Obamacare Enrollment Grew the Fastest in These 5 States
Enrollment in Obamacare may not yet be living up to the Department of Health and Human Services' lofty expectations, but it's clear that the combination of a working federal health exchange, improved awareness of the law, and the approaching March 31 coverage cutoff deadline for obtaining health insurance coverage in 2014 are encouraging citizens to sign up in increasing numbers.
According to data released Wednesday night (link opens PDF), total enrollments for January surged by 1.146 million people to nearly 3.3 million, a gain of 53% between Dec. 29 and Feb. 1. The data from HHS and the Centers for Medicare and Medicaid Services also showed that young adult enrollment increased by 3 percentage points to 27% from January. Additionally, the monthly report notes that 63% of people who are currently uninsured intend to obtain health insurance.
Source: Centers for Medicare and Medicaid Services.
For all intents and purposes there has been a dramatic reversal of the technical issues that plagued the online insurance marketplaces from two months ago. But even now there are certain regions and states where enrollment is surging more strongly than others.
Five states where enrollments grew the fastest
Following some tedious calculations on my part I've uncovered the top five states in terms of total enrollment gains from Dec. 29 to Feb. 1, as well as those states that delivered the best percentage gains over the prior month. I feel both are important calculations as they offer clues as to which regions are effectively promoting the Affordable Care Act, and how those gains could translate to advantages for select health care companies.
First, here are the five states that saw the biggest aggregate enrollment gains:
Total Enrollment Gain
Source: Department of Health and Human Services, aggregate enrollment gains from Dec. 29 to Feb. 1, author's calculations.
The above results aren't too surprising given that states with larger populations should be expected to deliver a greater number of enrollments. As we've witnessed in previous months, blue states, or those that have traditionally sided with the Democratic Party, saw strong gains. Yet we also saw a very strong enrollment surge from Florida and Texas, two states that haven't exactly been big supporters of Obamacare as a whole.
Now let's look at which states demonstrated the largest percentage increase in enrollments on a month-over-month basis.
Enrollment % Gain
Source: HHS, author's calculations.
Perhaps the first thing that stands out to me is that in spite of having huge populations, Florida and Texas absolutely crushed the national enrollment growth average of 53%. Both states use Obamacare's federal insurance marketplace, Healthcare.gov, and their citizens are now reaping the benefit of a fully functional exchange. This doesn't mean that Healthcare.gov is completely glitch-free, but the basics of the website allow citizens in all 36 states using the service to complete their enrollment online.
Another interesting tidbit that really stood out, especially if I backed out this data to the top 10 states, is that the Gulf Coast region, made up of states that generally don't support the Democratic Party, delivered some of the most impressive gains. Mississippi's enrollment surged nearly 116%, Florida and Louisiana gained 88% and 87%, respectively, Texas added 75%, Georgia saw enrollment up 73%, and South Carolina's sign-ups jumped 71%. Even the laggard of the group, Alabama, met the national average with enrollment growth of 53%. I would presume that a number of fixes in Healthcare.gov, coupled with improved education of the law in this region, has worked positively to fuel enrollment growth.
Source: White House on Flickr.
How this can help you invest better
I fully admit to being a numbers guy and enjoying the dissection of data on a state-by-state basis. You, though, are likely wondering how this data could be of any pertinence to your portfolio. The good news is these new numbers could give us clues as to which health care companies could benefit from this latest enrollment surge.
One company that I've worried about recently that should be thrilled with this HHS release is hospital provider Tenet Healthcare . Tenet did help its cause by purchasing Vanguard Health Systems in 2013 for $1.73 billion, adding geographic diversity to its portfolio, but otherwise found itself mired in a number of red states that chose not to expand their Medicaid programs. My concern had been that fewer fresh Medicaid-eligible enrollees in these states would hamper Tenet's ability to reduce its doubtful revenue collection. However, Tenet has a strong presence in Texas and the Gulf Coast where enrollments grew the strongest on a percentage, and in some cases aggregate, basis in January, lending some potential relief to my worries.
Another possible instant winner here is Medicaid-based insurer Centene , which offers health plans in states including Texas, Mississippi, Georgia, Florida, Louisiana, and South Carolina. Although the latest HHS report isn't too specific about Medicaid growth, the previous month's note from CMS administrator Marilyn Tavenner pointed to roughly 6.3 million Medicaid and CHIP eligible enrollees as of late January. I believe an inference can be made here that with strong total enrollment in the South and Southeast U.S. that there's a good chance Centene's membership figures will benefit.
Heading into the homestretch
We're entering what might be referred to as the homestretch for Obamacare with the March 31 coverage cutoff date fast approaching. In a matter of weeks all of the speculation will finally melt away and we'll have a much better idea of how successful Obamacare has been at not only reducing the number of uninsured in this country, but also in setting us up for lower long-term health insurance premium inflation. Needless to say, if you're a health care investor, things are about to get interesting.
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The article Obamacare Enrollment Grew the Fastest in These 5 States originally appeared on Fool.com.
Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool has no position in any companies mentioned in this article. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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