Analysts predict surge in health care enrollment

• Analysts say enrollment will pick up when those eligible for subsidies sign up
• Early demand from those with pre-existing conditions
• Improved website makes it easier to buy insurance than before

WASHINGTON — The surge in health insurance enrollment in November lifted the spirits of federal officials Wednesday, but industry experts say the potential for higher enrollments comes from a huge pool of customers who are eligible for subsidies to buy insurance but who have not used the exchanges.

The government quadrupled its enrollment numbers from October to November, with 364,682 people signed up for health insurance through either the federal or state exchanges, officials announced Wednesday.

But while 1.9 million people checked their eligibility for enrollment in either the federal or state exchanges, only 47% of state applicants and 41% of federal applicants in the first two months were eligible for financial assistance.

That means there remains a huge pool of potential customers who may enroll in insurance in the coming weeks and months, said Matt Eyles, executive vice president of Avalere Health, a health advisory company.

"We expect a much higher proportion of people who enroll in plans to qualify for subsidies," he said. "It's still at less than 50% for the states and 40% for the feds. The expectation is that it would be between 80 and 90%."

"It could be that those are the people who are hard to reach," Eyles said, referring to the people who are eligible for subsidies. "There's a big opportunity there."

People who make less than 400% of the federal poverty level, or $94,200 for a family of four, are eligible for subsidies to help pay for their insurance. In some states, such as Kentucky, the differences were stark, with 75,008 qualifying for enrollment without assistance, and 27,003 qualifying for financial help.

In California, which has its own exchange, the number of applicants eligible for subsidies and those who are not are split about evenly, said Peter Lee, executive director of California's exchange, Covered California.

Lee said the number of applicants eligible for subsidies was about 20% higher in November than in October.

In October, Lee said, the first wave of insurance customers were people who had been excluded from the market because of pre-existing conditions and were going to buy it regardless of their eligibility for subsidies.

Those eligible for subsidies, Lee said, are those who may not have had insurance before because they couldn't afford it or know how to navigate the system. That makes them harder to reach, he said.

Once those people learn about the insurance and getting help to buy it, they are more likely to enroll, Lee said. "Many of them are less familiar with insurance. They take more engagement."

LONG WAY FROM GOAL

Despite the gains in November and optimism from some analysts, the government faces significant challenges getting people signed up by Dec. 23 to gain coverage by Jan. 1, and by the end of the enrollment period March 31.

Federal and state exchanges, the websites where people can buy health insurance, opened on Oct. 1 but were hampered by outages, glitches and constant slowdowns that have eroded confidence in the Affordable Care Act and President Obama's support for it. But the latest round of statistics, officials said, showed enrollment in health insurance is gaining strength.

In October, Healthcare.gov, the federal site, enrolled 26,794 people, and another 137,204 in November. The state exchanges enrolled 79,391 people in October and 227,479 in November.

An additional 803,077 were determined or assessed eligible for Medicaid or the Children's Health Insurance Program (CHIP) in October and November.

HHS Secretary Kathleen Sebelius acknowledged the damage caused by the troubled website during testimony before the House Energy and Commerce Committee hearing Wednesday.

"There's no doubt that the problems with the website put a damper on some people's enthusiasm," she said. "I think the launch was flawed and failed and frustrating for millions of people."

Still, Sebelius has asked her agency's inspector general to review the site's development.

"I think the launch was flawed and failed and frustrating for millions of people," Sebelius said.

The exchanges have a long way to go to meet their goal of 7 million new insurance customers in the first year, said Alan Cohen, the chief strategy officer of Liazon, which provides health exchanges to private employees.

"It's just a big, big number," Cohen said of the goal. "The numbers coming out seem like so much more than before, but they still have to be so much more. We could almost be lulled into complacency."

The Congressional Budget Office has estimated that 7 million Americans need to buy insurance through the exchange in the first year to make the law work. Those numbers were highlighted Wednesday in a report by a conservative institute, the American Action Network, which said the recent enrollment figures show the administration is behind the pace it needs to reach that target.

"Assuming a linear enrollment trend, 2.3 million people would need to be signed up by the end of November--more than six times higher [than] the actual enrollment reported by HHS, in order to meet the 7 million target," wrote Chris Holt, the network's director of health care policy.

But diversity among those buying insurance is more important than the sheer number of enrollees said Ceci Connolly, managing director of PWC's Health Research Institute.

"Obviously you want to see good, steady enrollment day after day after day," Connolly said. "But I will tell you that ultimately it's less about the number of people who enroll and more about who enrolls — a good mix of age and health conditions to spread out the risk."

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