The Train Wreck Cometh (Again)?

September 7th, 2014

Recently, Obamcare has been quiet. Too quiet. But that won’t last long. Contary to the assurances from Ezra Klein that Obamacare is “succeeding beyond all reasonable expectation,” Bob Laszewski highlights some of the big problems that will face between now and January.

First, while 2015 rate increases have been modest, the real hikes will ht in 2017 when the reinsurance programs end.

We won’t know what the real Obamacare rates will be until we see the 2017 rates––when there will be plenty of valid claim data and the Obamacare reinsurance program, now propping the rates up, will have ended.

Second, is still not fully built!

The backroom is not built yet––a year and counting after it should have been.

How many people are enrolled in Obamacare? Without a government to insurance company accounting system yet built, no one knows.

Third, renewing policies is not as easy as it may seem, as everyone will need to go through the same subsidy verification process that many buyers last year skipped.

While the administration tells Obamacare policyholders their automatic renewal will go smoothly, the fact is every one of these subsidy-eligible people needs to go to the exchange website and re-enroll.

Since the administration can’t automatically update a participant’s subsidy based upon 2015 changes in their local baseline Silver plan, the Obama administration’s assurances that the renewal will go smoothly, without existing participants having to re-enroll, is just plain bad information that is going to cause people lots of problems.

The upshot is however many million people (pick any number other than 8 million) are still enrolled, everyone really needs to visit their state exchange or in the month between November 15 and December 15 in order to have their January 2015 enrollment validated, to be sure their income information is up-to-date, and to be sure they are enrolled in the optimal plan for the best subsidy.

Fourth, up to 10 million people will have to sign up between November and December. Throw in all of the cancellation notices–unless the President decides to extend ungrandfathered plans another year.

Five to ten million people all trying to get through exchange websites between November 15 and December 15? Add however many people are going to sign-up for the first time this November to all of those existing participants re-enrolling for January 1, who will all be hitting the still fragile and state exchanges during that four week period, and it is not hard to see how Obamacare could be back in the news.

While the open-enrollment is now scheduled to begin until 11 days after the November election there will be plenty of renewal and cancellation letters going out in October––not the least will be more pre-Obamacare policies being cancelled this year now that their one-year extension is up––carriers aren’t necessarily allowing policies to be extended further.

Oh, and there is an election coming up.

Does this all sound confusing? Just wait until we approach the next open-enrollment with millions of people hearing about all of this complexity and having just four weeks to get their enrollment validated for January 1. The Obamacare anxiety index is going to be off the charts well before November 15th.

I am in the process of writing my proposal for Unraveled. It is a bit surreal to draft a table of contents for things that haven’t happened yet. Regardless of what happens, there will be a chapter between October and December 2014 about the signup period. Time will tell what I write.