22% of Obamacare Enrollees Dropped Coverage this Year

More than 20 percent of the people who signed up for Obamacare plans on state and federal exchanges for 2015 have since dropped their coverage.

Earlier this year, the Obama administration reported that 12.7 million had signed up for insurance on the exchanges. Roughly 22 percent of those individuals have since dropped coverage for various reasons, leaving 9.9 million paying customers on the exchanges as of the end of June.

The number of paying customers is still declining but will be in the range of 9.1-9.9 million, which the Obama administration said was their enrollment estimate for 2015. That estimate is significantly below earlier CBO projections which projected enrollment of around 13 million by the end of 2015.

One factor that impacted the decline was cutting off 423,000 enrollees who were unable to provide proof of citizenship. Non-citizens are prohibited from purchasing insurance through the Obamacare exchanges.

Even if the enrollment does meet revised projections for 2015, enrollment will need to double to meet the 21 million projection for next year. Some analysts predict enrollment will jump as the full force of the mandate kicks in for 2016 (a penalty of $695 or 2.5 percent of income). However, price spikes in the marketplace could offset this incentive.

The individuals already enrolled in Obamacare are overwhelmingly from the lower end of the income spectrum. That means growth must come from those who are somewhat better off and who are therefore eligible for smaller (or no) subsidies. In other words, the people yet to enroll in Obamacare are those who will most keenly feel any price spikes.