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Thanks to Charles Ornstein for giving me a heads' up about an article in Yahoo Finance (reposted from Investors Business Daily) today, which has a rather loaded headline and lede:

ObamaCare Enrollment Falling Significantly, Insurers Reveal

ObamaCare exchange statistics should clear up any doubt as to why the Obama Administration has been tight-lipped about enrollment since celebrating 8 million sign-ups in mid-April.

Reality, evidence suggests, could require quite a come-down from those lofty claims.

The nation's third-largest health insurer had 720,000 people sign up for exchange coverage as of May 20, a spokesman confirmed to IBD. At the end of June, it had fewer than 600,000 paying customers. Aetna expects that to fall to "just over 500,000" by the end of the year.

Yup, on the surface that does look pretty bad. Or, at least, it would, if a) that was representative of the trend as a whole and b) if I hadn't already addressed the "attrition" factor several times in the past.

Regarding the Aetna number: Yes, it's true, if Aetna ends the year with 500K paid QHPs by the end of the year, that would indeed represent a 30% drop from 720,000 paying customers. However, if you read the above quote carefully, notice that isn't what it says; it says they had 720K "sign up" as of May 20.

In fact, take another look at the last Investers Business Daily piece I've written about, and you'll notice something very interesting about halfway down:

Aetna says that out of 720,000 sign-ups, only about 580,000 were paid up by May 20, a payment rate of only 80.6%.

Hmmm...interesting, since according to Bloomberg News, Aetna's official testimony before Congress gave the paid number as in "the low to mid-80 percent range"...as of May 7th. "Low to mid-80's" would suggest around 83%, or 598K. Not sure how that number dropped by 18,000 over the next 2 weeks. Clerical error on Aetna's part?

The point is, that you can't simply divide 500K/720K to get the attrition rate. You have to divide by the number of paid enrollees, which was 580,000..."as of May 20th". That's right, "at the end of June, it had fewer than 600,000 paying customers"...not exactly shocking since you already said that only 580K had paid as of 6 weeks earlier.

In any event, depending on whether you go by the 80% or 85% paid rate, that means that Aetna does not expect to have a net loss of 220,000 paying customers by the end of the year; they expect to lose only between 80,000 (13.8%) to 98,000 (16.4%) by then. Let's split the difference and call it an even 15% attrition, assuming that this already accounts for additions as well (ie, additional people enrolling during the off season).

Please note that I'm not saying that those other 108K-144K people should be counted as paying customers; I'm simply pointing out that they've already been subtracted from the total (at least I've done so, anyway...although I'm pretty confident that the actual number is more like 72,000 than 108K-144K anyway). Subtract them, yes...but don't do so twice.

15% attrition is a hell of a lot better than 30%. Over 6 1/2 months, that's around 2.3% per month.

How does that compare with other companies on the exchanges?

Well, there's two other data points given in the IBD article, although neither of these get the screaming headline:

Cigna (CI) said that it expects its individual market customers, including more than 100,000 in the exchanges, to "move from 300,000 down to 280,000 in that range," Cigna CEO David Cordani said in a conference call.
Hmm...they don't specify what portion of that 20K loss they expect to come from the 33% in the exchanges, but assuming it's proportional, that's a loss of around 7,000 out of 100,000 by the end of the year...or just 7% attrition, or just over 1% per month. Huh.
...Another data point comes from Washington, the only state that didn't report sign-ups to HHS until they paid an initial monthly premium. As also pointed out by Charles Gaba of ACASignups.net, the state's exchange had 164,062 paid enrollees as of April 23. But the state reported 156,155 people enrolled as of June 1.
I appreciate the shout-out, I really do. However, that 164,062 number was actually as of March 31st. You see, WA is one of two states (Connecticut is the other one I know of) which did not participate in the open enrollment "extension period". That means the 5% attrition rate (156,155 / 164,062) number reflects the attrition rate after 2 months...or around 2.5% per month.

So. We have monthly attrition rates of 2.3% projected, 1% projected and 2.5% confirmed.

Which, by an amazing coincidence, happen to fall right in the middle of the 2-3% range that Robert Laszewski, Chris Conover and I all agree seems to be about right.

In other words, a 2.5% monthly attrition rate is not only nothing to be alarmed about, it's exactly what I've been projecting for awhile now.

In addition, there's another factor to consider: Why are these people "dropping out" of their Aetna (and other) private healthcare plans? Well, I can think of plenty of reasons which come to mind:

--According to the March/April HHS Report, out of the 8.02 million who enrolled as of 4/19, 25% of them were between 55-64 years old at the time. I don't know if that's evenly spaced for each year, but if it is, that means around 2.5% (200,000) of them were 64 years old. Guess what happens to 64-year olds over the next 12 months? They turn 65 and qualify for Medicare.

 --Some of these folks might have fallen on hard times and now qualify for Medicaid...especially since half the states expanded it.

 --Others might have had a positive turn of events, gotten a job with benefits, and moved to Employer Sponsored Insurance. Note to conservatives: People gaining decent employment with benefits is a good thing.

 --Others might have gotten married to someone who already has coverage through their job. Note to conservatives: People getting married is supposedly a good thing, remember? (Oh, right, unless they're gay, but that's a whole other issue...)

 --Still others might have joined the military and are now covered by the VA (again, We Love the Troops, right?).

 --A few might have left the country and become expatriots, or denounced their U.S. citizenship ("Gone Galt", I believe the term is).

 --Finally, some of them might have, you know...died. It does happen to all of us sooner or later, after all.

The point is this: NONE of the reasons listed above is a reason to wring your hands or attack the ACA. These are all normal things that people do, and for the most part they're simply the flip side of the very same reasons why people are still enrolling in QHPs during the off-season: Major changes in lives.

Just as around 9,000 people are enrolling per day right now, presumably a similar number (or possibly somewhat higher) are dropping their coverage as well. There is nothing wrong with this, as long as their reason for doing so is on the above list (or a handful of others I've forgotten to include).

In the end, assuming 9K/day being added, around 90% paying for their first month and around 2.5% per month being subtracted, I estimate that we'll end 2014 with a total of roughly 7.3 million still on the books. If those three numbers are off a bit this way or that, it could be a bit higher or lower; figure somewhere between 7 - 7.5 million.

And then we're into the 2015 enrollments and the whole thing starts all over again...

UPDATE: I see that the Daily Caller has picked up this ball and is trying to run with it. Even more depressingly, the reporter who wrote their storyfollows me on Twitter and posted her piece a couple of hours after I had already debunked it. Not saying that she should be expected to read everything I write, but given that the topic at hand is ACA Enrollments, you'd think that she'd have checked to see if I chimed in on it first...

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Comment Preferences

  •  In other breaking news (19+ / 0-)

    the sun rose and the tide went out. And about the Daily Caller- you can lead a horse to water etc etc.

    But everyone who wants to know the real situation is grateful for your explanations as always!

  •  They really are running out of anti-ACA arguments (11+ / 0-)

    when the best they can come up with is "well, some people seem to be dropping their coverage and we really have no idea why so it must be that they hate Obama or are too stupid & disorganized to pay their premiums."

    •  Not for lack of trying (2+ / 0-)
      Recommended by:
      Brainwrap, T Maysle

      Bloomberg Businessweek: Dire Obamacare Prediction Falls Hilariously Flat

      Nobody would sign up.

      Everybody's plan would be canceled.

      Premiums would skyrocket.

      Nope.

      Consumers’ next Obamacare challenge: Tax forms

      Right, because none of the tax services and free tax software have made any provision for walking taxpayers through it with the date from their insurers. Remind me again what fraction of taxpayers have QHPs? It's about 8.5 million total. And it is only the ones who get subsidies who have this question.

      If your insurance company can't get you your plan information in January, that might be an indication that you should choose another company. Open Enrollment is supposed to end on Feb. 15, 2015, so you will have time to figure this out and take action.

      From HIV to cancer to Crohn’s, ObamaCare fails the sick

      The article claims that almost all insurers price important drugs in the top tier, with large co-pays. This ignores those who do not, plus other ways for people with specific conditions such as AIDS to get help. In fact, it denies that there are any.

      Certainly there are insurers gaming the system. It thus behooves sufferers to compare all of their costs under different policies before signing up. You can get a lot of help to do this.

      Immigration status may cost people Obamacare coverage

      The headline is totally wrong. The ACA is only for citizens and certain classes of immigrants, in the 50 states plus DC, but not the territories. Those of us who were paying attention all knew that. The problem here is errors in immigration records that might affect 300,000 people if not corrected.

      But the lies are having their intended effect.

      Obamacare Is Saving Lives. But Does Anyone Care?

      The components of Obamacare poll at 70%, while the name is under water.

      Back off, man. I'm a logician.—GOPBusters™

      by Mokurai on Tue Aug 12, 2014 at 05:41:44 PM PDT

      [ Parent ]

  •  Well... (12+ / 0-)
    --Still others might have joined the military and are now covered by the VA (again, We Love the Troops, right?).
    We love them till they come home from Afghanistan and hold out their prosthetic hand for some help.

    Ted Cruz president? Pardon my Vietnamese, but Ngo Pho King Way.

    by ZedMont on Tue Aug 12, 2014 at 09:28:43 AM PDT

    •  MHS, please, for active military (1+ / 0-)
      Recommended by:
      Brainwrap

      (Military Health System) The VA is for after they get back. It's complicated, I know. MHS departments:

      • TRICARE/TRICARE Management Activity (TMA)
      • Force Health Protection and Readiness (FHP&R)
      • Uniformed Services University of the Health Sciences (USU)
      • Defense Centers of Excellence for Psychological Health and Traumatic Brain Injury (DCOE)
      • Office of the Chief Information Officer (MHS-OCIO)

      The MHS also includes the medical departments of the Army, Navy, Marine Corps, Air Force, Coast Guard, and Joint Chiefs of Staff; the Combatant Command surgeons; and TRICARE providers (including private sector healthcare providers, hospitals and pharmacies).
      There are still significant gaps in coverage for military and veterans. The ACA was supposed to help, but Republicans have refused to implement some of it.

      Back off, man. I'm a logician.—GOPBusters™

      by Mokurai on Tue Aug 12, 2014 at 04:50:21 PM PDT

      [ Parent ]

  •  What about me? And people like me who did not s... (4+ / 0-)
    Recommended by:
    Brainwrap, jj32, pollbuster, Mopshell

    What about me?

    And people like me who did not sign up through the exchanges? Hubby and I do not qualify this year for subsidy so we signed up through our ins. agent. There are surely a lot of others in that situation, who may or may not have had insurance before 2014. Are those numbers reported by the insurance companies?

    •  I estimate around 8 million folks like yourself (5+ / 0-)
      Recommended by:
      pollbuster, ybruti, Cecile, ColoTim, Mopshell

      By my estimates, the breakdown is roughly as follows:

      http://acasignups.net/...

      ACA EXCHANGE ENROLLEES:
      --4.85 million newly-insured QHPs (about 4.36M paid)
      --3.65 million previously-insured QHPs (about 3.29M paid)
      --2.1 million newly-insured Medicaid/CHIP enrollees
      --4.6 million previously-insured Medicaid/CHIP enrollees

      OFF EXCHANGE ENROLLEES:
      --1.5 million newly-insured QHPs (about 1.35M paid)
      --around 6.5 million previously-insured QHPs (around 5.85M paid)
      --around 4 million newly-insured Medicaid/CHIP enrollees
      --(unknown number of previously-insured Medicaid/CHIP enrollees)

  •  One of the reasons? Aetna sucks. (5+ / 0-)

    I'm on the employee-provided Savings Advantage plan, which is essentially the bronze plan with some HSA contributions made by my employer.

    All that's just fine. The problem is that Aetna's prices for some medications are so expensive, I've been forced to pay cash prices (when possible) or use online coupons. My heparin isn't even covered by Aetna, because they only pay for Lovenox (a much more expensive medication.)

    Their prices for medical tests are also higher on average than other insurance companies.

    When you have to pay the cost of everything until you're through your deductible, knowing what Aetna's price actually is becomes a lot more important.

    So as a consequence, I'm already through my deductible for the year (great) but now I'm up to my neck in medical bills (boo.)

    I see you drivin' 'round town with the girl I love / And I'm like / Please proceed, Governor. - Dave Itzkoff

    by Jensequitur on Tue Aug 12, 2014 at 10:21:43 AM PDT

  •  I saw this as doom and gloom by Daily Caller (3+ / 0-)
    Recommended by:
    Brainwrap, pollbuster, Mopshell

    Buried in their story was the fact that more people are getting jobs and have new access to company subsidized benefits.  In turn, they are then choosing to leave their Obamacare plan.

  •  Only 10% of investors knew stocks up 30% last yr (2+ / 0-)
    Recommended by:
    ColoTim, Mopshell

    and we wonder how the media gets financial and #s stories so wrong seemingly all the frakking time?

    Its bc the business media is either 1) incredibly stupid (unlikely), 2) incredibly lazy (more likely), or 3) incredibly corrupt (most likely).  These morons have college degrees - and in many cases post-grad - yet they constantly make 'errors' that would embarrass grade schoolers.

    Of course, to paraphrase Will Rogers, 'its hard to convince someone when they're pay check depends on not believing'.  IOW, as has been a truism for 50 years: follow the frakking money.

    The American public, as a group, really is not stupid.  But, they rely on the media to provide accurate information.  The same media that cheerleaded us into Iraq when those actually doing reportage easily showed it was based on lies.  The same media that sat on the story that Bush illegally spied on millions of Ameircans until after he was elected in 2004 bc the story 'might have affected the election', when that is exactly the reason to publish it and why they get 1st A protection.  The same media that told millions of Americans to keep buying stock in companies it knew were about to collapse right up until the Bush Depression took us all off the cliff, when the warning signs were many, varied and shouted by the few honest members of their 'profession'.

    To note only a few of a seemingly infinite number of examples of misfeasance, if not down right mendacity.

    And some (often the same media, 'natch) wonder why 'American's are losing faith in institutions'?

    •  Upton Sinclair, actually (0+ / 0-)
      It is difficult to get a man to understand something, when his salary depends on his not understanding it!
      I, Candidate for Governor, and How I Got Licked (1935)

      Back off, man. I'm a logician.—GOPBusters™

      by Mokurai on Tue Aug 12, 2014 at 05:11:07 PM PDT

      [ Parent ]

  •  Oh, goody, an IBD op-ed (1+ / 0-)
    Recommended by:
    Mopshell

    What no one seems to have pointed out yet is that op-eds (and editorials) from IBD, just from their titles, let alone the content (as opposed to the substance), read like they come from a bunch of RWNJs.

    Then again, comparing the "editorial" pages of IBD and the Wall Street Journal, one might be hard pressed to decide which "newspaper" is further to the right in Tea Party Land.  (Most investors want technical and fundamental information on companies, not political rants).

    As a former IBD subscriber, I either generally, completely ignored the "editorial" page because of its RW screeds or else maybe I felt the need for some laughs for the day.

    Except for the trolls, most of us here at DK would only shake our heads at what a bunch of sickos -- probably big-time Fake News and Mock Outrage viewers or Rush Limburger listeners -- would avidly read the IBD editorials/op-eds/letters to the editors, which pretty much were and are more suitable for wrapping up your garbage and kitchen scraps.  

  •  IBD is the same rag that said (3+ / 0-)
    Recommended by:
    T Maysle, Brainwrap, Mopshell

    Stephen Hawking would be dead if he had to rely on the British NHS (which he has been doing all his life).

    Apparently the lack of a British accent threw them off, and so they printed an embarassing error of cosmic proportions that betrayed their lack of even rudimentary fact checking.

  •  Is It Money? (2+ / 0-)
    Recommended by:
    Brainwrap, Mopshell
    I see that the Daily Caller has picked up this ball and is trying to run with it. Even more depressingly, the reporter who wrote their story follows me on Twitter and posted her piece a couple of hours after I had already debunked it.
    Does this reporter get paid by the Daily Caller? If so, there's your answer as to why your update is not acknowledged.

    God's preference is for more people to be included,...whenever the circle is shrinking, where people are being excluded or disliked, God is not served. -Rev. Alice Connor

    by paz3 on Tue Aug 12, 2014 at 12:00:58 PM PDT

  •  Who would trust any Poll these days? (0+ / 0-)

    Look how many States have their own name for this same program. How many fools have no idea it's the same thing with just a different name? The law changed many things for the better regardless, and they all have to follow it regardless of name. People are safer from bad Insurers.. Over 7 million have coverage, depends on which "poll" you trust and mostly..who owns the poll. Obama's ACA still is a historical step forwards. While not perfect, except for the BS, the GOP still have no solutions or rewrites, and nothing to replace it with. The GOP congress have a policy, I feel NOT to have any ACA at all. They would go back to legalized killings by delays and denials to policyholders from this Insurance Industries abuses and greed. They need to be removed, period from any solution. Healthcare shouldn't be about profits, it should be about saving American lives, all lives equally.
    I doubt most of what I hear unless I trust the source. ACA isn't going away unless people sit on their asses and refuse to vote..giving the country over completely to the Koch's and those like them with nothing else to do but buy the rest of our US government and cancel any and all Social Programs, especially that one if we allow it by staying home.

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