Signs that final Obamacare surge wasn't that big

An Obamacare sign is seen on the UniVista Insurance company office in Miami.
Getty Images
An Obamacare sign is seen on the UniVista Insurance company office in Miami.

Maybe there wasn't a lot of sizzle in this latest Obamacare "surge."

The third season of open enrollment in Obamacare health plans ended quietly Sunday in much of the United States. And in contrast to the first two seasons, federal officials were not crowing Monday about the numbers of people who signed up in the final week.

The marked lack of celebration came as an insurance industry analyst said he believes "the big last-minute surge" in Obamacare plans "did not happen" as had been expected.

That would be in sharp contrast to the first two years when very large crowds of people rushed to beat the final deadline for obtaining health coverage and avoid owing a fine.

And if the final surge of Obamacare sign-ups wasn't that big this time around, it could make it harder for overall enrollment to get significantly higher than the final tally for 2015. As of last week, at least 11.6 million people had signed up for plans, with a week left before the deadline. That compares to almost 11.7 million people who had signed up nationally by the close of open enrollment last year.

One insurer told CNBC that its sign-up rate last week as the final deadline for 2016 coverage approached was 75 percent of the sign-up rate seen in mid-December — which was the deadline for getting insurance coverage that would take effect Jan. 1.

Insurance analyst Robert Laszewski said he has been in communication with insurers who control about half of the Obamacare market. They have told him that although last week's volume was higher than during the rest of January, it was anemic compared to the surges seen in the last weeks of 2014 and 2015 enrollment.

"Just as we get into high gear for the 2016 elections, the [Affordable Care Act's] growth would appear to have stalled," said Laszewski, who is head of Health Policy and Strategy Associates in Alexandria, Virginia, and a critic of Obamacare.

"One of the big players" told Laszewksi that it expected to see an actual net reduction in sign-ups from its customers from the government-run Obamacare exchanges in the final week compared to the same period for last year, he said. Another told him that while sign-ups spiked on Saturday and Sunday, they were doing so off of a very low base of sign-ups earlier last week.

Laszweski said he also received an ominous email from one large insurer that has been "my bellwether" for Obamacare trends.

That insurer told him that many of its customers who had been automatically re-enrolled for 2016 by the government-run exchanges look like they will be canceling their plans. The same insurer expects to cancel a significant number of plans for new enrollees because they failed to pay their first month's premium in January, Laszewski said.

Laszewski said that while Obamacare has done a good job of enrolling people with lower incomes, who qualify for federal subsidies that can sharply reduce the cost of their plans, it has not done a good job of luring middle-class customers, who often find the premium prices and deductible limits unattractive.

And "what's really obvious," he said, is that the Obamacare fine is not doing much to spur customers to sign up. That fine is growing this year to the higher of $695 per person or 2.5 percent of household income.

Federal officials did not release data about the actual number of customers who signed up in the final week or last few days. Lori Lodes, a spokeswoman for the federal Centers for Medicare and Medicaid Services, said those details will be disclosed later this week.

Lodes said: "It's been a good year. Compared to last year, more consumers are signed up for coverage, more consumers actively renewed their plans and more consumers had a smooth experience at HealthCare.gov." That website is the federal Obamacare exchange that services 38 states.

"As expected, last week we experienced a steady ramp up of interest as we neared the final deadline; with interest peaking in the final day. Even as late as 11 p.m. last night [Sunday], there were about 80,000 people shopping for coverage" on HealthCare.gov, she said.

But several Obamacare observers said that the "smooth experience" seen on HealthCare.gov suggests that the sign-up traffic wasn't at levels experienced during last year's deadlines, when HealthCare.gov and several other exchanges had trouble processing sign-ups due to heavy volumes.

"There was definitely some sort of bump" in the last week, but "it's definitely a smaller bump," said Charles Gaba, the Web developer who runs the Obamacare enrollment tracking site ACASignups.net. He cited the fact that "HealthCare.gov never went down" as the basis for that belief.

Gaba last week released his final projection for 2016 open enrollment, estimating that between 12.4 million and 12.9 million people will have signed up. That's up to 2.3 million lower than what he had originally projected for this year.

"I was more optimistic" before, he said.

Mario Schlosser, co-founder and CEO of Obamacare insurer Oscar, said that sign-up traffic at his company on the deadline day of Sunday was about 10 times what it sees on a normal day.

But Schlosser also said that the sign-up tally last week "was 75 percent of the" rate seen in mid-December, the previous major deadline during this enrollment season.

"In the previous year, the final [deadline] was the biggest one, by a larger margin," as opposed to the December deadline, said Schlosser, whose company this year sells plans in its home of New York state and in New Jersey, California and Texas.

Schlosser said the drop-off suggests that more Obamacare customers are becoming "switchers" — people who shift coverage from one insurer to another — as opposed to being new enrollees.

"I think this year is the start of that," he said. While Schlosser had expected that change to happen at some point in the future, "It wasn't clear that it was going to happen this year."

Chini Krishnan, CEO of the Web-based insurance brokerage GetInsured, said, "We had a pretty phenomenal week last week," which exceeded the sign-up levels seen during the last week of 2015 open enrollment.

"There was a very substantial uptick in that last week," Krishnan said.

He said other sectors of the Obamacare market might have had less impressive results in the final week, but also expressed optimism about the long-term trend for Obamacare plans. saying he expected enrollment to grow steadily in the future.

Krishnan noted that other government-administered health programs, such as Medicaid, have taken many years "to reach their full potential."