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  • Yet Another Serious Issue Could Derail Obamacare

    Posted by Shannon Early on October 29, 2013

    Even as the Obama administration is putting out fires related to the health insurance marketplace openings and the technology glitches that have frustrated millions of consumers, more serious issues keep popping up. The most recent disaster in the making is the fact that a recent report shows that in many of the 15 states that developed their own exchanges, more residents are enrolling in Medicaid than in private insurance policies.

    If this trend does not reverse, there might not be enough health, young people purchasing health insurance to allow the system to work. The one bright point for President Obama during the initial weeks of open enrollment has been the relative success of the state-run exchanges. On Monday, he even said that there is a lot of demand for insurance products through these state exchanges, so much so that the numbers even surprised him and other state officials.

    However, according to a CBS News investigation, 87 percent of the more than 35,000 people that have signed up for insurance through the Washington exchange have enrolled in Medicaid. In Kentucky that number is 82 percent of the 26,000 new enrollments. Of the 37,000 enrollments in New York, 64 percent are enrolled in Medicaid.

    Medicaid officials have said they do not know why the percentages enrolled in Medicaid are so high; however, they did point out that Medicaid has an easier enrollment process than private insurance. Consumers who are eligible to purchase private insurance on the exchanges have many choices to make, but people who are eligible for Medicaid have just one choice.

    Former Medicaid director Gail Wilensky, though, said the insurance industry is growing concerned about these large Medicaid numbers, since they need young, healthy people to purchase private policies in order for the Affordable Care Act system to work as designed. If the insurance companies do not get the enrollments they need, they are going to be forced to raise their rates.

    According to the Obama administration, the large Medicaid enrollments were expected since many states elected to expand the program to cover more low-income people. However, when the administration points to the numbers and says there is a demand, it is misleading because the majority of the enrollments aren’t in private insurance. If this trend does not turn around, the healthcare law could be in big trouble, even if the website is fixed as promised.

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