Obamacare Week 10––A Dearth of Enrollment In the States and Continuing Backroom Problems

A few observations after 10 weeks of Obamacare implementation.

The Obama administration released the first two months enrollment figures this week. With HealthCare.gov still struggling in November, the enrollment of 137,000 people in the 36 states was expected. The main event for the federal exchanges will play out in December now that most people can navigate it.

What I found notable in the report was the lack of robust enrollment in the states. In states where the exchange has been running at least adequately for many weeks now, the enrollment numbers are far from what I would have expected.

California enrolled 107,000 people in private plans in the first two months. But California has cancelled 800,000 current individual health plans effective January 1––all of whom have to buy a new plan by January 1 or become uninsured. The only place those who are subsidy eligible can get a subsidized plan is in the California exchange. In addition, California has about 2.5 million people uninsured and exchange eligible. A Robert Wood Johnson (RWJ) report estimated that California has 1.4 million of those people eligible for subsidies in the exchange. Given the $250 million in outreach and marketing money the federal government has earmarked for California's exchange, the dearth of sign-ups so far is concerning.

Similarly, New York enrolled only 45,000 in an exchange plan through November but has over 2 million uninsured. The RWJ report estimated that 563,000 people alone are exchange subsidy eligible. The rule of thumb is that about half of those eligible for the exchanges will be subsidy eligible and half will not. That means that something close to the 563,000 subsidy eligible are also able to buy on the New York exchange.

Washington, the state most believe has done the best job building and running an exchange, has 959,000 uninsured, with RWJ estimating 223,000 are eligible for a subsidy in the exchange, but has only enrolled a total of 17,000 for private insurance in the first two months.

Kentucky has 646,000 uninsured and an estimated 132,000 eligible for subsidies yet has enrolled only 13,000 people in their exchange––both subsidy and non-subsidy eligible.

The rest of the states are either doing no better or are doing much worse.

Health plans I have spoken to are also worried about the people who have enrolled so far paying for their coverage. If an enrollee does not pay their first month's premium by December 31, their enrollment will be void. So far, the health plans I have spoken to have seen only about 20% of their enrollees pay their premium.

Clearly, December is going to be a big month both for enrollments and premium payments. It's sort of like going to church on Sunday morning. No one is in the pews 15 minutes before but they all come in the last 5 minutes.

While the open enrollment will continue to March 31, I would have to believe those anxious to get their pre-existing conditions covered, those who look forward having a premium subsidy for the first time, those who are losing their coverage at year-end, and those who just simply value having health insurance, will get themselves signed up by January 1. I will suggest the March 31 deadline is more the deadline for the procrastinators.

Particularly in the states that haven't had big computer problems, the only thing we can say so far is that the church is pretty empty. 

In terms of backroom issues, the problems continue:

• As of this week, the 834 transaction error rates (enrollments sent from the government to the health plans) are better than they were in October and early November but are still running in the 5% to 10% range––a place they have been for a number of weeks now.
• The Obama administration has still not built the reconciliation computer system needed to clean up the remaining enrollment data issues between HealthCare.gov and the health plans. The health plans have been told to expect an electronic file in the next few days, containing what the feds think are the health plan's enrollments through November. The plans will then have to figure out how to reconcile the two lists and then fix the problems. Many plans will have thousands of enrollments to reconcile. There will be another such file coming in January for the December enrollments with likely tens of thousands of more names to reconcile. That means that any December errors will have to be fixed before people can be covered, thereby creating additional customer service issues until the files can be cleaned up.
• The feds can't pay the insurers their premium subsidy payments because a payment system has not yet been built. The government is asking the health plans to prepare their own bill and send it to the government for a preliminary payment until this is resolved.
• The feds haven't been able to transmit the proper Medicaid enrollment to the state Medicaid plans in the 36 federally run exchange states. So, the feds will be sending an abbreviated "flat file" until that system is built. In the meantime, the states will have to deal with much less eligibility data then they currently require.
• There have been reports of HealthCare.gov enrolling exchange eligible people in Medicaid instead of the private plan they want (Federal Exchange Sends Unqualified People to Medicaid). No one seems to know how big a problem this is.

How many peoples' enrollments––Medicaid and private plans––have been jeopardized by these backroom issues? Until the federal government can do a timely and efficient reconciliation of those who have applied compared to those whose coverage has actually been established by the health plans and state Medicaid programs, there is no way to know.