Enrollment in the insurance exchanges for President Barack Obama's signature health care law is at less than half the initial forecast, pushing several major insurance companies to stop offering health plans in certain markets because of significant financial losses.
As a result, the administration's promise of a menu of health plan choices has been replaced by a grim, though preliminary, forecast: Next year, one in four counties is at risk of having a single insurer on its exchange, said Cynthia Cox, who studies health reform for the Kaiser Family Foundation.
Debate over how perilous the predicament is for the Affordable Care Act, commonly called Obamacare, is nearly as partisan as the divide over the law itself. But at the root of the problem is this: The success of the law depends fundamentally on the exchanges being profitable for insurers — and that requires more people to sign up.
In February 2013, the Congressional Budget Office predicted that 24 million people would buy health coverage through the federally and state-operated online exchanges by this year. Just 11.1 million people were signed up as of late March.
Exchanges are marketplaces where people who do not receive health benefits through a job can buy private insurance, often with government subsidies.
"Enrollment is key, first and foremost," said Sara Collins, a vice president at the Commonwealth Fund, a nonpartisan foundation that funds health care research. "They have to have this critical mass of people so that, by the law of averages, you're going to get a mix of healthy and less healthy people."
A big reason the CBO projections were so far off is that the agency overestimated how many people would lose insurance through their employers, which would force them into the exchanges. But there have been challenges getting the uninsured to sign up, too.
The law requires every American to get health coverage or pay a penalty, but the penalty hasn't been high enough to persuade many Americans to buy into the health plans. Even those who qualify for subsidized premiums sometimes balk at the high deductibles on some plans.
And people who do outreach to the uninsured say the enrollment process itself has been more complex and confusing than Obama's initial comparison to buying a plane ticket.
"This exchange will allow you to one-stop shop for a health-care plan, compare benefits and prices, and choose a plan that's best for you and your family," Obama said in a speech in 2009. "You will have your choice of a number of plans that offer a few different packages, but every plan would offer an affordable, basic package."
In some markets, a shortfall in enrollment is testing insurers' ability to balance the medical claims they pay out with income from premiums. In an announcement curtailing its involvement in the exchanges this month, Aetna cited financial losses traced to too many sick people signing up for care and not enough healthy ones.
The health care law has been a political lightning rod from the beginning, and Republican legislators have used insurance companies' withdrawals from the exchanges to reignite calls for the law's repeal.
Kaiser tracks public data on insurer participation in the exchanges to project how many options counties will have, but the numbers are not final. This year, exchanges in about 7 percent of counties had just one insurer. This month, Aetna announced that it will pull out of 11 of the 15 states where it offers coverage on the exchanges. Humana made a similar decision weeks earlier, planning to exit several states. And last spring, UnitedHealth Group said it would remain in three or fewer exchanges next year.
Obama has used the health care law's challenges to issue a new call for a public insurance option.
"Congress should revisit a public plan to compete alongside private insurers in areas of the country where competition is limited," he wrote in an essay published in the Journal of the American Medical Association. "Adding a public plan in such areas would strengthen the Marketplace approach, giving consumers more affordable options while also creating savings for the federal government."
Chicago resident Eva Saur, 32, is exactly the kind of healthy person insurers would like to have on their rolls. Saur hasn't had coverage in nearly a decade, but she takes good care of her health. For the handful of times she has been sick, a walk-in clinic at a pharmacy has been sufficient.
"For me, monetarily, it makes way more sense to do this," she said.
Saur's tax penalty for being uninsured was a bit more than $600 last year, while the cheapest health plan she examined cost about as much for three months in premiums — and came with a $7,000 deductible.
The penalty for not signing up is increasing. Still, some policy experts insist it is not enough motivation to buy insurance.
"It was basically no stick at all. This is the classic case of where Johnny marked crayon on the wall, his mother said, 'Don't do that' and then slapped his hand a day later," said Joseph Antos, a resident fellow at the American Enterprise Institute. "The connection between the offense and the penalty is a little remote."