As Obamacare Deadline Looms, A Warning About the Lowest Cost Insurance

23 Dec 2015 | Author: | No comments yet »

Big surge in enrollment lifts Obamacare marketplaces.

WASHINGTON—Nearly six million people have signed up for 2016 insurance coverage on the federal exchanges since the November start of open enrollment, a pace that Obama administration officials said Friday outstrips last year’s and indicates the health law’s success.Government health officials crowed Friday over a big surge of new customers to the federal Obamacare marketplace, which significantly increased the total number of people signed up in insurance plans compared to the same time last year. By Thursday night, slightly fewer than 6 million people — 40 percent of them new customers — had selected a health plan for 2016 from HealthCare.gov, the exchange that sells private insurance in 38 states, officials said. “We’re obviously pleased,” said Andy Slavitt, the acting administrator of the federal agency that oversees Obamacare, the Centers for Medicare and Medicaid Services. “It’s clear now that many people have been waiting to purchase coverage until this enrollment cycle.” HealthCare.gov’s tally does not include enrollment numbers from the 13 other Obamacare exchanges that are being run by individual states and the District of Columbia. “There was an unprecedented amount of traffic at the call center and an incredible amount of activity on HealthCare.gov,” in the days leading up to Thursday, which was the deadline for enrolling in coverage that will be effective Jan. 1, said Slavitt. The strong demand for Obamacare coverage in the law’s third enrollment period may further solidify the markets, which are still evolving as insurance companies and consumers continue to adapt to the new healthcare environment.

The new surge also comes as the law’s defenders face renewed attacks amid the exit of several new insurers from marketplaces around the country and the recent budget deal that will delay several funding sources in the law. “The marketplace is demonstrating not only growth, but that it remains vibrant and strong,” said Kevin Counihan, who oversees the markets at the Department of Health and Human Services. “That is a very important sign for the road ahead.” Thus far, 2.4 million of the nearly 6 million HealthCare.gov enrollees have been new to the marketplace, more than a third more than signed up at this point last year, according to HHS officials. Thanks to the Affordable Care Act, he noted, the uninsured rate in the United States is now below 10% and far fewer Americans are “one illness or accident” away from financial ruin. While retaining consumers is important, administration officials need to attract uninsured consumers to meet and hopefully exceed the modest goal they set of 10 million people insured on the exchanges at the end of 2016.

The law allows Americans who don’t get health benefits at work to shop among plans on state-based marketplaces operated by the federal government or by the states themselves. Consumers making less than four times the federal poverty level – about $47,000 for a single adult or $97,000 for a family of four — qualify for subsidies. When the law passed, more than 20 million people were expected to have coverage through the exchange by 2016, according to initial projections from the Congressional Budget Office.

On Friday, the administration said it wasn’t ready to comment on whether the 10 million projection will be revised. “I am still feeling concerned about low enrollment this year,” said Caroline Pearson, a senior vice president at Avalere Health. “Surely, the administration will hit its 10 million goal, but I am not sure enrollment will be a lot higher. Those who aren’t insured at that point — and aren’t eligible for a hardship exemption — will owe tax penalty in April 2017 that is $695 per person to a maximum of $2,085 per household or 2.5% of income, whichever is higher. And in recent weeks, insurers and the industry’s Washington lobbying arm, America’s Health Insurance Plans, have become increasingly vocal over their concerns about the marketplaces and the lack of healthier enrollees to balance out the sick consumers who are signing up for coverage. The provision restricts Obamacare’s “risk corridors,” which give money to insurers who are losing money because they have too many sick people on their rolls. Kevin Counihan, CEO of Healthcare.gov, credits the surge with people’s desire to have insurance, but also how affordable they are finding plans if they receive tax credits, which about 80% of people do.

But federal officials speculated that consumers’ ability to find affordable options in the marketplaces, particularly with subsidies, is playing a role. HealthCare.gov and many state marketplaces also feature new tools this year that make it easier for consumers to compare plans, look at physician directories and estimate total costs, including premiums and out-of-pocket expenses such as co-pays and deductibles. Asked Friday if the number of current sign-ups has led officials to raise their enrollment target, Slavitt said, that the information is “too new” and “too fresh” to make such an adjustment.

The administration’s original modest goal was an acknowledgment of the tough job it faces in wooing people who have so far held off from getting insurance. He noted that health officials are “targeting a tougher segment of the population to attract,” a reference to the 10.5 million or so eligible uninsured people, many of whom are low income and have little familiarity with buying and using health insurance. About half of the two million callers had to leave their names to be called back and Slavitt said call center employees had attempted to reach all of them by now.

Employers also haven’t stopped offering coverage, as opponents of the law had expected, which would have led to more demand for plans on the exchange. About 7 out of 10 returning customers, officials have said, would be able to enroll in health plans that would cost them $75 or less after those subsidies are factored in. People who don’t have health coverage next year are subject to a potential Obamacare penalty, which is the higher of $695 per adult, or 2.5 percent of household income.

But the waits were getting kind of long, and on the telephone helpline, which is very popular, the waits were as long as 22 minutes earlier this week. One of the government officials who was talking about this today said that they would’ve needed 72,000 people answering the phones to make the waits at the normal amount, you know, just to answer when people called, and that’s why they had to extend the deadline. You know, something like Amazon, they would’ve been able to handle the volume, which was, you know, in the 150,000 to 200,000 people shopping at one time range. But that plan won’t go into effect until March, and they may face a penalty for missing those two months if they have no insurance for January and February.

KODJAK: Well, I don’t think it’s going to have any effect on people buying insurance and the marketplace specifically, but these were the taxes that were supposed to pay for the expansion of Medicaid and to pay for the subsidies that make some of these policies affordable to people.

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