been made to worry that their insurance coverage — imperfect as it may be — will be lost. Most likely, millions of individuals have already lost health insurance coverage as a result of the ACA. And, as I have discussed, millions of people dependent on small business as the source of their health insurance are likely to be further alarmed as those policies start to renew later this year. Many of them may lose advantageous coverage too. There are many ways to improve people’s health with billions of dollars. If the upside of Title I of the ACA — the part containing the elaborate individual Exchange mechanism is mostly a substitution of expensive ACA coverage — which, yes, has some additional benefits — for less expensive forms of coverage, then it those provisions are, to that extent, not making the sort of material improvement in people’s health that would constitute the only real justification for the expenditures.
The more modest ACA proponents (such as Jonathan Gruber on occasion) have admitted that there will be losers as a result of the individual Exchange mechanism. They have contended, however, that there will be a far larger number of winners. And ACA proponents have been quick to point to the 2.1 million (at last count) of enrollees in the individual Exchanges as amongst those winners. If, however, 70-90% of those enrollees aren’t genuine winners but merely people cutting their losses, that is a very disturbing fact that must be given considerable attention in future debates over this landmark program.
Now, the McKinsey estimate is just that, only an estimate. Perhaps they have an axe to grind. I don’t know. And, doubtless, we will see more work in this field in the months to come. But it is hard to believe a reputable consulting company would fib or err by 30 or 40% on a statistic of this importance and that was bound to get a lot of publicity. Of all the things I have read, however, in the past month about the ACA, the fact that enrollment in the Exchanges may not even come close to equating with reductions in the number of uninsured is the most disturbing.