The Number of Uninsured Is Dropping, but Not Thanks to Obamacare Exchanges

Philip Bump

Two new surveys clearly show that the number of people who lack health insurance in the United States has dropped — but largely not because people have enrolled in Obamacare exchanges.

Gallup's monthly survey of the uninsured, which in February discovered that the number of uninsured had dropped to pre-recession levels, reported on Monday that the rate had dropped further. Only 15.6 percent of Americans lack insurance coverage as of the end of March, down from 17.1 percent at the end of December. The two groups that saw the biggest drops were black Americans and those earning less than $36,000 annually.

What Gallup doesn't dive into is where people are gaining insurance. That's where the new survey from the RAND Corporation comes in.

Interestingly, RAND discovered that the vast majority of new insurance coverage came not from enrollments in the Obamacare exchanges, as you might expect. Instead, it was heavily from expansions of coverage by employers and from the expansion of Medicaid — a component of the Affordable Care Act that about half of the states embraces, and which largely explains the big drop in the number of poor people who lack insurance. About 8.2 million more people have employer-based coverage now versus last September, RAND found, and about 5.9 million more people are enrolled in Medicaid. Sign-ups on the Obamacare exchanges added another 3.9 million.

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The 3.9 million figure for exchange enrollments is far less than the government reported, but that's at least in part because RAND's survey was conducted over the course of March, meaning that the late enrollment surge — some 2 million people signing up in the last two weeks of the month — mostly wasn't included. What's notable about that 3.9 million number, though, is that the majority of those enrollments weren't by people who were previously uninsured. RAND breaks down how people who had insurance in 2013 and lost it in 2014 were previously covered, and how those who were uninsured in 2013 and gained it in 2014 got their coverage.

No one was covered under the exchanges in 2013, of course, explaining why no one lost that coverage. But the big net gains are obviously for employer-based coverage and Medicaid. Only 1.4 million of the 3.9 million people who gained insurance under the exchanges were uninsured last year. If you extrapolate RAND's data out for the full 7 million people the government says enrolled by March 31, some 2.5 million previously uninsured people will have gained insurance thanks to the exchanges. (We'll note at this point that the margin of error on the RAND data is pretty large.)

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What's with that big surge in employer-based coverage? "Some of it could be improvements in the economy, which might have happened regardless of the Affordable Care Act," Kaiser Family Foundation vice president Larry Levitt told Talking Points Memo. Possibly, although the number of new jobs added since last September is only a little over 1 million. Another option, according to Levitt: "people who previously turned down employer coverage signed up to avoid getting penalized." The individual mandate, which kicks in on next year's taxes if you haven't been enrolled for nine months of 2014, spurred the late March push for enrollments on the exchanges. Levitt suggests that it may also have spurred people to sign up for employer coverage they previously ignored.

So is Obamacare a success? It's too early to tell. And, of course, it depends on your definition of "success." If your goal is reducing the number of uninsured, it seems to be on the right track — albeit in ways that might not have been predicted in advance.

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