One Third of Uninsured Won’t Sign Up for Obamacare
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The Fiscal Times
March 17, 2014

As the White House scrambles to get people signed up for health insurance before the March 31 deadline, many uninsured Americans say they are still planning to take their chances and remain without coverage. 

A new study by Bankrate.com shows that about one third of uninsured Americans are going to remain without coverage and opt to pay the penalty.

The survey results suggest that the administration’s outreach to uninsured people may be falling short, with more than half of people without insurance unaware of the March 31 deadline—and even more unaware of subsidies that could make their policies more affordable.

Related: Obamacare May Be Failing the Uninsured

Bankrate surveyed 3,005 people and found that 41 percent of those who were uninsured said they plan to stay uninsured because they think that health insurance is too costly. Meanwhile, about 70 percent said they were unaware of subsidies available under the new law that could make their health plans more affordable.

The study’s findings are worrisome for the Obama administration since the key goal of the president’s health care law was to extend access to health coverage for the uninsured.

A separate study by the McKinsey consulting firm found just 27 percent of Obamacare enrollees were uninsured. That means that the majority of those signing up for Obamacare had previous insurance of some kind—whether they were kicked off their old policies, or they found a better deal on the exchanges. Though not confirmed by the White House, if accurate, that could mean the law is failing to meet its intended goal.

Related: Gallup: Employment, Obamacare Lower Uninsured Rate

Gary Cohen, an official for the Centers for Medicare and Medicaid Services said the administration has not been tracking how many of the Obamacare enrollees were previously uninsured.

“That's not a data point we are really collecting in any sort of systematic way,” Cohen told an audience at a health policy conference in Washington.

However, a separate poll from Gallup shows that the uninsured rate is at its lowest rate in the last five years—and the pollsters say Obamacare may deserve part of the credit. Of course, the uninsured rate is also tied to the lower unemployment rate, which could also explain the decline.

Still, the Bankrate survey found one bright spot for the White House—about 66 percent of young people between the ages of 18-29 said they are planning to sign up for coverage. This is crucial since the Obama administration has stressed from the beginning the importance of enrolling a strong mix of young and healthy people to offset the costs for older, sicker Americans.

Through February, young people made up about 27 percent of total enrollees--well below the White House’s 40 percent benchmark. Still, administration officials have repeatedly said they expect a crush of young people to sign up ahead of the March 31 deadline.

Related: Uninsured Still Unaware of Obamacare Deadline

Under the law’s individual mandate, those who do not sign up for health coverage before March 31, will be subject to a penalty of 1 percent of their annual income. However, under rules issued by the administration, millions of people will likely be exempt from paying that penalty through a provision called the “hardship exemption,” which was extended last week through 2016.

This allows anyone who believes they will have a “hardship in obtaining insurance,” including homeless people, or those who have foreclosed upon, can apply for the exemption.

Critics of the provision say it is too ambiguous and could potentially allow anyone to skirt around the penalty.

“Quietly, without any fanfare, there’s a real question about whether the White House has just abandoned the individual mandate, the heart of Obamacare itself,” Boehner said a news conference last week. “This is a huge public policy decision that could affect millions of Americans.”

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Washington Correspondent Brianna Ehley, based in D.C., covers Congress, government agencies and spending issues, health care, and tax and economic policy for The Fiscal Times.