More than 8 million people enrolled in private health insurance under Obamacare for 2014, topping expectations despite a rocky start. But that's less than one-third of the number of people who could have signed up -- a sign of the huge untapped market for Obamacare coverage and the challenges still facing the program.
In their first year, the Affordable Care Act's insurance exchanges signed up 28 percent of the people eligible to use them -- mainly people who don't get health benefits from their jobs or from a government program like Medicare or Medicaid -- according to an analysis by the Henry J. Kaiser Family Foundation.
And there was a lot of variation among the states: Some captured a big share of the market for these customers and others barely made a dent, as this map illustrates:
Infographic by Jan Diehm for The Huffington Post.
Using data from the Census Bureau and the Department of Health and Human Services, the Kaiser Family Foundation estimates 28.6 million U.S. residents are eligible to buy health insurance via an exchange, compared to the 8 million who did.
Growing the insurance exchanges created by President Barack Obama's health-care reform law is key to continuing to shrink the ranks of the uninsured and to enrolling a broad and diverse population of customers that can spread the cost of the sickest patients across a large number of people.
The foundation's analysis includes people who remain uninsured and people who buy their insurance directly from an insurance company without accessing the exchange or applying for financial aid. The estimate excludes people who qualify for Medicaid, and those who aren't allowed to use an exchange, such as undocumented immigrants and workers who turn down their employers' health plans. It also excludes people who live in states that didn't expand Medicaid and who earn too little to qualify for subsidized private insurance.
The early enrollees also are seen as those in greatest need: They had pre-existing conditions that shut them out of the pre-Obamacare market, qualified for subsidies available to people who earn up to four times the federal poverty level -- about $94,000 for a family of four -- or both. Eight-five percent of the 8 million people who enrolled received tax credits that reduced their monthly premiums, and millions more who didn't sign up for the financial assistance are eligible.
People who earn too much to get financial help or are eligible for only small subsidies may have preferred to avoid the exchanges, especially given their glitches. And insurers in some states offered products outside the exchanges with more choices of providers and other features.
The technical failings of the federal HealthCare.gov website and several state-run exchanges hampered exchange enrollment, driving some consumers to buy directly from an insurance company, even if they might have gotten subsidies on an exchange. Poor public understanding of how the exchanges worked, and especially about the availability of financial assistance, also depressed enrollment.
The share of the potential market that signs up through an exchange is expected to grow. Enrollment on the exchanges for next year begins again Nov. 15 and runs until Feb. 15, and millions more people are expected to use these marketplaces to shop for coverage. By 2017, the Congressional Budget Office projects, 25 million people will get their health insurance this way, including those who get subsidies and those who don't.
Websites that actually work would boost enrollment. More choices of insurance companies in most states, modest premium increases for a significant number of plans and the ability to comparison-shop should lure more consumers to explore the exchanges. And people who were allowed to keep their pre-Obamacare insurance this year after having it canceled will have to transition eventually to plans that meet the law's benefit standards.
What's more, the minimum penalty for not complying with Obamacare's individual mandate that nearly everyone be covered jumps from $95 this year to $325 in 2015.
Policy decisions made by state leaders partly account for the wide variation among states.
"States that wanted to make the law work clearly did better than states that didn't. It's not a one-to-one correspondence, but it's a strong effect," said Larry Levitt, senior vice president for special initiatives at the Kaiser Family Foundation.
Seven of the top 10 states had exchanges that were either state-operated or jointly run by the state and the federal government. That includes California, which signed up 1.4 million people, or almost 43 percent of the potential market.
But a large share of eligible Floridians signed up via the federal exchange, owing to concentrated efforts by the Obama administration and enrollment organizations, Levitt said. The troubles with the state-run exchanges in Minnesota, Maryland and Hawaii put them in the bottom 10, along with the federal-state partnership exchange in Iowa.
The ranking also reveals some peculiarities among the states. Vermont consolidated more than 85 percent of its individual health-insurance market into its exchange, largely because that state and the District of Columbia are the only jurisdictions that don't let consumers buy insurance another way.
In Iowa and South Dakota, the company that had the most customers before Obamacare, Wellmark Blue Cross Blue Shield, didn't participate in the exchanges. The federal marketplaces in those states was denied the biggest player's marketing muscle, and Wellmark customers inclined to stay with the company didn't use the exchanges, Levitt said. Wellmark is joining the Iowa and South Dakota exchanges for 2015.
Massachusetts has had an insurance exchange since 2006 and near-universal coverage before Obamacare, leaving a small pool of people not already participating. And the state's exchange website performed poorly.
Although the exchanges will attract more customers next year and in the future, there are obstacles, Levitt said.
The 2015 enrollment period is just three months, half the duration of the 2014 sign-up window, and there will be fewer resources available to help people with the application process. Federal and state authorities also will have to devote efforts to retaining current customers. And there will be less publicity about the exchanges the second time around because it's no longer novel. Plus, the people who didn't sign up already may be the most challenging to enroll, Levitt said.
"It's going to be a lot harder for the program to exceed expectations in the second year than in the first year -- and the first year was plenty hard," Levitt said.