Thursday, October 17, 2013

Week Two of the Obamacare Federal Health Insurance Exchange Rollout––No Improvement

There was no progress for the new federal health insurance exchange's information technology and enrollment challenges in its second week.

At the end of week two of the Obamacare launch, health plans were generally seeing no more enrollments per day then they saw in the first week.

As troubling, the backroom issues plaguing the connection between health insurers and the federal government had not been resolved and there is no indication from the feds when they will have these things cleared up.

My sense is that the feds, based upon the number of enrollments they have sent to the insurance companies, enrolled about 10,000 people in the first week (about 5,000 single and family contracts) and another 10,000 people in the second week in the 36 states using the federal exchange.
The Washington Post earlier this week cited estimates that the number was about 36,000 the first week using a web analysis firm's review of traffic. My estimates are based upon hard numbers from high market share plans then projected over the entire 36-state federal market.

There also may be some paper applications waiting for the systems to work so that they may be entered and enrolled with the insurers.

But then, the feds could easily clear this up by just telling us how many people have enrolled.

Most states running their own exchanges aren't doing a whole lot better.

New York says they have "enrolled" 100,000 people. But when pressed on that in a CNBC interview Tuesday, that state's director clarified that to mean 100,000 people have set up accounts and applied to know what their subsidies are. She refused to say how many people have gone the rest of the way to actually buy a plan. Reports from consumers trying to use the exchange in New York continue to indicate difficulty being able to navigate the site. 

Yesterday, the New York Times reported that only the Kentucky, Colorado, Nevada, and Washington state exchanges enable consumers to search for the providers covered in the various plans. This is a critical piece of information for consumers because so many of the particularly lower cost plans were able to develop lower rates by excluding wide swaths of doctors and hospitals. A consumer would be foolish to buy a health plan without knowing which doctors and hospitals it covers!

Washington state appears to be off to a very clean start. They are saying they have finalized enrollment for about 25,000 lives––most in Medicaid. They also say another 37,000 have completed insurance exchange applications that are awaiting premium payments due in December. Washington has about 1 million uninsured and another 200,000 in the individual market. So, they appear to be on their way to enrolling about 5% of their potential market in both Medicaid and the exchange. That likely says something about where exchanges would be if they had not had the problems.

I will suggest that comparing Washington state's health exchange experience to that of the federal exchange in the coming months, and the many states running their own exchange who also had problems, will be helpful in understanding just how damaging this start was.

The U.S. individual health insurance market currently totals about 19 million people. Because the Obama administration's regulations on grandfathering existing plans were so stringent as many as 16 million are not grandfathered and must comply with Obamacare at their next renewal. The rules are very complex. For example, if you had an individual plan in March of 2010 when the law was passed and you only increased the deductible from $1,000 to $1,500 in the years since, your plan has lost its grandfather status and it will no longer be available to you when it would have renewed in 2014.

Millions of people are now receiving letters from their carriers saying they are losing their current coverage and must re-enroll in order to avoid a break in coverage and comply with the new health law's benefit mandates––the vast majority by January 1. Most of these will be seeing some pretty big rate increases.

But unless they live in Washington state, Nevada, Colorado, and Kentucky, they can't now get on an exchange site to see their plan options, new prices, and provider directories so they can make an informed decision before they lose their coverage.

This is a fine mess.
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