Streisand ef­fect boosts Oba­macare en­roll­ment

Woonsocket Call - - Opinion -

Don­ald Trump wants Oba­macare to im­plode. That's not a mis­chievous inference from his leg­isla­tive mis­ad­ven­tures; that's a di­rect quote. "As I said from the be­gin­ning, let Oba­maCare im­plode, then deal. Watch!" he tweeted in July.

It's thus some­what sur­pris­ing that on his watch, en­roll­ment cur­rently seems to be on track for its best year ever. In the first four days, 601,462 peo­ple signed up for in­sur­ance through the fed­eral mar­ket­place, a sig­nif­i­cantly faster pace than in ear­lier years. And al­most a quar­ter of them were new to the ex­changes.

This is prob­a­bly not what you ex­pected. It's not what I ex­pected. Pre­mi­ums are ris­ing, in­sur­ers are pulling out, and the ad­min­is­tra­tion seems some­what un­in­ter­ested in en­cour­ag­ing peo­ple to en­roll, hav­ing short­ened the open en­roll­ment pe­riod and de­funded the cost-shar­ing sub­si­dies for low-in­come en­rollees.

None­the­less, open en­roll­ment seems to be go­ing swim­mingly. Four days of data are not enough to draw de­fin­i­tive con­clu­sions, but I can out­line some fac­tors that could be con­tribut­ing to this un­ex­pected spike in en­roll­ment.

The first pos­si­bil­ity is that the very fail­ures in the ex­change are, per­versely, mak­ing it more at­trac­tive. Briefly: Pre­mium in­creases have fallen es­pe­cially heav­ily on the "bench­mark" plans, the sec­ond-low­est-cost Sil­ver plan avail­able on a given ex­change. Pre­mi­ums for Bronze, Gold and Plat­inum plans have also gone up, but not so much. But be­cause the pre­mium sub­si­dies are cal­cu­lated based on that bench­mark plan, this has the odd side ef­fect of mak­ing the other plans more at­trac­tive, at least to those el­i­gi­ble for a sub­sidy. For many of them, the cost of a Gold plan, which cov­ers 80 per­cent of ex­pected health-care ex­penses, may ac­tu­ally be cheaper this year than it was last year — not be­cause the cost of the plan fell but be­cause the sub­si­dies rose so much. And many young, healthy peo­ple can get a Bronze plan, which cov­ers 60 per­cent of "ac­tu­ar­ial value," for prac­ti­cally peanuts.

We could also be see­ing the Streisand ef­fect. In 2003, singer Bar­bra Streisand no­ticed that pho­to­graphs of her Mal­ibu man­sion were avail­able on the in­ter­net, but her failed quest to get them re­moved no­ti­fied a pre­vi­ously un­sus­pect­ing pub­lic that they ex­isted. Many, many more peo­ple looked at im­ages of that house than would have if she'd kept her mouth shut.

Sim­i­larly, the last year of high-pro­file at­tempts to re­peal Oba­macare may have re­minded folks that Oba­macare ex­ists. That may seem crazy to any­one who fol­lows pol­i­tics closely, but most peo­ple don't. They may have been too wrapped up in their daily lives to pay much at­ten­tion to open en­roll­ment but, hav­ing seen "Oba­macare!" splashed across the news for six months, fi­nally de­cided to check it out when the ex­changes opened for busi­ness.

To this we may add a phe­nom­e­non known as the en­dow­ment ef­fect. Psy­chol­o­gists have no­ticed that once peo­ple have some­thing, they value keep­ing it more than they val­ued get­ting it in the first place.

The threat to take Oba­macare away may have trig­gered the en­dow­ment ef­fect. This would ex­plain why the pub­lic's opin­ion of the pro­gram dra­mat­i­cally im­proved once Repub­li­cans took of­fice and promised to make good on their vow to re­peal it. And that "strange new re­spect" may also have made peo­ple more in­ter­ested in ac­tu­ally sign­ing up.

On the other hand, per­haps they're afraid that Oba­macare will go away next year so they're mak­ing darn sure to sign up and get as many treat­ments as pos­si­ble, in case the ex­changes die. We've seen signs of sim­i­lar strate­gic gam­ing in ear­lier years: peo­ple who signed up, used a lot of ser­vices and then can­celled their poli­cies, leav­ing in­sur­ers on the hook for bills that were far in ex­cess of any pre­mi­ums col­lected.

Then there is the most pro­saic pos­si­bil­ity: Sign-ups have gone up in the first week of en­roll­ment be­cause the en­roll­ment pe­riod is shorter this year. Con­scious of the loom­ing dead­line, peo­ple per­haps didn't want to risk miss­ing the win­dow. Around Christ­mas we'll have a bet­ter idea whether this rep­re­sents a new high for the ex­changes, or just slightly con­densed busi­ness as usual. McAr­dle is a Bloomberg View colum­nist.

Bloomberg View

Megan McAr­dle

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