November 23, 2013
Analysis: Two New Obamacare Delays Portend Looming Failures
Friday news dump, folks. Delay number one:
With the rollout of President Obama's health care law plagued by technological problems, the Centers for Medicare and Medicaid Services announced on Friday that the administration is extending the date for individuals to enroll in health care plans. As things stood prior to the announcement, individuals who wanted to be covered by Jan. 1 had to pick a plan by Dec. 15. That date has now been pushed back to Dec. 23, CMS spokeswoman Julie Bataille announced on a conference call. The CMS technology team and outside contractors have been racing to make fixes to the Healthcare.gov federal insurance exchange website and its related systems to meet the goal of it working smoothly for a “vast majority of users” by Nov. 30. A reason for the urgency was that they wanted the website to be able to handle the expected post-Thanksgiving surge of individuals attempting to sign up for coverage by the end of the year.
Translation: They're going to miss their November 30 deadline, which is no surprise in light of recent comments from President Obama and Secretary Sebelius. Is tacking on this extra week of breathing room even workable at the insurers' end? Meh, whatever:
This tweak may end up in the same category of the president's Obamacare "fix:" Desperate and impractical. Many states are rejecting Obama's latest "keep your plan" ploy as logistically infeasible and undermining to the exchanges' risk pools. The administration is making things up as they go along and scrambling to clean up after their endless string of missed deadlines. Onto delay number two, which Katie covered this morning:
The Obama administration plans to push back by a month the second-year start of enrollment in its health program to give insurers more time to adjust to growing pains in the U.S. law, a move that may stave off higher premiums before the 2014 congressional elections. The enrollment period, previously scheduled to begin Oct. 15, 2014, will now start Nov. 15, said an official with the U.S. Department of Health and Human Services who asked not to be identified because the decision isn’t public. The change is important to insurers that need more time to evaluate the first year of the government-run marketplaces.
Many conservatives are correctly lambasting this ploy as a transparent effort to push back some of next year's sticker shock until after the midterm elections, but there's more to the story. I discussed the implications of the administration's announcement with Gretchen Carlson on Fox News this afternoon:
The White House can't shield Democrats from the next round of cancellation notices, nor can they block the announcement of looming rate increases. What they can do, and have done, is postpone the enrollment period itself until after the election -- so consumers won't actually confront their new costs in black-and-white until the elections are in the rearview mirror. Rate shock will be an inescapable reality, but this maneuver will deprive the media of harmed victims to profile. Everyone will know bad news is coming, but Democrats will be spared an overwhelming wave of stories about family X whose coverage was dumped, resulting in premium and deductible increases of Y amount. As I said on Fox, this scheme represents a pair of damning admissions by Team O: First, they're basically conceding that costs are going to go up -- possibly way up -- next year. If the "Affordable" Care Act were actually affordable, they'd want the new, lower rates front and center ahead of the election to showcase the law's success. Instead, they're doing everything they can do bury its results. Second, this delay gives insurers more time to assess and set rates for 2015. This strongly suggests that the current Obamacare exchange pools are indeed disproportionately skewed toward the young and sick -- a recipe for adverse selection disaster. This spring, industry actuaries will be crunching numbers and determining how much rates should rise to compensate for the legally-required influx of higher-cost customers (or to exit the exchanges altogether). The White House is hoping that 'young invincibles' will finally sign up in March or April, quelling panic among insurers, and holding down cost spikes. If the administration weren't very worried about the demographic composition of these pools, today's announced postponement wouldn't be necessary. Bottom line: This law is failing. The White House knows it, and they're pulling out all the stops to both salvage the policy mess and limit Democratic losses at the polls. http://townhall.com/tipsheet/guybenson/2013/11/22/analysis-two-new-obamacare-delays-speak-volumes-n1751742