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Obamacare's Dismal California Numbers

900,000 Californians lost their health plans by January 1. 500,000 signed up on the Obamacare exchange.

4:26 PM, Jan 24, 2014 • By JOHN MCCORMACK
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This week, the state of California finally got around to announcing how many people had signed up for health insurance through the state's Obamacare exchange by the end of December. Ezra Klein and Evan Soltas of the Washington Post's WonkBlog immediately declared victory in a post titled, "In California, Obamacare is succeeding."


"Wonkbook's Number of the Day: 424,936. That's how many people California enrolled in Obamacare policies between October 1 and December 31," wrote Klein and Soltas. "The goal for the reach [sic] by the end of March is between 487,000 and 696,000 -- and it now looks very much attainable."

The WonkBlog report was a bit off: 424,936 is only the number of people who signed up by December 31 and qualified for subsidies. The total number of sign-ups, for both subsidized and unsubsidized plans, was about 500,000. Furthermore, it's inaccurate to call these people "enrollees" because Covered California has refused to say how many paid their first month's premium, which is required to actually be enrolled in a plan. (We'll forgive the inaccuracies, since it's been such a busy week at WonkBlog.)

But even if all or most of the 500,000 people who signed up for Obamacare by December 31 end up paying their bills, is that really a success? Leaving aside important questions about the quality and cost of Obamacare plans, the enrollment numbers are not impressive. The California exchange is doing very little to achieve the goal of insuring the uninsured.

Recall that California did not allow insurers the opportunity to re-offer plans canceled by Obamacare. Anne Gonzales of Covered California confirmed to THE WEEKLY STANDARD in a phone call that all 900,000 non-grandfathered plans in California "had to be discontinued by January 1." So how many of the 500,000 people who signed up for Obamacare before January 1 previously had insurance? "I don't think we have those [numbers]," Gonzales said.

But it's easy to infer that the majority of people who signed up for Obamacare already had insurance. "Of those 900,000 [who lost plans], 310,000 of those would have been subsidy eligible if they came to the exchange," Gonzales said. Another 20,000 subsidy-eligible Californians lost plans because their insurance carriers were dropping out of the market.

Health care industry expert Bob Laszewski points out that that means at least 330,000 of the 500,000 people who signed up for Obamacare already had health insurance. "If you want to know how many uninsured bought it, subtract by at least" 330,000, Laszewski told THE WEEKLY STANDARD. "The only place they can get the subsidy is in the exchange. So if they're going to replace their policy, unless they're really stupid, they're going to replace it in the exchange."

What happened to the 600,000 Californians who lost plans because of Obamacare but didn't qualify for subsidies? Some probably signed up on the exchange anyway, further reducing the number of uninsured who gained coverage because of Obamacare. Others could have purchased Obamacare-compliant plans outside of the exchange.

Still other previously-insured Californians now lack health insurance because of Obamacare. Just how many people fall into each camp? We don't know. "I don't think we would have any of those demographics that you're describing," Anne Gonzales of Covered California told me. 

But we do know that it's very likely that that fewer than 200,000 of California's 5.5 million uninsured residents (3.3. million of whom are eligible to enter the exchange) signed up for Obamacare by January 1. After spending $1 billion on developing and advertising the exchange in a blue state where views about the law are more favorable than the nation as a whole, is that really a success? Does that justify a multi-trillion dollar program and the cancellation of the insurance policies of millions of Americans across the country? The good folks at Covered California and WonkBlog seem to think so. A strong majority of American voters continue to disagree.

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