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Much Bigger Than a Glitch

The “glitches” in the Healthcare.gov website are major, pervasive, and damaging to Americans’ ability to acquire health insurance under this law. And the President seems only willing to offer weak apologies for the problems, as evinced by his recent Rose Garden appearance. Now the media has become embroiled in the question of “how long” it might take for the website to become functional. And maybe how to keep it, and the state websites, from being hacked.

The answer to this latest question appears to be the end of November. “By the end of November, HealthCare.gov will work smoothly for the vast majority of users,” Jeffrey Zients, President Obama’s “troubleshooter for the marketplace” said this week, according to the New York Times. 

“That self-imposed deadline comes just two weeks before the Dec. 15 deadline for people to sign up for insurance that takes effect on Jan. 11,” notes the Times. What happens if the Administration misses that deadline?

Maybe they should have picked a sooner drop-dead date. One might point to Megan McArdle, writing for Bloomberg on October 14, who placed the “drop-dead date” for the Healthcare.gov website at November 15th–at the latest–and, preferably, November 1st. She explained: “In the private sector, this system would already have been rolled back, probably less than 48 hours after it was rolled out. The government has more time, but not that much more, because every day they wait adds to the chaos that will occur if they have to pull the plug in December. If the system cannot reliably process 50 percent of its users on Nov. 1–and I mean from end to end, including sending a valid enrollment file to the insurer–then the administration should ask for a one-year delay of Obamacare’s various regulations, including the individual mandate (emphasis added).

“I chose that date because it’s when Jon Kingsdale, who ran the Massachusetts exchange for its first five years, said we would be ‘really in deep doo-doo,’” McArdle continued. “Well, let’s say Nov. 15–the date when almost all the experts I’ve heard say we really need to be running at full speed, to handle the crush of applications sure to come between Thanksgiving and the mid-December deadline for buying insurance that starts in January.”

Another deadline that matters is March 31st, which is when Americans have to be covered or face a penalty up to 1% of their income from the IRS. Effectively, that means they have to sign up through the website–or their state’s own exchange–by February 15, 2014 to meet the deadline. But what about those people losing their health insurance that need coverage by January 1st, 2014 to cover their existing health care needs? It’s not like everyone can wait three months without health insurance because the website’s slow. Obama recommended in his speech that those without health insurance consider using the phone to apply.

And the Daily Caller is reporting that, at this point, the number of health insurance cancellations “soars” above Obamacare enrollment rates. “Insurance carrier Florida Blue sent out 300,000 cancellation notices, or 80 percent of the entire state’s individual coverage policies, Kaiser Health News reports,” states the Daily Caller. “California’s Kaiser Permanente canceled 160,000 plans—half of its insurance plans in the state—while Blue Shield of California sent 119,000 notices in mid-September alone.”

“More Americans have lost their individual health coverage in Florida and California than have gotten past the login screen on HealthCare.gov, according to The Washington Post, which reports that 476,000 applications have ‘been started,’ but not completed,” reports the Daily Caller.

“The administration estimates that it needs 2.7 million young healthy people on the exchange, out of the 7 million total expected to apply in the first year,” commented McArdle. “If the pool is too skewed–if it’s mostly old and sick people on the exchanges–then insurers will lose money, and next year, they’ll sharply increase premiums. The healthiest people will drop out, because insurance is no longer such a good deal for them. Rinse and repeat and you have effectively destroyed the market for individual insurance policies.”

With website difficulties, more sick people are likely to enroll through sheer determination. And who do you think is more likely to take the three month grace period before applying–a sick person or a healthy one? That is, if the healthy person doesn’t just decide to swallow the fine and avoid buying health insurance altogether.

It’s hard to imagine how much more the individual insurance market can take; after all, it’s already been significantly damaged. (Maybe that’s the point, as Roger Aronoff remarks for Accuracy in Media.)

A recent study by the Heritage Foundation found that 45 of 50 states face rate increases. (The state-by-state changes are outlined at the link.) The five states with an improved situation are Colorado, New Jersey, New York, Ohio, and Rhode Island. I’ve already explained some of New York’s situation in a previous column for Accuracy in Media.

Not only are premiums going up, but the bronze, silver, and gold plans entail horrendously high deductibles. And hospitals are beginning to charge the entire deductible up front. “The practice of upfront payment for non-emergency care has been spreading in the U.S. as deductibles rise,” reports Stephanie Armour for Bloomberg. “Now, the advent of the Patient Protection and Affordable Care Act is likely to accelerate that trend.”

“Many of the plans offered through the law’s insurance exchanges have low initial premiums to attract customers, while carrying significant deductibles and other out-of-pocket cost sharing” (emphasis added).

But hey, if you like your health insurance plan, you can just keep it, right?



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