U.S. Says Obamacare Enrollment Points To Stable Costs

[May 02, 2014]  By David Morgan

WASHINGTON (Reuters) — The Obama administration on Thursday predicted stable health insurance costs for consumers who have purchased Obamacare plans, defying critics who warn that President Barack Obama's landmark healthcare law will lead to skyrocketing premiums.

Just over 8 million Americans signed up for private coverage in state and federal insurance marketplaces during the law's first enrollment period through April 19, according to a new administration report released on Thursday. Outside the marketplaces, the report said, an additional 5 million people bought plans that comply with Obamacare's consumer protection and benefit standards.

Both sets of health plans sold within any given state belong to the same risk pool — the mix of policyholders ranging from young, healthy people to the old and sick. Larger numbers of older, sicker customers tend to produce upward pressure on costs, forcing future premiums higher for consumers.

"We believe, based on the data that we've seen and independent data that's out there, that premiums will be stable and that the risk pool is sufficiently large and varied to support that kind of pricing in every state," said Mike Hash, a top healthcare reform official at the Department of Health and Human Services.

The administration runs a federal marketplace for consumers in 36 states. Fourteen states run their own.

The outlook for Obamacare premiums is a major issue in this year's congressional elections. Republicans and some health insurers have warned of double-digit increases next year in states with low enrollment. Other experts have said most people will see relatively moderate premium hikes in the single digits.

Thursday's report said 12.8 million people obtained coverage through the marketplaces or government health programs for the poor during Obamacare's open enrollment, including over 4.8 million who gained coverage through the Medicaid and Children's Health Insurance Program (CHIP).

The total is roughly equal to the latest topline 2014 forecast from the nonpartisan Congressional Budget Office, which predicted 6 million enrollees in private insurance and another 7 million through Medicaid and CHIP, for a combined 13 million people.

Eighty-five percent of Obamacare marketplace applicants sought federal subsidies to help pay for coverage, the report said. About two-thirds selected mid-quality "silver" plans, while another 20 percent chose lower-level "bronze" policies.

Among federal marketplace applicants who reported their race, 63 percent were white versus 16.7 percent who were black, 10.7 percent Latino and 7.9 percent Asian. But one-third of applicants did not identify their racial background.

Republicans charge that the administration's private enrollment totals are inflated because the administration has not said how many people have paid their first month's premium, which determines official enrollment. Administration officials, insurers and independent researchers have estimated that 80-90 percent have paid.

On Wednesday, Republican lawmakers on the House Energy and Commerce Committee released a study of insurance data showing premium payments running at only 67 percent, suggesting an actual enrollment total of less than 6 million. The White House and Democrats dismissed the study as misleading.

(Reporting by David Morgan; editing by Sandra Maler and Chizu Nomiyama)

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