Taking the Pulse: Obamacare Round Two

November 11, 2014

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Hard to believe it’s time for the second year of full implementation of the Affordable Care Act —aka Obamacare. On November 15, the health insurance marketplaces reopen for business for Americans to shop for private health insurance. Proponents are hoping this year will look nothing like last year’s debacle. The Obama Administration, worried about setting expectations too high, has just announced it expects 9.1 million Americans to be enrolled in marketplace plans by the end of 2015. That’s nearly 4 million fewer than predicted by the Congressional Budget Office. Are they lowballing so that they can look good if they beat their number? Or do they know something we don’t? The question on many minds is: How will Round Two be different than Round One?

First, let’s look at the numbers for 2014:

  • 7.1 million people enrolled in and stayed in private health plans purchased in a marketplace;
  • Another 6 million were enrolled in Medicaid, the state-run healthcare program for people with low income or disabilities;
  • About 3 million young adults under the age of 26 were able to remain on their parents’ insurance policy; and
  • About 5 million people bought individual insurance policies directly from insurers instead of going to the marketplaces.

More than half of these people were previously insured in policies that were either very expensive or limited in coverage and “traded up” to better, more affordable coverage. The Congressional Budget Office, an independent arm of Congress, estimated the number of uninsured Americans will drop by 12 million by the end of 2014, bringing the total down to 42 million people.

Five Things to Watch
As Round Two begins, keep an eye on five defining issues:

Less Time: Open Enrollment will last only three months – November 15 through February 15 – compared with six months in 2014. A recent Kaiser Family Foundation poll found only 11 percent of uninsured Americans knew when enrollment began.

Fewer Glitches:  Those running the health insurance marketplaces hope a year of experience has given them time to solve the major glitches. These fall into two categories: First, problems with the applications that people use to create accounts, shop for insurance, choose a plan and sign up. Second, problems caused by servers unable to cope with high volumes of traffic to the sites. Many of the applications are reworked and a new, short form is ready for consumers who don’t have complex needs. The hope is these improvements will reduce the amount of time it takes to enroll and, therefore, fewer people will be on the system at the same time. Bigger clouds should handle the traffic, but we won’t know until people go online.

More Choices: Nationwide, the number of insurers selling in the marketplaces jumped more than 25 percent over 2014, from 191 to 248. The number of issuers doubled in Indiana, Missouri, New Hampshire, and West Virginia; the only state to have fewer is California, which went from 12 to 10 insurers. More plans usually mean more competition and better prices.

Premium Increases: Speaking of prices, there seems to be some good news on that front as well, but as with everything about the ACA, it varies by state. Nationally, insurance sold through the marketplaces costs about 6 percent more than in 2014, much less than the annual double-digit rate hikes of recent memory. In Oregon, buyers will see an average decline of 2.5 percent. But other states aren’t as fortunate. In Kansas, for instance, the average premium rose 15.5 percent.

Re-Enrollment: Warning lights are blinking when it comes to the question of how the 7.3 million people who purchased 2014 coverage in the marketplaces will fare when it comes to renewing that insurance for 2015. The feds have given them the option of staying put with auto-reenrollment. But that may not be the best deal for people who bought plans that are now more costly than those offered by other insurers that have cut their premiums. Unintended consequences are risked if consumers ignore the feds’ advice to review other options before reupping.

Round Two is bound to be smoother than Round One, but will still draw controversy under the red-hot spotlight. But looming on the horizon is a decision by the Supreme Court on challenges to the ability of people to receive federal tax credits to pay for insurance if they live in a state that doesn’t operate a marketplace. That decision is likely in June 2015.

Stay tuned, this fight is far from over.