The ObamaCare Hard Sell

By Naomi Lopez Bauman , Special for USDR

When it comes to enrollment in his signature health insurance overhaul, the Affordable Care Act, President Obama paints an underdog picture. He has repeatedly said: “We didn’t make a hard sell. We didn’t have billions of dollars to spend on commercials like our critics did.”

To build the federal website, fund state-run health insurance exchanges for some states, and facilitate marketing and outreach, however, the federal government is already slated to spend more than $6 billion.

These federal funds equate to more than $700 for every enrollee based on the administration’s report that 8 million have “selected” a health insurance plan offered under the Affordable Care Act (ACA). But no one can be sure, even now, what the exact enrollment figure is. That’s because the administration continues to report only those who selected coverage, not the number of those who actually paid for it. If one accounts for those who have actually paid and who were previously uninsured – the cost to get one person enrolled could be closer to $3,000.

In the president’s home state of Illinois, for example, federal funds paid for “outreach” and marketing.  The total spent, based on federal grant award totals reported by the Centers for Medicare & Medicaid Service, or CMS, was almost $155 million. That means that, when the state’s share of the potential $677 million tab for the federal website is included, taxpayers spent between $800 and $1,600 in “acquisition” costs for each state resident who enrolled in an ACA plan. The exact amount will depend on how many Illinoisans ultimately pay for coverage.

New York enrollees, based on the CMS federal grant data, will cost taxpayers $1,400 per enrollee for the combined cost of establishing a state-based exchange website, plus outreach and marketing. California, which led the nation in enrollments and ran its own exchange, comes in at about $870 per enrollee. Hawaii, which had the lowest number of enrollees in the country, could cost taxpayers about $24,000 per enrollee.

But finding out who is actually covered just became even more difficult.

The federal agency charged with implementing the ACA has announced that it will cease issuing monthly enrollment reports. The U.S. Department of Health and Human Services will no longer be regularly reporting on the law’s progress.

Not only does this announcement mean that it will be virtually impossible to obtain information on the law’s progress

The reports had been providing closely followed national- and state-level information on the number of individuals selecting a health insurance plan, those individuals by age, gender, the level of coverage selected and the percent of individuals eligible for a federal subsidy. The most recent report, issued on May 1, also included racial and ethnic data on exchange enrollees.

The administration had already been facing significant criticism over the lack of transparency contained in the enrollment reports.

For example, the reports define enrollment as plan selection. Critics point out that, without information on who has actually paid their first month’s premium, the actual number of covered individuals is difficult to determine.

Critics also maintain that another important statistic the administration is not sharing is: How many of these enrollees were previously uninsured? The government’s original enrollment projections for 2014 were based on reducing the number of the nation’s 48 million uninsured by half through private coverage and Medicaid expansion.  These goals were revised in September of last year, but continued to assume that the vast majority of exchange enrollments would be previously uninsured individuals.

According to national survey data from McKinsey & Co., however, as few as 26 percent of exchange enrollees were previously uninsured.

Additionally, only those who have paid for a plan have actually obtained coverage. Nationally, according to the survey, it is estimated that 87 percent of enrollees have actually paid. Only about 71 percent of the previously uninsured, however, reported paying for their coverage, McKinsey & Co. found.

Total exchange enrollment could be much closer to 2 million newly insured individuals obtaining private coverage than the government’s reported 8 million. That would put the average cost of moving each previously uninsured individual into coverage at about $3,000 per person.

Not only is this well above what the private sector might spend to acquire a customer, but there also are not federal requirements to purchase other types of products. While there is no apples-to-apples cost comparison available, given the nature of the health insurance exchange product, it is worth noting the private-sector customer acquisition costs for other products.

For example, spends about $7 to acquire a new customer. spends approximately $10. While these are very different products, spending several hundreds to thousands per customer should be considered a hard sell by most any measure.

Even with a hard sell, actual enrollment was tepid. Unfortunately, unless federal lawmakers pass and the president signs legislation requiring HHS to issue enrollment reports, we will know even less about the true cost of the ACA. Perhaps that is the point.

Naomi Lopez Bauman is director of health policy at the Illinois Policy Institute. You can follow her work at and follow her on Twitter (@LopezBauman).

All opinions expressed on USDR are those of the author and not necessarily those of US Daily Review.

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