The White House Is Optimistic About Its Limited Obamacare Goals

40 million people are uninsured, but next year is all about getting 2.7 million 18-35-year-olds into the state-based insurance exchanges.
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Only half the nation's governors have signed onto the Medicaid expansion under the Affordable Care Act and the bill's employer mandate has been delayed for a year, but the White House remains confident about its ability to make the state-based insurance exchanges that are a central part of the Obamacare roll-out a success.

In this, its optimism is reminiscent of that of the Obama reelection campaign during the late summer and fall of 2012, when the people running the microtargeting and ground operations expressed assurance about their efforts even in the face of polls that raised doubts about the president's prospects. That's not too surprising, as the White House team conducting the roll-out in conjunction with the Department of Health and Human Services involves pollster David Simas, the former director of opinion research for the president's reelection campaign and since earlier this year a top communications and strategy aide in the White House. He is now operating with similar Census-tract-by-Census-tract targeting care to figure out how to find and sell insurance to uninsured 18-to-35-year-olds who want coverage and are eligible for subsidies under the new law, which goes into effect on January 1.

The exchanges, or Health Insurance Marketplaces, are regulated, competitive regional markets that offer a range of plans that meet certain baseline standards, into which people will be funneled through a central website and application form. The key to getting them up and going is enrolling enough healthy people between 18 and 35 to make the risk pools work and keep rates competitive for the older, sicker people who will be drawn to the new insurance options. Insurers need young healthy people in the pool to keep rates lower for everyone; if only older, sicker people buy insurance at the outset, the calculus behind expanding health-care coverage through a private-sector market falls apart, because rates won't stay low enough for ACA subsidies to help low- to low-middle-income people afford insurance long term.

Here's how the White House expects this to go, according to a recent briefing by Simas and conversations with other White House officials. All numbers are from a PowerPoint developed by Simas, unless otherwise specified.

* The vast majority of Americans already have health insurance, primarily through their employers.

* But there are 15.4 people in the individual insurance market, and there are 40 million people who are uninsured.

* These are the people who presumably would be open to turning to the health-insurance exchanges to seek either better options for insurance, or novel insurance options.

* The first year enrollment target for the exchanges nationwide is 7 million, to be enrolled between October 1 of this year and the end of March 2014.

* For the marketplaces to work, 2.7 million of those 7 million applicants have to be between 18 and 35.

Of the uninsured between 18 and 35, 57 percent are male, and 43 percent are female. Almost all -- 96 percent of them -- have no chronic conditions (compared only half of those between 55 and 64). Slightly over half of them are minorities -- 52 percent -- and 48 percent are white.

Of those between 18 and 34 who don't have insurance, cost is the main reason preventing them from having it, stymieing 52 percent, according to June's Kaiser Health Tracking Poll. Only 17 percent of the uninsured in this group say they simply chose not to get insurance.

A third of the uninsured have to be enrolled in just three states -- California, Florida, and Texas -- to hit the national number targets, but the risk pools have to be balanced internally in every state, since these are state-based markets. For the purposes of building the risk pools, it doesn't matter whether or not a state has accepted or refused the ACA's Medicaid expansion, because there are enough uninsured people eligible for insurance subsidies -- the tax credits provided for by the law -- that even without the Medicaid expansion, the numbers can be met if about 20 to 25 percent of the cohort of uninsured, credit-eligible 18-to-35-year-olds can be signed up for the exchanges. (There are 19 million uninsured between the ages of 18 and 34, according to the advocacy group Young Invincibles, about 9 million of whom are likely subsidy-eligible.) The exchanges will be open in every state and the District of Columbia.

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Garance Franke-Ruta is a former senior editor covering national politics at The Atlantic.

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