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Here’s One Way Obamacare Is Exceeding Expectations

Obamacare's 6-Million Target Hit As Exchange Sees Visits SurgeObamacare's 6-Million Target Hit As Exchange Sees Visits Surge
The "death spiral" may be a myth.Photograph by Andrew Harrer — Bloomberg via Getty Images

Obamacare’s fortunes have been decidedly mixed as of late.

First, a slew of major health insurers like UnitedHealth and Humana announced that they had either already decided to or were contemplating exiting many of the health law’s statewide insurance marketplaces (although rival Anthem said it would be sticking with the exchanges); premiums are expected to rise sharply in certain markets where enrollees have proven sicker than expected; and, last week, a federal judge sided with congressional Republicans in a lawsuit targeting the Affordable Care Act’s cost-sharing subsidies for reducing planholders’ out-of-pocket medical costs.

But a new study finds that implementation of the health law has led to significant reductions in the number of uninsured children in America, particularly among low-income households. More than 90% of low-income kids eligible for public insurance programs like Medicaid and the Children’s Health Insurance Plan (CHIP) were covered under them in 2014—a sharp rise from the 81.7% and the 88.7% who were covered in 2008 and 2013, respectively.

Children have long been among the most highly-insured demographics in the U.S., making gains of even 2 or 3 points in the insurance rate significant. The report, from the Urban Institute and the Robert Wood Johnson Foundation, found that the number of uninsured kids dropped by nearly 1 million in Obamacare’s first full year of implementation.

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It’s the latest evidence of what healthcare experts call Obamacare’s “Woodwork Effect.” Beyond the private individual insurance marketplaces, the health law used an expansion of Medicaid as a tool for significantly expanding health coverage. While this provision was scaled back by the Supreme Court into an optional state-by-state program, 31 states and the District of Columbia have embraced it.

But government figures have shown Medicaid enrollment rates rising even in the states that didn’t expand the program—i.e., people who didn’t previously know they or their children were eligible for public health plans have been coming “out of the woodwork” and getting insured amidst Obamacare’s enrollment push and the storm of media coverage surrounding the health law.

 

Study authors noted that significantly more eligible low-income children joined Medicaid or CHIP in the states that expanded Medicaid (just 4.9% of eligible kids in those states remained uninsured in 2014 compared with 8% in the states rejecting the program).

Not all groups have cheered the Woodwork Effect. Critics such as Americans for Tax Reform point out that the Obama administration significantly underestimated the effect and the subsequent costs to state and federal budgets.