Obamacare and the 80-20 Rule

The 80-20 rule, also known as the Pareto Principle, says that 80 percent
of results are often the result of just 20 percent of actions. That
seems to be the case with Obamacare. New data suggests that 80 percent
of the newly insured came from just two changes made under the law.

New data published by the LA Times shows that 9.5 million previously uninsured people have gained insurance under Obamacare. Nearly half, 4.5 million, were the result of the Medicaid expansion which raised eligibility to 138% of the federal poverty line. This expansion was always expected to add millions to the Medicaid rolls as well as drum up people who had been previously eligible but had not signed up for various reasons. And since Medicaid recipients get their care for free, there was no need for an individual mandate to force them to purchase it.

The next largest group of newly insured, according to the data published by the Times, came from young adults joining their parents insurance up to age twenty-six. This group accounts for 3 million of the 9.5 million total.

Adding young adults to their parents insurance has long been one of the most popular and least contentious elements of Obamacare. In fact, prior to Obamacare 10 states–New Jersey, Colorado, Illinois, New Mexico, South Dakota, Texas, Utah, Connecticut, Illinois and Florida— had already passed laws which allowed young adults to stay on their parents insurance, in some cases up to age 30.

The remaining 2 million newly insured came through the Obamacare exchanges. That’s about a third of the 6 million plus the administration claims have signed up. The actual number will be 20 percent lower because some people won’t actually pay a premium, but the percentage of previously uninsured should be similar.

If the new data is accurate, about 7.5 million of the 9.5 million newly insured (79 percent) got their insurance through two changes that could have been made with far less disruption. All the millions of cancellations, the broken website, the changing deadlines, the President’s lies about keeping plans and doctors people liked–we might have had 80 percent of the gain with significantly less pain.