Obamacare enrollment hits record high

Medicaid rolls also surge as employers continue to abandon their responsibility to provide health insurance

Here’s something to celebrate. The Biden administration announced today that the Obamacare insurance exchanges enrolled 16.3 million Americans in health plans for 2023, nearly 2 million more than last year. It’s the highest total ever.

During Biden’s first two years in office, the federal and state-run exchanges have added well over 4 million people to the ranks of the insured. This represents a sharp reversal from the four years of declining enrollment that took place during his predecessor’s term, whose hallmark was a steady stream of hostile rhetoric attacking Obamacare.

Given the sharp increase in the newly insured during this year’s open enrollment season, the U.S. uninsured rate, which stood at 8% last year, is certain to drop another notch when new numbers come out later this year.

Let’s chart the insurance market

The following two charts illustrate the positive impact the much maligned Affordable Care Act had on reducing the ranks of the uninsured. They also show how politics and who controls the machinery of government determines how the law will be administered. Note the dips in enrollment and the rise in the uninsured rate during the Trump years:

Source: Kaiser Family Foundation and Department of Health and Human Services

The charts also show the job of reaching universal coverage – the goal of the ACA – isn’t finished. There are still well over 20 million Americans without coverage.

Medicaid’s role

Moreover, the most significant gains in coverage came not from signups on the exchanges, but from the expansion of Medicaid to cover working people earning up to 138% of the federal poverty level, many of whom can’t afford even the modest premiums associated with the most heavily subsidized Obamacare plans.

As the following chart shows, state-run Medicaid programs, which still haven’t been expanded in 11 states, added over 10 million beneficiaries since Biden took office (the data is from January of each year, except the most recent datapoint):

And today, those gains are under threat. Millions of people could lose coverage when the Covid emergency ends and state Medicaid agencies, especially those in Republican run states, resume demanding extensive documentation before people can join or remain in the program, even when they clearly qualify.

Why has Medicaid signed up nearly twice as many newly insured as the exchanges during the past two years? It’s not because the nation’s low-wage workers have suddenly become a bunch of freeloaders.

Private employers forgo coverage

It has everything to do with what’s going on in the private insurance market. What we see there is a steady decline in the proportion of workers with jobs that include health coverage as part of their employment benefits.

Between 2015 and the end of last year, the private sector added more than 10 million jobs. Indeed, it has gained more jobs in the past two years under Biden than were lost during the brief Covid 19-related downturn, which wiped out all the gains since 2015. Yet the number of people covered by private insurance, which includes all family members of the privately insured, hasn’t budged an inch.

In other words, a significant portion of the new jobs created by the U.S. economy still are not providing health insurance. This trend long-predated the rise of the gig economy and at-home work. This country has yet to break out of the long-term trend of generating mostly low-paying service jobs that provide no or inadequate health coverage.

According to one study written the year Obamacare passed when the uninsured rate stood at a record 18%, the share of employed workers with health insurance had fallen from 93.5 percent in 1979 to 83.3 percent in 2008. According to the Bureau of Labor Statistics, that percentage has since fallen to 71% as of March 2021. The failure of private employers to provide coverage for their low-wage workers is why Obamacare with its subsidized policies and Medicaid expansion was needed in the first place.

So, today, as the Biden administration celebrates another record year in Obamacare signups, let’s not forget that the long-term trends on health insurance remain dire. As more and more employers abandon their responsibilities in what in theory is an employer-based health insurance system, the government has been forced to step in to subsidize and provide this basic human right.

As we listen over the next two years to Republicans in Congress bray about the need to cut “entitlements” because of the federal budget deficit, let’s also remember the budget is out balance not because the government subsidizes health insurance for the old, the poor and workers without benefits. It’s because there have been decades of irresponsible tax cuts given by those very same Republicans to the wealthy and corporations, many of whom fail to provide adequate coverage for their workers and families.