Technical problems plaguing the opening weeks of the six-month enrollment period of the federal online insurance marketplaces, part of the cornerstone provision of the Affordable Care Act, will likely not be the only reason enrollment numbers could fall short of the Obama administration’s expectations and needs.
“The health exchange websites are not only fraught with the technical problems that have led to so much news coverage in recent weeks, but have also generated relatively little interest or use among uninsured Americans — the primary target group for the exchanges,” noted Frank Newport in a recent Gallup survey.
The survey found that only three in 10 uninsured Americans are familiar with the insurance marketplaces created by the health care reform law, while just 18 percent of the country’s 48 million uninsured — roughly 8.6 million — have attempted to visit an exchange website.
Just a slightly higher portion, 22 percent, say they plan to buy insurance through the exchanges. Those numbers suggest that many Americans are delaying the decision to purchase insurance policies until a later date, when the much-publicized technical glitches are fixed. Of course, the fact that nearly two-thirds of uninsured Americans are unfamiliar with the exchanges reflects the high level of confusion surrounding the individual mandate of the health care reform law that was reported for years ahead of the rollout of the insurance marketplaces.
Gallup’s numbers point to low enrollment. But even the Department of Health and Human Services, the agency charged with implementation, expects initial numbers to be weak. Since the Affordable Care Act was signed into law in March 2010, the Obama administration has used the implementation of a similar health care reform in Massachusetts as a bar for the nationwide rollout.
And it was the Massachusetts case that Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner referenced during last week’s Congressional testimony to explain why initial enrollment numbers may be lower than originally expected. The Obama administration has calculated that approximately 7 million people will enroll for coverage via the exchanges by March 31, the last day of the enrollment period. But similar to the Massachusetts rollout, the first month may be below the expected monthly average.
“We expect the initial number to be small,” Tavenner said during her testimony. “And I think you’ve seen that in our projection, and that was the Massachusetts experience as well.”
Later in the hearing, the administrator expanded on that explanation. “The Massachusetts experience was very slow initially and then it started to ramp up over time,” said Tavenner. “We expect the same type of projections.” A study conducted by the New England Journal of Medicine, which has been cited often by the administration, found that 123 premium paying enrollees signed up in Massachusetts during the first month, while 10,000 signed up for Medicaid plans or plans with no premiums.
Health and Human Services Secretary Kathleen Sebelius admitted that the error-riddled federal website, Healthcare.gov, would likely mean low sign-ups for the first six weeks of the enrollment period. “Our projections prior to launch were always that there would be a very small number at the beginning,” the HHS secretary said. “We watched the Massachusetts trend, which started slowly and then built. I think there is no question that given our flawed launch of healthcare.gov it will be a very small number.”
Twice-a-day “war room” meetings convened at the Centers for Medicare and Medicaid Services after the federal website’s glitch-plagued October 1 launch showed that just 6 people nationwide had actually enrolled for insurance plans. By the second day, that number had only risen to 248. Other than these figures, no actual data have been released by the administration.
Exchange glitches have been a particular rallying point for those that oppose the Affordable Care Act, spawning a series of Congressional hearings and putting the success of President Barack Obama’s signature first-term legislative achievement on tenuous ground. Forgetting for a moment the political implications that a failure to enroll a significant number of uninsured Americans will have on the health care reform, the success of the Affordable Care Act depends heavily on enrollment numbers.
To function as intended, the marketplaces need a broad, healthy risk pool to keep staggering rate increases from occurring. The premiums of healthy, cheap-to-insure people cover the big bills for the relatively small number of sick people.
So if the exchanges do not “enroll enough young, healthy people, insurers will have to raise everyone’s premiums,” wrote the New Republic’s Jonathan Cohn in May. “In the worst case, this could create what actuaries call a ‘death spiral’: Rising premiums prompt people to drop out, causing premiums to increase even more.” Because the reform was aimed at bringing coverage to most Americans, keeping insurance premiums affordable matters immensely to the health care reform’s success.
Between 5 million and 7 million individuals will need to enroll for health insurance coverage via the exchange for the system to work, Ezekiel Emanuel, vice provost at the University of Pennsylvania and an architect of Obamacare, said in an interview with Bloomberg. That means only with enrollments of that magnitude will the exchanges have risk pools broad enough to balance out the proportionally higher medical costs of the sicker and older individuals who will likely be among the first to sign up. However, more important to Obamacare’s success than absolute numbers is who the exchange enrollees are and where they sign up.
“All of this is very state-specific on how it plays out,” Edwin Park, vice president for health policy at the Center on Budget and Policy Priorities, told The Atlantic. Even though the exchanges of 36 states are operated by the federal government and dependent on the same website, each state does have its own insurance market and its own risk pool. “Premiums and all the discussion of rate shock — all that is very state-specific,” Park said.
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