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It's the Good News that Could Doom Obamacare


The Obama administration was hoping that 500,000 people would have gained insurance through the federal exchange by the end of October. But the WSJ reports that the total number comes only to 40,000 or 50,000. Such low numbers aren’t all that surprising given all we’ve seen so far from the rollout, but when viewed in comparison with other recent disclosures it starts to look much more important. The most dangerous number we now know is something that might appear as a success at first. WaPo:

The figure of 40,000 disclosed Monday did not include Medicaid sign-ups. At least 440,000 people have signed up for Medicaid through the health-care initiative, according to Avalere Health, a consulting firm that has been tracking sign-ups. Budget forecasters have projected that in 2014 there will be a much more even balance between private insurance and Medicaid participants.

Given that one of the goals of the law is to expand access to the poor through Medicaid, this statistic makes it seem like at least one feature of the law is working properly. But the total number of signups is in some ways less important than the demographic mixture of those who have taken advantage of new ACA provisions. Low exchange signups paired with high Medicaid use means that, so far, the ACA’s main effect on insurance pools has been to add a lot of high risk customers without offsetting them with young or healthy customers. Since higher risk insurance pools mean higher premiums across the whole pool, this Medicaid signup imbalance means the worst-case-scenario accounts of the Obamacare rollout are one step closer to coming true.

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