ACA Enrollees Mostly Those Who Were Previously Insured

While the Obama administration touts beating out enrollment expectations during the open enrollment period for insurance exchanges under the Affordable Care Act (ACA), a report from McKinsey consulting reveals the truth behind those numbers.

The April survey found just 26% of enrollees on the insurance exchanges were people who reported being previously uninsured. The remainder is people who had coverage in the previous year. Although enrollment growth continue, the percentage of newly enrolled who were previously uninsured did not increase further, according to McKinsey.

Overall, just 13% of the uninsured population had enrolled in a plan compared to 90% of respondents who had coverage previously. While 87% of those who selected insurance under the ACA had already paid their first premium, payment rates were higher among those who were previously insured and those 30 years and old. Just 71% of those who were previously uninsured reported an intention to definitely pay future 2014 premiums.

The McKinsey report revealed that despite efforts to educate the public about the insurance exchanges and the ACA, the administration still has work ahead of it. The top reason for not enrolling was perceived affordability. However, 90% of those who said affordability challenges prevented them from enrolling were eligible for subsidies, and awareness of these subsidies remained low.

Two-thirds of respondents who were subsidy-eligible reported they shopped but did not enroll because of affordability concerns. And these respondents did not realize they were eligible for subsidies.

“…previously uninsured, subsidy-eligible shoppers who indicated that they knew their subsidy amounts were almost three times as likely to report having enrolled as those who did not,” according to the authors.

A quarter of respondents who did not get coverage during the open enrollment period in 2014 said they intend to purchase coverage in 2015. Nearly half of those who do not plan to enroll in 2015 were unaware of the penalty for not having coverage. However, when made aware of the penalty, intentions to enroll rose slightly.

The top 2 reasons offered by those who do not intend to enroll despite knowledge of the penalty were: 49% believe purchasing insurance will cost more than the penalty and 24% do not think they need health insurance.