House Republicans trying their damnedest to stop Obamacare in its tracks aren’t the only ones who foresee chaos when state health-insurance exchanges open one week from today. President Barack Obama himself has told Americans to expect “glitches” and “hiccups.”
That’s an understatement. It’s the surest bet since the 1936 presidential election: Things won’t work perfectly when the gears begin turning on the giant new public health-insurance sales machine, the likes of which the U.S. has never seen. Exchanges in all 50 states and the District of Columbia are to sell a variety of private insurance policies to some 7 million Americans not covered by employer plans -- while simultaneously processing subsidies for people with incomes low enough to qualify.
If things don’t run smoothly from the get-go, it won’t mean that this piece of the Patient Protection and Affordable Care Act has failed. Three months will remain before coverage from insurance plans sold on the exchanges even kicks in. And there will be many months and years beyond that to smooth the wrinkles. Obamacare supporters often point to how much ironing out Medicare Part D, the prescription drug program, needed when it came into effect in 2006. Even Medicare and Medicaid have been tweaked more than 20 times since they were enacted in 1965.
Already, there is some cause for concern as well as some for guarded optimism. On the downside, some big health insurers have decided not to participate in many state exchanges -- apparently out of concern that first to sign up will be people who have been without insurance for some time, and so will be relatively unhealthy and expensive to insure. This limits buyers’ choices.
Patient advocates are also worried that insurers will cut costs by creating networks with fewer doctors and hospitals, making it harder for consumers to avoid high out-of-pocket payments. That’s a legitimate concern, even if coverage under limited provider networks is better than no coverage at all.
Also, efforts in Congress and in some states to place unnecessary requirements on the “navigators” who are supposed to help bring people into the exchanges have led some potential navigators to give up. That will make it harder for people to understand their options, hurting consumers and the law.
On the upside, insurance premiums appear to be coming in lower than the Congressional Budget Office predicted. And the federal Department of Health and Human Services has already completed the data hub that will process information for the exchanges.
Much more needs to go well, at least eventually, for the exchange system to work. Most important, many young and healthy customers need to participate to improve the risk pools. Concern remains that the Obama administration’s efforts to sell the program have been too little too late, and that some young people will opt to pay the small fine rather than buy insurance.
Then, each exchange will need to rely on the smooth operation of a series of linked data networks, so that people can sign up for insurance reasonably quickly and efficiently. That means sharing relevant data with Medicaid, the IRS and other sources. The real test will come in states that have refused to cooperate with the exchanges; the consequences of that obstructionism won’t be known until enrollment starts.
Republicans have made a lot of noise about the potential for fraud -- if exchange customers lie about their income to get subsidies they’re not entitled to, or if navigators somehow try to scam consumers. The Obama administration has put in place safeguards to protect personal information, and waves of fraud seem unlikely, but one way to tell if people are gaming the system will be to see whether the number of people who claim subsidies matches government estimates.
After a month or two, it should also become clear whether exchanges in states with strong opposition have more trouble than those in supportive states. If they do, it will take some sorting out to assign blame. On the other hand, if glitches and hiccups are the worst that happens, the Obama administration will be able to claim considerable credit for working around roadblocks -- and avoiding total chaos.
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