Off-Exchange Enrollments: New York Times makes an amazing discovery... (Updated)

OK, I don't mean to sound full of myself, and it's a fine article, but it's a bit amusing to see the reporter refer to "politicians and policy makers" as being the only ones who have "largely overlooked" off-exchange enrollments.

Millions of newly insured people are hiding in plain sight.

They are the people who have bought new health insurance since the start of this year but have chosen for one reason or another to bypass the state and federal exchanges that opened last year under the Affordable Care Act. While the exact number is unknown, some health care experts estimate that it may be in the millions.

Politicians and policy makers have focused on the number of people who signed up through the exchanges — at nearly seven million and counting a day after the March 31 deadline — but they have largely overlooked the group that did not use the exchanges, even though it could have a major impact on the program’s financial success in the years ahead.

This leads to the main point of this entry.

There's been a raging debate on a thread from yesterday about why I've subtracted the 3.7 million cancelled non-compliant policies from the "total QHP range" on The Graph, but only 3.7 million, even though "the vast majority" of the (up to) 9 million off-exchange policies were previously insured (according to the same Rand Corp. study which gave the 9M figure in the first place).

I don't have time to read through the entire thread, so someone else may have already explained my reasoning there, but here's the answer:

  • Let's assume that "the vast majority" means perhaps 8 million of those (up to) 9 million (8M insured, 1M uninsured)
  • Let's further assume that, of the 7.1 million exchange-based QHPs, about 4.1 million were previously insured and only 3 million weren't (around 42%...and don't get me started on the "27% McKinsey study" business again; I've already pointed out the problems with using it, and the number of exchange QHPs has nearly doubled since their most recent study was done in early February anyway).
  • That means that out of around 16.1M total QHPs, about 12.1M  were replacing existing policies, either voluntarily or due to cancellation, right?
  • (There's also another 1.5 million NON-QHPs which were "grandfathered" in for an extra year or so due to the HHS extension policy, but those aren't relevant here)

So, we now have a total of around 3.7 million "replaced by force", around 8.4 million replaced voluntarily, and another 4 million newly insured (3M via the exchanges, 1M off-exchange).

Now, maybe the ratio of how many of the cancelled policies were on-exchange vs. off-exchange above is wrong. Maybe instead of 3M on to 1M off, it's actually 2M and 2M.

Here's the thing, though: It doesn't really matter, because every one of those new policies--whether on-exchange or off-exchange; whether it went to someone who didn't have insurance before, someone who had their old policy cancelled or went to someone who voluntarily made the switch to a new one...which, as you can see above, is a LOT of people, by the way...is still a fully ACA-compliant, full-coverage healthcare plan.

THAT'S what I'm listing on "The Graph". Yes, it's important to know what the net reduction in the uninsured population is, and you can get a rough idea of that by working the numbers above...but that was never the main goal of this site. The primary point of this site is to track how many people are now enrolled in a "QHP certified" plan regardless of whether they had insurance before or not. Some moved from no plan at all to a QHP. Others moved from a "junk" policy to a QHP (some have argued that there aren't that many of these, but there were still a lot of them). Still others yet (myself included) have moved from a decent plan to a QHP (which was admittedly a bit irritating, but hardly a devastating shock to the system). The point is, they're all ACA QHPs now.

So, you may be asking, if that's the case, why did I subtract the 3.7M cancelled policies from the range? Simple: Because I promised I would do so.

A couple of weeks ago, in response to a critique of this site, I promised that if and when a reputable source could provide a rough estimate of the total number of off-exchange enrollments (vs. the 570K partial count which I've documented to date), I'd go ahead and subtract the cancelled plan figure from the total.

At the time I pegged this as 4.8 - 5.0M, but remembered later that around 1.5M of these never were actually cancelled...they were reinstated as "grandfathered" extension policies after the HHS Dept. granted a 1-year exception, which has since been extended even further. I was even willing to cut the 1.5M down by a couple hundred thousand, on the basis that this was a high-end estiamte by the CBO.

So, true to my word, I've lopped off 3.7 million from the total QHP total. If I hadn't, then it would be closer to 16.2 million, instead of the 12.45M that I currently have it set to.

Hopefully that clears things up a bit (or perhaps it muddies the water even more).

UPDATE: I was guilty of the very thing that Glenn Kessler scolded others for this morning: I took the 9M figure from the Rand/LA Times story and plugged it in verbatim. As Kessler notes, Rand didn't come out and say that the 9M figure was absolute; they just based it on a survey with percentages. Surveys include margins of error, etc...so it could be only 8M, or perhaps 10M, or maybe a bit higher or lower.

My larger point is still valid, but I did get a bit sloppy there myself.