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Insurance Networking News: Obamacare Sign-Up Ends as It Began With Crashes, Challenges

April 1, 2014
News Stories
Insurance Networking News (via Bloomberg) - Caroline Chen, Margaret Talev, and Alex Wayne
The first phase of Obamacare ended yesterday much the same way it began: The federal website drew millions of visitors and crashed at least twice.
As the Patient Protection and Affordable Care Act moves into a new stage today, when most consumers must be insured or pay a fine, an estimated 45 million Americans remain uncovered, a continuing burden for medical providers and governments, and a target for Republicans seeking to upend President Barack Obama’s signature initiative in the midterm election.
Still, Obamacare has survived with more than 6 million consumers signed up for private health plans and as many as 3.4 million people being added to the Medicaid program for the poor, according to the latest data. They’ll start using medical services guaranteed by the law’s strict mandates, even as some consumers complain about the high cost of their new premiums and insurers worry about a surge in older, sicker patients.
“The problem isn’t over with the program,” said Julian Zelizer, a history professor at Princeton University in New Jersey. “This is a really complex program that is more than just about registering. It’s about registering the right kinds of people. It’s about the various states ultimately coordinating this effectively with the federal policy. So there’s a million ways this could still go wrong.”
Higher Rates
Attention should now turn to the quality of coverage Obamacare enrollees receive, their access to medical services and insurer preparations for 2015. Already, Indianapolis-based WellPoint Inc., the largest exchange insurer, has warned it may propose “double-digit plus” premium increases for the next enrollment period, which begins in November. Insurers must quickly assess the medical demands of their new customers before filing rates at the end of May.
During yesterday’s deadline day for 2014 enrollment,, the federal exchange website, recorded more than 4.8 million visits, the most in a single day, and there were 2 million calls to the telephone center, Joanne Peters, a spokeswoman for the Department of Health and Human Services, wrote on Twitter this morning. At local events across the country, people lined up for hours trying to enroll.
A computer error stalled the federal site for several hours around midday yesterday, preventing customers from creating new accounts. That occurred after the government pulled the website from service in the early morning hours when a software bug was discovered during scheduled maintenance.
‘Little Glitchy’
“We were a little glitchy on Friday and over the weekend, but today it’s just been terrible,” said John Foley, a supervising attorney at the Legal Aid Society of Palm Beach County in Florida, which is helping enroll people.
Today, the website will be geared toward helping those who began signing up but didn’t finalize their enrollments, Peters said on Twitter.
Determining the success of the system may take a while, according to the Congressional Budget Office. The CBO, which estimates that 45 million Americans will be uninsured this year despite the law, says that number will only shrink as far as 31 million by 2024, the 11th year of expanded coverage.
The percentage of uninsured nonetheless has fallen since the law was passed in 2010, according to a Gallup Poll survey. In the first quarter of 2014, the rate fell to 15.9 percent, its lowest quarterly level since 2008.
Making Progress
Supporters say the numbers represent a clear gain from the law. The data “is perhaps the best sign that the Affordable Care Act is making progress toward achieving its key objective,” Ron Pollack, executive director of Families USA, a consumer advocacy group that supports the law, said yesterday in a statement.
Opponents, meanwhile, question whether most of the new enrollees already had insurance, and had to sign up for Obamacare after their previous coverage was canceled because of the law’s stricter coverage mandates.
HHS, which runs the exchanges, said it isn’t sure. “We’re a looking at a range of data sources to determine how many marketplace enrollees previously had coverage,” Peters, the agency’s spokeswoman, in an e-mail. “Previous insurance coverage is an important metric and we hope to have additional information in the future.”
7 Million
For Obama, the recent enrollment surge has signaled a surprise comeback after the health-care revamp struggled early with technical flaws in the websites built to sell it, and a Supreme Court ruling that undercut its planned Medicaid expansion. The deadline activity may mean the administration will reach its initial goal of 7 million enrollments for 2014.
Most agree the law’s rebirth won’t guarantee the president the momentum he is seeking to reboot his second term.
Obama’s approval ratings are stuck in the 40s. Democrats remain at risk of losing control of the Senate in November, which would give Republicans control of Congress and sideline Obama’s agenda for the rest of his presidency. And it may be months before the cost and coverage implications of the health-care overhaul are clear.
The enrollment surge “is great news but it’s not going to change the fundamental dynamics the administration’s facing,” Jim Manley, a Democratic strategist and former adviser to Senate Majority Leader Harry Reid of Nevada.
Republican Opponents
Manley said those dynamics include “a strong Republican opposition in both the House and the Senate and a real fear of what’s going to happen in the 2014 elections. And the serious challenges the country’s facing around the globe.”
U.S. Representative Tom Cole, an Oklahoma Republican, said even though sign-ups were approaching 7 million, many enrolled “under duress” because their own policies had been canceled.
“This thing has never sold well,” Cole said today on MSNBC’s “Morning Joe” program. “I don’t think the issue goes away at all” in the November election. “I don’t see a lot of Democratic enthusiasm.”
Even with the high turnout seen at the Obamacare exchanges over the past week, Americans remain split on the law with about 49 percent in support and 48 percent opposed, according to an ABC/Washington Post poll of 1,017 Americans released today.
Many Americans have either refused to sign up for the law, or find that they can’t qualify for its benefits.
Self Employed
Douglas Martin, a self-employed Washington-based consultant, shares an Obamacare link with Paula Trietsch Chaney, of Georgetown, Texas, who is unemployed. A day after the deadline for getting coverage in 2014, neither is insured.
Martin, 27, is among a group of young invincibles who say they don’t want to pay for insurance they rarely use. Chaney, 49, and her husband made $30 too much last month to qualify for Medicaid in a state that refused to expand the program. Under Obamacare rules, the family can’t get government subsidies, a factor Chaney said means they can’t afford a health plan.
Martin said he shopped for health plans on the city’s insurance exchange and decided it would be more economical for him to pay the law’s penalty for not carrying insurance: as much as 1 percent of annual income. He makes too much money to qualify for subsidies under the law, he said, and is in good enough health that he thinks he would rarely use a medical plan.
‘I’m Vegetarian’
“I’m vegetarian, I’m healthy and active,” Martin said in a telephone interview. “I don’t smoke, and I rarely drink. Essentially, I take a lot of preventative steps to prevent myself from incurring medical costs, and I feel like a system should reward a person for doing that, and I shouldn’t be subsidizing the cost of others.”
The penalty he faces is galling, Martin said. “You’re going to fine me for not using a service? That just seems absurd,” he said.
Healthy, relatively young adults such as Martin are needed to balance the risk and cost of covering older and sicker people and keep premiums from rising too fast, the government and insurance companies have said. While the CBO estimates that about 40 percent of enrollees should be ages 18 to 34 for the exchanges to be self-sustaining, customers those ages made up just 25 percent of enrollees by the end of February.
Another group of people who may remain uninsured reside in the 24 states whose political leaders haven’t expanded Medicaid, a population that includes about 4.8 million people, said Larry Levitt, a senior vice president at the Kaiser Family Foundation, a Menlo Park, California-based nonprofit that studies health policy. They are adults with incomes below the federal poverty line, who aren’t eligible for the states’ standard Medicaid programs.
Subsidy Eligibility
These people fall in a “Medicaid gap” in which they are not eligible for subsidies under the law’s original wording. The subsidies become available under Obamacare only for people earning at least 100 percent of the poverty level, currently $11,670 for a single person.
In Texas, Paula and Richard Chaney earned $428 in February, Paula Chaney said in a telephone interview. They say they were advised by their community health center that this is $30 too much to qualify for the state’s Medicaid program, which Governor Rick Perry, a Republican, has refused to expand.
Richard Chaney, 53, lost his job with the state’s Natural Resource Conservation Commission in 2005 and hasn’t found full-time work since. Paula was a substitute teacher until January, when she was let go. She and her husband are “selling everything we’ve accumulated over the last 20 years” for living expenses, she said.
$400 Premium
When an enrollment counselor told them the cheapest plan available on the federal insurance exchange would cost them about $400 a month, “I just laughed hysterically because I had been so hopeful for Obamacare,” Paula Chaney said. A “$400-a-month premium is more than we bring in.”
The Chaneys will not have to pay the fine for being uninsured because they can claim a hardship exemption.
Adding to the uncertainty about the future of the overhaul is that undocumented immigrants may be a large portion of those who remain uninsured. The CBO includes them in its 45 million estimate, but doesn’t break down how big a group they may be. There were 11.5 million undocumented immigrants in the U.S. in 2011, according to the Department of Homeland Security.
Some undocumented immigrants have insurance through employers or buy coverage themselves directly from insurance companies or through brokers, which is legal, Levitt, of the Kaiser foundation, said in a telephone interview. “But a substantial proportion” are uninsured.
Religion Exemption
The law also allows people of religious faiths that forbid health insurance or modern medical care to opt out as well as people who are members of religious groups that operate health-cost sharing arrangements, such as Samaritan Ministries of Peoria, Illinois. Other exemptions include people with hardships that include a death in the family, those facing bankruptcy or foreclosure, victims of domestic violence, and people who couldn’t pay medical bills in the past two years, the Obama administration said on Dec. 19.
“No one expected us to come back from the brink or to surpass the revised CBO projection that 6 million consumers would sign up in Year 1, but we have,” White House press secretary Jay Carney told reporters yesterday. “And I think that merits noting.”
Republicans have continued to argue for the law to be repealed. “The problem was never just about the website -- it’s the whole law,” House Speaker John Boehner, an Ohio Republican, said in a statement. “House Republicans will continue to work to repeal this law and protect families and small businesses.”