Next up: Obamacare worst-case scenario?
By: David Nather
December 6, 2013 04:59 AM EST
Enrollment surge or no enrollment surge, the next Obamacare challenge is a big one: How will the White House make sure all those people with canceled policies get new coverage by Jan. 1?
At the rate the signups are going — even with the speedier, newly functioning Obamacare website — the administration has a vast distance to travel before the estimated 4 to 5 million people with canceled policies get new health coverage.
In fact, health care experts say, it’s not out of the question that the Obama administration could face the worst-case scenario on Jan. 1: the number of uninsured Americans actually goes up.
That’s a long shot, and there are plenty of reasons why it might not happen, since there are other ways those people could replace their health coverage, like signing up directly with insurers. Not all of the policies will expire in December. And even if the ranks of the uninsured did increase, it could be such a brief event that no one would ever be able to confirm it.
But even with all the variables, one thing is for certain: the Obama administration has one seriously long road to travel from the signups it has now to the number who will likely need to replace their coverage. That’s a bad place to be, given that the point of the law was to cover more people, not fewer people.
“It’s hard to know [the outcome], but it’s hard to see how it’s not a heavy lift given the numbers,” said Gail Wilensky, who ran the Medicare agency under the first President George Bush.
Ron Pollack of Families USA believes the “overwhelming majority” of people with canceled policies will be able to replace it. But even Pollack, one of the law’s most vocal supporters, concedes: “That does not mean 100 percent, because you never get 100 percent.”
Administration officials say they’re not concerned. The new, improved website can handle 800,000 visitors a day, they say, which allows plenty of capacity to help all of the people who need to replace their coverage — if they use the federal website. And some, though not all, will be able to extend their current health insurance now that the administration is allowing insurers to offer that option.
“Anyone who selects a plan by Dec 23 and pays by the date set by the insurer will have coverage by Jan. 1. The site can now handle at least 800,000 visitors a day and is stable,” said Joanne Peters, a spokeswoman for the Department of Health and Human Services.
“We are seeing consumers apply and enroll in coverage, and expect enrollment to increase given all of the technical improvements we have made to the site. Additionally, [the Centers for Medicare and Medicaid Services] is reaching out to consumers who may be having difficulty to help them with next steps,” Peters said.
The most likely outcome is that some people will get coverage through the health insurance exchanges, some will get it directly through their old insurers, and some will get extensions on their old health insurance. All of the dominoes would have to fall the wrong way for the number of uninsured people to go up.
But if there’s one thing the health care rollout has specialized in so far, it’s dominoes falling the wrong way. That’s why health care experts can’t rule it out. And even a small number of people who can’t replace their coverage — and end up uninsured on Jan. 1 — would send Obamacare right back into P.R. hell.
The math, roughly, works like this. During the slow, balky month of October, 106,000 people selected health coverage through the federal HealthCare.gov enrollment site and the state websites, according to administration estimates. Another 400,000 were determined to be eligible for Medicaid. Add to that the 100,000 or so who signed up through HealthCare.gov alone in November, according to Bloomberg — assuming that number is at least in the ballpark — and the surges in state enrollment that are still being tallied.
And the enrollment does seem to be taking off on HealthCare.gov since the relaunch this weekend, as POLITICO reported that 29,000 people signed up on Sunday and Monday alone.
But by the best insurance industry estimates, as many as 4 million to 5 million people have gotten cancellation notices because their individual health insurance doesn’t meet Obamacare standards — meaning they’ll have to replace their health coverage. Even if the new, post-repair rate of signups continued at the faster pace, HealthCare.gov — the enrollment site that covers 36 states — would still be lucky to enroll 450,000 people by the end of December.
That pace certainly could speed up, and could even take off rapidly. It’s still early December, after all, the site has just been relaunched, and a lot of people who have just been browsing health plans may wait until later in the month to sign up. And not everyone who needs Obamacare coverage will use the federal website — some will use the state websites that are being run by 14 states and the District of Columbia.
And there’s an important qualifier: Not everyone with a canceled plan will need to replace it by Jan. 1. Some of those policies won’t expire until sometime next year, health insurance officials say.
But that still leaves a long way to go between the pace of enrollments now and the number the Obama administration will need to truly expand health coverage. Health and Human Services Secretary Kathleen Sebelius has said a “realistic target” is to cover 7 million people in the health insurance exchanges in 2014 — although she said that before the scope of the canceled policies problem became known, and administration officials have since backed away from setting enrollment targets.
“The arithmetic says that if they cannot, for mechanical reasons, sign up at least enough to replace those who lost individual coverage we will end up with a net increase in the number of uninsured,” said Mark Pauly, a conservative health economist at the University of Pennsylvania.
President Barack Obama offered his solution to the problem last month, by allowing health insurance companies to extend individuals’ policies for another year. The problem, though, is that not all states are allowing insurers to do that. Administration officials say 27 states are cooperating with the policy, but roughly another 20 have rejected the fix — including California and New York, two of the trailblazers in implementing Obamacare, according to a tally by America’s Health Insurance Plans. And even in states that will allow the extensions, not all insurance companies will go along.
Not everyone is worried. There are a lot of ways for people to replace their coverage, and not all of them involve the website. Some insurers will extend their policies. For those that don’t, they’re offering replacement policies — ones that comply with the law’s new benefit standards — to the people with canceled plans. Those may not always be the best bargains people could find if they shopped around, but they’d be available in a pinch.
Sabrina Corlette of Georgetown University’s Health Policy Institute said it would be “a stretch” for the number of uninsured people to actually go up, since people can just enroll in new coverage directly, either through their current insurer or through a different one. They might not be able to get subsidies if they qualify, she said, but there’s no danger that they’d be rejected — because Obamacare now requires insurers to accept anyone with pre-existing conditions.
And it won’t be possible to track the number of people who sign up directly through insurers, because “we have zero data on signups outside of the exchanges,” said Larry Levitt of the Kaiser Family Foundation. He also noted that some of the people with individual insurance will move into jobs with group health insurance, since that happens a lot in the individual market — though that’s not likely to happen for a lot of people before Jan. 1.
It will become immediately obvious if people are falling through the cracks, of course, since anyone who doesn’t get coverage by the time their health insurance expires will make noise about it — and so will members of Congress.
But there won’t necessarily be a way to know if they outnumber the people who have successfully signed up. Judy Solomon of the left-leaning Center on Budget and Policy Priorities notes that “there is no ‘real time’ measure of uninsurance,” so if there was a short-term spike in the number of uninsured people, it would be impossible to confirm it.
Joe Antos of the American Enterprise Institute believes there could be a rise in uninsured people by January, because there will be a rush to enroll on HealthCare.gov in the last week before Dec. 23 — the deadline to get coverage by Jan. 1 — and that will slow down the website again. But because the official figures on uninsured people won’t be collected until March, he said, “the bulge might recede by then.”
Anyone who’s caught in that situation may have to rely on insurers’ self-interest in not losing them as customers. That’s a big leap of faith, given the well-known joys of dealing with health insurance bureaucrats. But some insurers say they’ll work with those customers to make sure they’re not just cut off if they walk into a doctor’s office on Jan. 2.
Kaiser Permanente, for example, doesn’t have the option to extend people’s policies beyond Jan. 1, because California isn’t allowing extensions. But it doesn’t make much difference, company officials say, if a customer’s health plan ends and they sign up for another Kaiser Permanente policy later — the only thing that would matter would be working out the new copayments and deductibles when the bill has to be paid.
It would matter, of course, if those customers later signed up with a different health insurer. But “it behooves health plans to cover consumers now and have faith that it all reconciles down the road,” said Kaiser Permanente spokesman Chris Stenrud. “The last thing we want to do is chase away members who have already chosen us or people who are on the fence about staying with us.”