EXCLUSIVE: Washington State: 184K Direct QHPs drop from sky, instantly kill "5M cancelled!" attack

Sometimes it really is that simple.

For months I've been trying to hunt down the ever-mysterious "Off-Exchange" private QHP enrollment data...people who have purchased new, ACA-compliant healthcare policies since October 1st, but have done so directly via the various insurance companies. These are, for the most part (at least in the states which haven't granted a 1-year extension of non-compliant policies) the same (or very similar) policies as those sold via the exchanges; the enrollment process simply bypasses the exchange websites, that's all. There are several reasons why people do this; the most obvious is if their taxable income is too high to qualify for an ACA subsidy. Why go through the hassle (on some exchange sites, not others) of jumping through the extra hoops of the Exchange process if you're certain that you aren't going to qualify for a tax credit anyway? In other cases, the insurance company itself may have made some sort of special offer for enrolling directly (or, in some unfortunate cases, they may have pretended that it was a better deal or not even mentioned the exchange as an option).

In any event, this data is difficult to hunt down because unlike the Exchange enrollments, the insurance companies are under no legal obligation to make it public (at least I don't think they are...possibly in their quarterly SEC filings or something?) Until today, I only had hard numbers from 2 companies: WellPoint, whose CEO revealed last month that about 19% of their enrollees since October 1st have been signed up directly. I don't have a more recent update on this, and he didn't break those numbers out by the half-dozen or so states that WellPoint operates in, but that's still 95,000 people. In addition, one other company, a Co-Op that operates in Iowa and Nebraska, cheerfully provided a full breakdown of their enrollments. Add these together and you have about 124,000 people...until today.

Today, I get to add an additional 184,317 people to the "Off-Exchange" column in one shot, thanks to this press release from the Washington State Office of the Insurance Commissioner, which I stumbled upon thanks to the repost on a small Washington newspaper's website, the Wahkiakum County Eagle:

OLYMPIA, Wash. – Washington state’s individual health insurance market – both inside and outside Washington Healthplanfinder (Exchange) – is expected to expand to more than 300,000 people by March 31, 2014, according to information reported by health insurers to the Office of the Insurance Commissioner and figures provided by Washington Healthplanfinder.

“The individual health insurance market has always been one of the most vulnerable markets in our state,” said Insurance Commissioner Mike Kreidler. “This was especially true before the Affordable Care Act. These numbers show that enrollment is working—and not just for Apple Health. People who buy their own health insurance, either with or without a subsidy, are getting covered.”

Enrollment in the individual market: 

  • 84,287: People enrolled in Qualified Health Plans inside the Exchange (as of Feb. 6, 2014)
  • 184,317: People enrolled in individual health plans outside of the Exchange (as of Jan. 31, 2014)
  • 31,400: Projected new enrollees both inside and outside the Exchange for Feb. and March 2014
  • 300,004: Project enrollees in individual market (inside and outside Exchange) by March 31, 2014
  • 85,372: People who have completed Exchange applications, but haven’t paid yet (as of Feb. 6, 2014)

I've double-checked with the Washington Health Exchange representative to make sure I'm reading this correctly, and there's even a handy chart accompanying the original press release that includes the 184K and specifically labels it as "NEW ACA Enrollments on the Individual Market".

In short, it counts.

This is important news for two reasons: First, it instantly raises the "Off-Exchange" number from 124K to over 308K (oh, and that was only as of 1/31; it could be considerably higher now...the PR suggests perhaps 20K more direct enrollments will show up by 3/31).

More significantly, however, compare the off-exchange enrollments with WA's exchange-based ones: Almost 2.2x as many people.

Think about this for a minute. IF Washington State is in any way representative of the rest of the country--and I have no idea whether it is or not--that suggests that the total number of "Off-Exchange"/Direct enrollments in ACA-compliant healthcare policies could be as high as 7.7 Million nationally (up to 2.2x the 3.5 million exchange-based enrollments reported to date).

Oh, and Washington State decided not to allow extensions of non-qualifying plans, so this isn't a bunch of "junk plans" being stretched out for a year.

Now, I seriously doubt it's that high; I never imagined it would be any higher than 2-3 million or so, possibly equalling the exchange-based number at most. Regardless, we're definitely talking about at least a few million people.

And no, unfortunately these enrollments don't count towards the CBO's "7 Million" (now "6 Million") projected exchange-based enrollment figure.

HOWEVER, it does go a LONG way towards (and possibly completely) negating the "OMG!! 5 MILLION POLICIES CANCELLED!!!" attack point.

Yes, that's right--millions of ACA-non-compliant policies were cancelled...and have simply been replaced, judging by the evidence, with millions of ACA-compliant policies...many (most?) of which were done directly via the insurance companies themselves.

In short, it looks like we can finally stick a fork in the "5M Cancelled!!" meme; it's done.