“At The Intersection Of Calendars And The ACA”: The Success Of The System Will Not Rise Or Fall Based On Monthly Tallies
The Affordable Care Act enrollment figures for February were released yesterday afternoon, and for the most part, the numbers looked pretty good for those hoping to see the U.S. system succeed.
But news consumers can be forgiven for thinking the opposite. The Hill ran this headline: “ObamaCare enrollments dip.” The Washington Post had a similar message: “Obamacare enrollment drops off in February.” The conservative Washington Examiner told readers: “Obamacare signups slow down in February.”
Sounds discouraging, doesn’t it? January’s enrollment totals were heartening, but if you just skimmed the headlines out of D.C., you’d think February represented a step backwards.
The months HHS has been using for tabulation don’t correspond precisely to the calendar, because of state reporting methods and where weekends fall. As it turns out, “February” is actually February 2 through March 1. That’s 28 days. “January” is actually December 29 through February 1. That’s 35 days. Plug in the numbers, and you’ll see the average daily enrollment for January was 32,744 and for February it was 33,673. As you can see in the graph, the pace actually increased a bit. Among the very few who noticed were Charles Gaba of ACASingups.net and Sy Mukherjee of ThinkProgress.
At a superficial level, the raw monthly totals offer a misleading picture. Someone sees 1.2 million sign-ups in January, followed by 943,000 in February. That looks like a drop.
Until we’re reminded that February is the shortest month.
Stepping back, it’s worth noting that these month-to-month totals are interesting, but their broader importance is limited. I always make a point to highlight the totals as a way of documenting ACA progress, and there’s a political salience as more Americans get invested – literally and figuratively – in the law’s future, but the success of the system will not rise or fall based on monthly tallies and the degree to which they meet preliminary projections.
As Rachel has noted on the show more than once, when a very similar system was established in Massachusetts eight years ago, officials worked under the assumption that enrollment would be slow at first and would then improve in time. In the very first month of the state’s open-enrollment period, a grand total of 123 residents of Massachusetts actually signed up.
And while that may sound like a disaster, no one much cared – in fact, no one even bothered to acknowledge the total at the time, and the figure was only dug up later.
The Affordable Care Act is following a similar trajectory. And since the Massachusetts system is working quite well, that’s probably a pretty good sign.
By most estimates, by the end of March, a little over 5 million consumers will have enrolled through exchange marketplaces, and a similar number will have gained coverage through Medicaid. That’s not quite what the CBO projected before the process began – whether the 7 million figure could have been reached if healthcare.gov worked from the outset we’ll never know – but it’s a perfectly fine number when it comes to sustainability.
Keep this in mind the next time you’re perusing the Beltway media’s headlines about the system’s progress.
By: Steve Benen, The Maddow Blog, March 12, 2014
“Imminent ‘Death Spiral’ Premature, Over-Hyped”: Young People Are Just Procrastinating On ObamaCare
ObamaCare enrollees are, so far, generally older and therefore potentially less healthy than the general public. And on the flip side, only one-fourth of sign-ups are in the crucial 18-35 year-old age bracket, well below the administration’s roughly 40 percent target, according to new enrollment data released Monday.
Given the top-heavy enrollment figures, critics and skeptics are again raising a doomsday scenario in which an elderly pool of enrollees, without adequate subsidization from healthier, younger people, causes premiums to skyrocket so much the entire system crumbles.
“Hello, Death Spiral,” snarks a National Review headline.
Terrifying, right?
However, the administration expected that young people would procrastinate until the last minute, while older and sicker people would be more motivated to get coverage as soon as possible. People have until the end of March to sign up for ObamaCare before the individual mandate’s penalty kicks in, so assuming that works as something of a metaphorical term paper deadline, there could very well be a surge of young people into ObamaCare in the next couple of months.
Massachusetts’ experience implementing Romneycare in 2006 offers some historical precedent. As an analysis by MIT economics professor Jonathan Gruber shows, the percentage of Romneycare sign-ups in the 19-34 year-old bracket hovered in the low 20s for the first few months before gradually rising into the mid-30s range by the end of the year.
ObamaCare, likewise, saw an eight-fold increase in young adults enrolling in December compared to the two months prior, indicating that young people were indeed waiting until the last minute. Hence Aaron Smith, head of the nonprofit Young Invincibles, whose goal is getting uninsured young people enrolled, says the latest numbers show they “are on the right track.”
The White House is also planning to up its outreach to young people, including a National Youth Enrollment Day on February 15. That should help drive up youth enrollment above its current level.
And even if that effort fizzles, it’s still extremely unlikely the death spiral will materialize if the current enrollment demographics remain unchanged. A December report form the nonpartisan Kaiser Family Foundation concluded that “the financial consequences of lower enrollment among young adults are not as great as conventional wisdom might suggest.” Even in a worst-case scenario where young people comprise 25 percent of the overall pool, Kaiser estimated premiums would rise marginally, or “well below the level that would trigger a ‘death spiral.'”
There are two months of open enrollment left, so proclaiming dire predictions is a tad premature at this point. And even if the supposedly deadly enrollment demographics remain unchanged come April, and premiums go up, it almost certainly won’t imperil the law.
By: Jon Terbush, The Week, January 14, 2014
“Extending The Hardship Exemption”: You Can Still Have Weak Health Insurance Under Obamacare, For Now
If you liked your old skimpy health plan, you may not be able to keep it. But now you can get a new, somewhat skimpy health plan instead, at least for a little while.
That’s a rough translation of an Obamacare policy change that the Administration announced on Thursday. The change, first reported by Louise Radnofsky of the Wall Street Journal, represents yet another effort to help people about to lose their existing insurance policies, usually because those policies do not comply with the Affordable Care Act’s standards for benefits and pricing. Those old policies left out major benefits, were sold only to people without pre-existing conditions, and so on.
As you know, plan cancellations have been a source of tremendous controversy—and, for the president, immense political grief. Some estimates have suggested several million people received these cancellation notices. The vast majority of those people have already found new coverage, either directly through insurers or through one of the Obamacare exchange websites, according to the Administration. While some are paying more money, others have discovered that the new policies are cheaper—or, at least, are grateful for the extra protection. Lucia Graves of National Journal wrote about some of their stories the other day.
But some people still haven’t found insurance. Administration officials think, based on conversations with state regulators and insurers, that about half a million people fall into this category. That’s half a million people who could, because of the individual mandate, face tax penalties because they have declined to get affordable coverage.
Now, however, people with cancelled policies have a new option. The individual mandate has always contained a hardship exemption: If you qualify for it, you don’t have to pay the penalty and you have access to the cheaper, slightly less comprehensive catastrophic insurance plans otherwise available only to people under 30. The only question with the hardship exemption has been who gets it. The law gives the administration flexibility over that question and, on Thursday, Health and Human Services Secretary Kathleen Sebelius announced that it would apply to people who just lost their policies and are unable to find replacements that cost the same or less money.
HHS made the announcement by posting a guidance and sending a letter to a half-dozen more conservative members of the Senate Democratic caucus. And neither document answers all of the relevant questions, like how strictly the government will apply the new criteria or for how long this exemption will last. (Administration officials say it will be temporary.)
Conceptually, making the change is not so different from allowing more people to have grandfather protection for their existing coverage—after all, it’s basically telling people who have bare-bones coverage now that they can take out bare-bones policies next year. And imposition of the individual mandate was always supposed to be a gradual process. The financial penalty starts out relatively low, but will increase in 2015 and 2016. The administrative flexibility over the hardship exemption was designed to give the administration some leeway over enforcing the mandate, particularly early on, in order to ease the transition to a new and reformed insurance market. (The Massachusetts reforms, which were a model for the Affordable Care Act, also included a hardship exemption and called for increasing penalties over time.)
Administration officials don’t seem to think many people will take up this new option. They are probably right about that. Catastrophic policies aren’t dramatically different in coverage from the “bronze” policies, which cover 60 percent of the typical person’s medical expenses and comply with all Obamacare requirements. But if you buy a catastrophic policy, you’re not eligible for federal tax credits. If you buy a bronze policy, you are. As a result, most lower- and middle-income people would probably still find the bronze policies a better deal.
Still, some people—primarily, the ones who don’t qualify for subsidies—will opt for the catastrophic policies because they will be moderately cheaper. And some people will opt not to get insurance at all. That will mean fewer people in good health paying premiums for the exchange policies. That’s a potential problem for insurers, who count upon those premiums to offset the medical bills of people in poor health. (For health policy wonks: The catastrophic policies are an independent risk pool, separate from other policies in the exchanges. So for every person who selects one of those policies, that’s one fewer person putting premiums into the larger pot of money for the exchange policies.) There’s also a danger that, as Ezra Klein points out, the administration will come under more pressure to pull back on the mandate for other people. “This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers,” said Karen Ignani, president of America’s Health Insurance Plans.
Yes, insurers say those sorts of things all the time. And this singular change probably won’t cause serious, irreparable harm, any more than any of the previous ones did. The number of people whose behavior changes is likely to be small and the new system is more resilient than most people realize. But even minor changes can become major if there are enough of them.
Note: This item has been updated. As a friend reminds me, even the catastrophic plans under Obamacare aren’t that skimpy. They still cover all essential benefits, for example, and the actuarial value really isn’t much different from bronze plans.
By: Jonathan Cohn, The New Republic, December 21, 2013
“California, Here We Come?”: If Obamacare Can Work For 38 Million People In California, It Can Work For America
It goes without saying that the rollout of Obamacare was an epic disaster. But what kind of disaster was it? Was it a failure of management, messing up the initial implementation of a fundamentally sound policy? Or was it a demonstration that the Affordable Care Act is inherently unworkable?
We know what each side of the partisan divide wants you to believe. The Obama administration is telling the public that everything will eventually be fixed, and urging Congressional Democrats to keep their nerve. Republicans, on the other hand, are declaring the program an irredeemable failure, which must be scrapped and replaced with … well, they don’t really want to replace it with anything.
At a time like this, you really want a controlled experiment. What would happen if we unveiled a program that looked like Obamacare, in a place that looked like America, but with competent project management that produced a working website?
Well, your wish is granted. Ladies and gentlemen, I give you California.
Now, California isn’t the only place where Obamacare is looking pretty good. A number of states that are running their own online health exchanges instead of relying on HealthCare.gov are doing well. Kentucky’s Kynect is a huge success; so is Access Health CT in Connecticut. New York is doing O.K. And we shouldn’t forget that Massachusetts has had an Obamacare-like program since 2006, put into effect by a guy named Mitt Romney.
California is, however, an especially useful test case. First of all, it’s huge: if a system can work for 38 million people, it can work for America as a whole. Also, it’s hard to argue that California has had any special advantages other than that of having a government that actually wants to help the uninsured. When Massachusetts put Romneycare into effect, it already had a relatively low number of uninsured residents. California, however, came into health reform with 22 percent of its nonelderly population uninsured, compared with a national average of 18 percent.
Finally, the California authorities have been especially forthcoming with data tracking the progress of enrollment. And the numbers are increasingly encouraging.
For one thing, enrollment is surging. At this point, more than 10,000 applications are being completed per day, putting the state well on track to meet its overall targets for 2014 coverage. Just imagine, by the way, how different press coverage would be right now if Obama officials had produced a comparable success, and around 100,000 people a day were signing up nationwide.
Equally important is the information on who is enrolling. To work as planned, health reform has to produce a balanced risk pool — that is, it must sign up young, healthy Americans as well as their older, less healthy compatriots. And so far, so good: in October, 22.5 percent of California enrollees were between the ages of 18 and 34, slightly above that group’s share of the population.
What we have in California, then, is a proof of concept. Yes, Obamacare is workable — in fact, done right, it works just fine.
The bad news, of course, is that most Americans aren’t lucky enough to live in states in which Obamacare has, in fact, been done right. They’re stuck either with HealthCare.gov or with one of the state exchanges, like Oregon’s, that have similar or worse problems. Will they ever get to experience successful health reform?
The answer is, probably yes. There won’t be a moment when the clouds suddenly lift, but the exchanges are gradually getting better — a point inadvertently illustrated a few days ago by John Boehner, the speaker of the House. Mr. Boehner staged a publicity stunt in which he tried to sign up on the D.C. health exchange, then triumphantly posted an entry on his blog declaring that he had been unsuccessful. At the bottom of his post, however, is a postscript admitting that the health exchange had called back “a few hours later,” and that he is now enrolled.
And maybe the transaction would have proceeded faster if Mr. Boehner’s office hadn’t, according to the D.C. exchange, put its agent — who was calling to help finish the enrollment — on hold for 35 minutes, listening to “lots of patriotic hold music.”
There will also probably be growing use of workarounds — for example, encouraging people to go directly to insurers. This will temporarily defeat one of the purposes of the exchanges, which was to make price comparisons easy, but it will be good enough as a short-term patch. And one shouldn’t forget that the insurance industry has a big financial stake in the success of Obamacare, and will soon be pitching in with big efforts to sign people up.
Again, Obamacare’s rollout was a disaster. But in California we can see what health reform will look like, beyond the glitches. And it’s going to work.
By: Paul Krugman, Op-Ed Columnist, The New York Times, November 24, 2013
“Obamacare Death Spirals”: The Latest Prediction Of Doom Hits The Conservative Blogosphere
A new meme has arrived on the scene from the voices and pens of the anti-Obamacare devotees who remain more committed to frightening than informing when it comes to healthcare reform.
It’s the Obamacare “death spiral”— and it’s coming to a conservative blog near you.
Through a series of articles already going viral—thanks to a piece published on National Review Online and one by my Forbes colleague, Dr. Scott Gottlieb –we learn that the threat of impending doom ‘du jour’ comes via an allegation that, due to the poor launch of the healthcare.gov website, younger and healthier participants will now be more likely to stay away than sign up.
This, the falsely fearful argue, will result in an insurance pool jammed with older and sicker people without the required participation of younger and healthier Americans needed to balance the pools.
The result of such an event?
As insurance companies are forced to pay out more claims —due to their older and sicker participant base—without sufficient premium income from younger and healthier people less likely to call upon the insurer to pay for medical care, the insurance company is forced to raise their premium costs so they don’t loose money. As this problem builds upon itself year after year, it becomes, as it is termed in the insurance industry, a ‘death spiral’ as, sooner or later, the insurers are forced out of business when the premium costs get too high to be affordable by much of anyone.
Clearly, the authors suffer from a lack of understanding of human behavior—particularly when it comes to young people who are not given to dealing with these sort of issues until the deadline approaches…meaning we really don’t yet know anything about the potential success or failure of the insurance pools available on the health care exchanges.
If you doubt this, you might want to review what took place with the forerunner of Obamacare—Romneycare.
According to Jonathan Gruber, one of the key architects of the Massachusetts health care exchange—a program that the overwhelming majority of Massachusetts residents favor and support—and one of nation’s leading experts on all things Obamacare, “Massachusetts launched its health insurance program at the beginning of 2007 but enrollment didn’t fully flesh out for a year. In fact, it was less than 6% of the year’s total by the end of the second month. (emphasis added)”
In other words, people of all ages tend to wait until the deadline is upon them before coming to grips with an obligation like purchasing health insurance. But if you have kids, you know that younger people are even more likely to delay matters such as this.
Yet, here we have the opponents of the Affordable Care Act, ready to declare the entire program DOA based on a prediction of ultimate demise via the ‘death spiral’—and all because the slow start of the federally operated state healthcare exchanges are precluding younger and healthier prospective participants from signing up during the initial weeks of availability.
Even stranger, Dr. Gottlieb argues that, as a result of the failures of the federal website launch and the negative cascading effect he suggests will likely follow, more people will be driven out of the exchanges due to higher premiums in future years. In its place, Gottlieb proposes, these people will turn to “off-exchange” policies, purchased by going directly to an insurance company, broker, etc. for policies that are not offered on the exchange.
Gottlieb writes—
“Over time, conforming and non-conforming insurance policies sold entirely outside the exchanges could look increasingly attractive to consumers; even accounting for the subsidies many people would get for staying inside the exchanges.”
Why would they do this? Because, Dr. Gottlieb suggests, the off-exchange policies will be cheaper.
Setting aside that I have no idea what Gottlieb is referring to when he speaks of “non-conforming” insurance policies as every individual insurance policy, whether available on the exchange or not, must, for all practical purposes, meet the basic benefits requirements set forth in the Affordable Care Act, I can’t quite fathom why buying less expensive insurance off the exchanges would be a bad thing.
There is a tendency among those dedicated to burying healthcare reform to miss the point when it comes to the objectives of Obamacare. They spend so much time working out how to creatively attack the law that they simply cannot recall why we needed healthcare reform in the first place.
At its core, the law is designed to do three things—get insurance company abuses under control, make healthcare coverage more readily available to virtually all Americans and institute a series of experiments designed to bend the cost curve in healthcare delivery.
This being the case, why would anyone care whether you buy your insurance coverage off-exchange or on-exchange, so long as you obtain healthcare coverage? What’s more, the individual mandate does not require that you shop on the exchanges—it only requires you to purchase a qualifying policy.
The healthcare exchanges are designed to create competition among insurance companies. Should it not work, and Dr. Gottlieb is correct that the events occurring on the exchange will produce lower costs of an off-exchange policy—even for those who qualify for subsidies which are only available on the exchange—then we will have learned that the exchanges did not create the intended competition.
But, if Gottlieb is right and people can buy a cheaper policy that meets the requirements of the ACA off-exchange, then the objective of the law will be accomplished.
The bottom line here is that, by any reasonable and rational metric, it is far too early to know whether or not the insurance programs offered on the healthcare exchanges will manage to maintain the balance required of sick versus healthy and old versus young. In the final analysis, the doomsayers may turn out to be right. Maybe it just won’t work.
Or, maybe it will.
This is something we will simply not know for quite a few years.
Therefore, where exactly is the benefit of predicting a dire result at this stage of the game based on no available evidence whatsoever? Can there be any possible use of this information aside from giving political opponents some newly minted ammunition? Will the knowledge that insurance policies offered on the exchanges could experience a death spiral—a possibility that has existed for health insurers since the dawn of the industry—do anything to improve the odds of success?
If there is anything we can be sure of, it is that there will be a great many surprises along the way as we make these major adjustments to our healthcare system—some that will be good and some that will not.
As for the suggestion that we are in some immediate crisis because the healthcare.gov website has not yet worked as required, Jonathan Gruber, again, provides a reasonable and rational explanation of what is really happening and what it means.
USA Today reports that Gruber describes the current situation as “DEFCON 1″—a political problem, but probably not a problem yet for the marketplace.
If healthcare.gov is not running by Thanksgiving, it would be “DEFCON 2″, a real problem because people want to get insurance by January, but it’s not a crisis.
The crisis, according to Gruber, arrives if people cannot get insurance until March of 2014.
Gruber added that, in Massachusetts, officials were not focused on how well enrollment went on a day-to-day basis. They looked at the long-term potential, and expected that people would sign up in time to avoid the penalty.
Finally, Gruber noted, “I’m pretty confident they’ll have it up and going by Thanksgiving.”
So, how about we leave the death spiral stuff in the back room until the moment comes to actually haul it out and parade it around?
After all, at the rate Obamacare opponents are tossing out and using up their theories of pending disaster, they will soon run through their play book and have nothing left in their quiver.
Wouldn’t that be a shame?
By: Rick Ungar, Op-Ed Contributor, Forbes, October 28, 2013
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