ObamaCare: 5 Land Mines Dead Ahead For Health Law
By JOHN MERLINE, INVESTOR'S BUSINESS DAILY
Posted 08:02 AM ET
With support for ObamaCare hitting all-time lows, the administration continues to cling to one bit of good news — the federal exchange website is working better than before.
Healthcare.gov is "night and day compared to where we were back in October," Health and Human Services Secretary Kathleen Sebelius told a House committee last week. And the insurance industry — which didn't want to send people to a bug-filled website — is starting to unleash various ad campaigns.
But getting people to enroll is just one of many problems facing ObamaCare. Several other land mines could cause further damage over the next year. The big ones looming ahead:
Coverage isn't there. Recent reports indicate that while the front end of the exchange website is working better, the back end continues to be error-prone, meaning insurers will have a hard time processing applications by Jan. 1.
The Washington Post reported this week that thousands of enrollment forms didn't make it to their insurers, and there's still a huge backlog of paper applications waiting to be processed.
State-run exchanges are having problems, too. Many Californians who signed up through the state exchange say their insurers never got those records. As a result, they can't pay their premiums to make sure their coverage starts in two weeks.
Sebelius tried to downplay any such problems at last week's hearing. "People will be enrolled," she said.
The young stay away. While the administration and state governments aggressively promote ObamaCare to young people, early results show that exchange enrollment is skewing decidedly older. That will drive up insurance costs for those buying an ObamaCare plan.
In California, for example, just 21% of the sign-ups through November were 18 to 34 years old, although this age group accounts for 39% of the state's ObamaCare eligible population. In contrast, 35% of enrollees were 55-64, more than twice their share of those eligible to enroll.
In addition, ObamaCare's requirement that plans cover dependent children up to age 26 will deter many from buying coverage on their own.
People game the system. The industry warned the Obama administration late last year about another, little noticed, land mine — people who game the new insurance rules to minimize their costs. Healthy people could, industry officials noted, "float" uninsured until they get sick, and only then sign up, knowing they can get coverage guaranteed and at subsidized rates.
The industry also warned that, under the law, someone could sign up, fail to pay premiums, and then simply re-enroll — even with the same company — at the next open enrollment.
"The ACA does not include a provision to allow issuers to refuse to cover individuals with a history of non-payment," Howard Shapiro, public policy director at the Alliance of Community Health Plans, told regulators.
Small businesses escape. Looking for ways to avoid ObamaCare's costly rules and regulations, small companies are increasingly exploring self-insuring — something that had been the province of larger companies.
Self-insured companies pay their employee health costs directly, and usually buy stop-loss coverage to protect against massive health bills.
Insurers are more aggressively marketing this option to small companies, and an Urban Institute analysis concluded that because of ObamaCare, 40% of employees at small firms could end up in self-insured plans.
ObamaCare advocates worry that if companies with younger, healthier employees self-insure, that will leave the remaining ObamaCare insurance pool older, sicker and more expensive.
"It would undermine key protections for small-business employees and increase costs for other small businesses," warned the liberal Center for American Progress, which wants the government to close off this avenue of escape.
Employers dump health plans. Companies are already dialing back coverage, either by shifting workers to part-time or cutting back the number of employees, as IBD has been cataloging for some time.
These trends are likely to accelerate next year as companies confront the employer mandate, now scheduled to go into effect in 2015. At the same time, many smaller companies will find their current plans canceled because of ObamaCare, leaving them to choose between buying costly approved plans or dropping their health benefits altogether.
The result could be waves of workers pushed into the government-run exchanges for health insurance next fall.
President Obama has on many occasions since Oct. 1 said that ObamaCare "is more than just a website."
That's true. But so are the problems facing the law.