With the Affordable Healthcare Exchanges now open for business, experts on both sides of the Obamacare debate are predicting widespread "glitches and bumps" — to use President Barack Obama's own words — that are likely to underscore key questions about the new insurance marketplaces and the reform law in the days and weeks ahead.
- Will the complex IT systems — the foundation and Achilles heel of the exchanges — hold up?
- Are uninsured Americans likely to sign up for insurance or will costs keep them away in droves?
- Will enrollment be complicated by political opposition to Obamacare in some states?
- How are employers likely to respond to the 11th hour delay announced last week for small businesses seeking to use the exchanges for their workers?
The answers to these questions could determine Obamacare's ultimate fate, with the opening of the exchanges posing the law's biggest test to date. But despite the uncertainties, one thing seems assured: The rollout of the program is likely to be messy in the days ahead, which is sure to fuel the arguments over the pros and cons of the law as it enters its most critical phase of implementation.
Two high-ranking U.S. officials with the Treasury Department and Government Accountability Office recently warned Congress the launch of the exchanges will be balky. That's because IT systems were not tested in each state before Oct. 1 and there wasn't enough time to fix bugs beforehand.
In addition, a poll found two-thirds of healthcare executives believe technical and logistical problems with the exchanges will last well beyond the opening day. The survey, by KPMG LLP, showed 32 percent of 80 execs polled didn't expect the marketplaces to be fully up and running Oct. 1; another 33 percent responded: "Maybe, but I have my doubts."
"With the potential of more than 30 million Americans being added to our healthcare infrastructure, determining who is eligible [for insurance subsidies] and what they are eligible for presents a significant short-term burden to the new system," said KPMG's Joseph Parente. "[Insurance] companies must get the set up right or make quick adjustments in order to prevent future bottlenecks in the system when enrollment and payment processing starts to take shape."
Ron Pollack, executive director of the advocacy group Families USA, acknowledged the challenges, noting polls show most Americans are confused by the law. But he also stressed that enrollment for 2014 and extends through March 31. Uninsured Americans have until then to sign up or pay a tax — $95 per individual, $285 per family next year — imposed by the law.
"We've had a vigorous discussion across the country about the [law], pro and con, but what we have not had is a very personal conversation about what … individual people and families can gain," he said, in a conference call with reporters. "But given there are 182 days in the first enrollment period, this is a marathon, this is not a sprint and this work is likely to continue for the next six months or longer."
With that in mind, here are five things to watch for as Americans begin signing up for insurance through the exchanges.
No. 1: Tech issues. It's the kind of scenario that gives IT specialists nightmares: Millions of individuals in 50 states logging onto the new online exchanges at the same time — causing them to crash and generating frustrating mosaics of spinning hourglasses and frozen computer screens across the country.
Despite the millions of federal dollars spent on IT contracts to secure the systems, technological snafus created at least some problems for the exchanges in the early going. Problems were evident soon after the first waves of consumers began logging onto the federal website at HealthCare.gov
. Visitors to the site early Tuesday were greated with a notice saying: "The system is down at the moment. We're working to resolve the issue as soon as possible. Please try again later."
How bad will it be in the days and weeks ahead? Hard to predict. But experts expect it may take some time to sort out the technical and logistical glitches.
No. 2: Health plan costs. Will exchange plans cost more or less than in the past? Projections have been all over the map, but the big picture: Some people with pre-existing conditions may benefit because Obamacare bars insurers from rejecting anyone with a chronic health problem or charging them more. Premiums for older Americans also are limited under the law. But to cover those costly protections, many young and healthier Americans are likely to pay more for plans purchased through the exchanges.
Last week, the U.S. Department of Health and Human Services released an analysis showing Americans will pay an average monthly premium of $328 monthly for a mid-tier health plan and contended the average price will be 16 percent lower than earlier projections on premiums.
But critics noted those claims were based on projections made several years ago, and data from states that largely support Obamacare. Forbes
magazine released an analysis of the HHS numbers
, projecting Obamacare will increase insurance rates for younger men by 97 percent to 99 percent, and for younger women by an average of 55 percent to 62 percent. Residents of some states will see individual-market rates triple for women, and quadruple
for men, according to the Manhattan Institute analysis.
What both sides agree on is that costs and premiums will vary widely by state, and sometimes within a particular state, depending on an applicant’s age, hometown, health status, and income.
The HHS figures indicate states with the highest monthly prices for the second-cheapest health plans are those with large rural populations – such as Wyoming, ($516) and Alaska ($474) – where healthcare can be more costly to provide. The least expensive plans were reported in Minnesota ($192 per month) and Tennessee, $245.
The rates in Florida and Texas — Republican-led states whose leaders oppose Obamacare — offer a glimpse of the wide variations in costs and available plans even within a state's borders.
In Florida, prices are right at the national average of $328, but range from $239 to $352 a month (for a 40-year-old), depending on where someone lives. Texas' monthly rates are below the national average, but a young person living Austin will have 76 plans to choose from (and pay an average of $169), while a Dallas-Fort Worth resident will have 43 options (at $217).
No. 3: Younger Americans' participation. Obamacare banks on healthy young Americans buying insurance in large numbers to offset care for sicker older people whose premiums don't cover the healthcare services they use. Calculations by federal officials indicate 7 million Americans — including 2.7 million younger people — are needed to balance the books in the first year of the exchanges.
But a new survey of 56 healthcare-related investors by Citigroup
found most expect only 4 million Americans to initially enroll in the exchanges. If those projections hold true, the shortfall could mean higher costs and premiums in the years to come to make up it, healthcare-policy analysts note.
No. 4: Continuing delays, changes. Federal officials announced last week that small-business and Spanish-language insurance enrollment in the exchanges would not begin on Oct. 1, as planned, but be pushed back a month.
That 11th-hour change followed the administration's decision to delay the employer mandate — requiring businesses with 50 or more workers to provide health benefits or pay a $2,000-per-employee fine — until 2015, a year later than originally scheduled.
These last-minute changes were only the latest in a series of delays in Obamacare provisions. An unpublished memo
compiled by the Congressional Research Service and publicized by Forbes
indicated about than half of some 80-plus Obamacare provisions slated to take effect since the law's 2010 passage have been delayed or are behind schedule.
What these trends suggest is that more delays and modifications are likely to be announced.
Former President Bill Clinton acknowledged in a keynote speech this month, for instance, that "drafting errors, unintended consequences, and unanticipated issues" in the law need fixing and there will be detailed ways to improve the law. Among them: expanding tax credits for small businesses that provide health benefits and allowing workers who can't afford employer-provided plans to buy private insurance.
No. 5: Employer responses. In recent weeks, major employers have announced big changes in their company health plans, citing Obamacare:
- Universal Orlando, Home Depot, and Trader Joe's all have said they plan to stop offering health insurance for part-time workers, since the employer mandate of Obamacare requires employers to cover only those employees clocking in more than 30 hours per week. Sears and Darden Restaurants are shifting to more part-time workers to avoid the costs of the mandate.
- Walgreen Co. plans to offer subsides to about 160,000 workers to buy their own health insurance on the exchanges.
- UPS will cancel coverage for the spouses of 15,000 workers next year, if they can get it elsewhere. A Towers Watson survey found that next year 12 percent of employers plan to exclude coverage for spouses who can get benefits elsewhere, up from 4 percent this year.
- 3M Co. said it wouldn't cover retirees under health-insurance plans. Other firms are following suit, with an Aon Hewitt survey finding 60 percent of employers are reviewing retiree health plans.
The fact that companies know their workers will be able to buy coverage through the exchanges likely will encourage this trend in the weeks and months ahead, economists say.
So how many workers will lose employer-based coverage through work-related shifts like these? The CBO estimates at least 7 million of 150 million Americans who now receive employer-provided coverage could lose it, but some management consultants project higher numbers.
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