The Mysterious Surge of Higher-Income Obamacare Enrollees

Only 40 percent of those getting cleared to sign up through the exchanges so far are eligible for subsidies, far short of the 90 percent predicted.

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Buried in a Kaiser Health News report about the latest Obamacare enrollment numbers is a curious fact that helps explain why we've heard so many complaints about the high costs of insurance plans on the new insurance exchanges. It seems an unexpectedly large number of people with higher incomes are exploring enrollment, which means they're not getting the federal subsidies President Obama has touted.

The site also allows people to almost instantaneously determine if they are eligible for Medicaid, the state-federal health insurance program for the poor, or federal subsidies to buy private health plans. So far, only about 40 percent of the 2.3 million people found eligible to shop in the exchanges have qualified for subsidies—far lower than the 90 percent projected in the first year by the Congressional Budget Office. Federal officials said Tuesday night they could not explain the discrepancy.

That's a pretty significant variation from how things were expected to go, but it would make a lot of sense if what we're seeing in the early batch of enrollment attempts is not a flood of uninsured people, but rather solidly middle-class people whose private-market plans have been cancelled moving to the new exchanges. Alternatively, it could have something to do with what's afoot in states like Florida and Texas, which have a high number of uninsured and where Republican governors have blocked the expansion of Medicaid to the near-poor. That leaves huge numbers of people both uninsured and ineligible for subsidy assistance.

The Department of Health and Human Services declined to comment on the causes of the lower than anticipated subsidy-eligible population.

Update: Citing Kaiser Family Foundation data, Woodrow Wilson School MPA-candidate Galen Benshoof says the expected proportion of subsidy-eligible enrollees should be closer to 60 percent. He's crunched the data on a state-by-state basis and parceled out how much each state is below projections when it comes to attracting the subsidy-eligible. Pay attention to the final column, writes Benshoof—it "presents how a state’s current applicant composition looks relative to its total projected market. In many states, represented by the red text, a low proportion of people eligible for financial assistance have applied so far, relative to the total population in the state that would be eligible if they applied (per Census data)."