Obamacare’s Lowered Expectations

Obamacare’s Lowered Expectations
September 30, 2013

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)

Consumer Power Report #390

On the eve of Obamacare’s launch, the White House is lowering expectations for it, downplaying their assumptions for signups and emphasizing this won’t be a launch so much as the start of a conversation with the American people, and so on and so forth. The truth, of course, is they’re downplaying things because the exchanges, implementation, and promotional efforts for Obamacare are so far behind and have had such little impact on the very people the approach is intended to reach.

How little impact?

A new poll finds a majority of the public -- especially those lacking health coverage -- is unaware that new insurance marketplaces created by the health law are slated to open ... The poll also found deep skepticism of media coverage of the law, with more than half the public saying they don’t trust any media source to provide credible information. Two-thirds of the public were not aware when the new online marketplaces open to allow people without employer coverage to shop and purchase their own health policies, according to the poll by the Kaiser Family Foundation. These exchanges open Tuesday. Despite outreach efforts by the Obama administration and supporters of the law, the poll found the number of uninsured unaware of the opening date is even greater than the public at large, with three out of every four not knowing the marketplaces are supposed to open in October.

The rollout has not gone as expected, or as supporters had hoped. Even hours before open enrollment is set to begin, confusion reigns in states where navigators haven’t even gotten a chance to use the systems they’re supposed to guide people through. These IT problems are significant, but they will come and go in the context of these political battles. Some will seize on them as signs Obamacare will crash and burn. This isn’t the case, though – it’s not the glitches that will undermine Obamacare, it’s the effect it has on the people who already have insurance.

I don’t know whether to laugh or cry. My health insurer, Kaiser Permanente, has finally calculated what our family’s new health insurance rates will be under the grotesquely misnamed Affordable Care Act (a.k.a. Obamacare.) The upshot: my premiums are about to rise by 114.6%. My wife’s rates? Up 109%. Our kids? Don’t ask.

Yes, it’s time to say goodbye to my current plan, with its $232-a-month premium. That plan is being discontinued, I’m told, because it “does not meet the requirements of the ACA.” It was a nice plan, with low premiums, free physical exams, a high deductible and eligibility for a Health Savings account. We got access to Kaiser’s lower in-plan rates for minor medical care, and we had the peace of mind of substantial coverage if anything catastrophic ever happened. But that plan is going the way of Lake Superior sturgeon or the Hetch Hetchy meadows. It’s vanishing in favor of what someone else has decided would be progress. So now I’m being offered what’s dubbed the KP CA Bronze HSA 4500/40%. My new premium will $519.25 a month -- more than double my old rates.

I wish there was some way of regarding this new “bronze” plan as an improvement over what we had before. But that’s really not possible. The new deductible will be higher ($4,500 instead of $4,000.) My primary care benefit is worse (I’m now being told to pay 40% of billed charges, instead of a cap of $40.) My inpatient hospital coverage is worse (I’m to pay 40% instead of 30%.) Terms on emergency-room visits and prescriptions drugs are inferior, too. There’s probably a “silver” or “gold” plan that would match or even top my old coverage. But then I wouldn’t be looking at a mere 114.6% increase in my premium. I’d have to pay even more.

There’s little wonder that Obamacare remains unpopular, even if you don’t call it that. On the eve of its launch, CNN found 38 percent of Americans favor it and 57 percent oppose it – even when described in neutral terms. That measure of success or failure will have more to do with Obamacare’s survival as a longterm policy reality than any of the early glitches – and that’s something the American people themselves will determine according to their own measures.

-- Benjamin Domenech


IN THIS ISSUE:


SHUTDOWN APPROACHES AS SENATE POISED TO REJECT CR

The Senate is expected to reject decisively a House bill that would delay the full effect of President Obama’s health care law as a condition for keeping the government running past Monday, as Senator Harry Reid, the Democratic majority leader, expressed confidence that he had public opinion on his side.

Angering Republicans who lead the House, Mr. Reid kept the Senate shuttered on Sunday, in a calculated move to stall action on the House measure until Monday afternoon, just hours before the government’s spending authority runs out at midnight.

Without a complete capitulation by House Republicans, large sections of the government would close, hundreds of thousands of workers would be furloughed without pay, and millions more would be asked to work for no pay.

Polls show that the public is already deeply unhappy with its leaders in Congress, and the prospect of the first government shutdown in 17 years would be the latest dispiriting development. With a temporary shutdown appearing inevitable without a last-ditch compromise, the battle on Sunday became as much about blaming the other side as searching for a solution.

House Republicans, who insisted that they had passed a compromise over the weekend that would avoid a shutdown if only the Senate would act, blamed Mr. Reid for purposely running out the clock.

“Unlock those doors, I say to Harry Reid,” said Representative Ann Wagner, a Missouri Republican who stood on the steps of the empty Senate on Sunday with a dozen of her House colleagues. “Come out and do your job.”

But Mr. Reid sees little incentive or political advantage in bowing to those demands. He has held his 54-member caucus together so far. And because of support from some Senate Republicans who have called it a mistake for House Republicans to try to force changes to the health care law in an unrelated fight over the budget, Mr. Reid’s hand has been strengthened.

SOURCE: New York Times


HIGH STAKES FOR BOTH PARTIES IN LAUNCH

The president has staked his legacy on tens of millions of Americans who don’t get health benefits at work being able to start signing up for insurance coverage, even if they have a preexisting medical problem.

A meltdown in this new system would be politically damaging for Obama and his Democratic allies, who have said since the law passed in 2010 that Americans would embrace the Affordable Care Act once they realized its benefits.

For Republicans, the stakes also are high. Warning of an impending catastrophe, the GOP has waged an unprecedented campaign to stop the law from taking effect -- including the current threat to shut down much of the federal government if Obama does not yield. A relatively drama-free rollout of the law this fall could shatter what has been a key pillar of the Republican agenda.

More worrisome still to some Republican strategists: The law’s new benefits may prove popular with millions of Americans who have been unable to get health insurance.

“We are replacing years of fighting with a reality, and that reality will shape public attitudes from here forward,” said Bill McInturff, a veteran Republican pollster. “If it works, attitudes about the law could change. But this country will have limited patience and tolerance if it doesn’t.”

Enrollment is scheduled to begin Tuesday in new state-based insurance marketplaces authorized by the law. Consumers who don’t get health benefits at work will be able to shop on the marketplaces for health plans, which must provide a new basic set of protections. The coverage will take effect Jan. 1.

Few on either side think opinions will change overnight, as a relatively small number of consumers will initially use these markets. Only about 7 million people are expected to enroll in 2014, rising to 25 million by 2018, according to the nonpartisan Congressional Budget Office. An additional 12 million low-income Americans ultimately will sign up for government Medicaid programs under the law, the budget office says.

By contrast, more than 160 million people will continue to get health benefits through the decades-old system of employer-sponsored coverage, according to the projections.

Obama and his allies, however, are counting on a gradual transformation in public opinion. As millions of Americans get guaranteed health insurance and begin sharing personal stories with friends and neighbors, what has largely been a political debate will start transforming into a discussion about consumer experiences, they believe.

SOURCE: Los Angeles Times


AFFORDABLE CARE ACT OR RIPOFF?

It is no wonder the Obama administration branded its signature health care legislation the Affordable Care Act. For many Americans the basic problem with medicine -- health insurance and health care -- is that it has simply become too expensive, especially in a sluggish economy.

As Americans begin signing up this week to buy insurance, they will begin to test the legislation’s tantalizing promise to make health financially viable. Will the policies deliver care at manageable prices, or will “affordable” seem like a hollow promotion?

That probably depends a lot on patients’ needs, where they live and -- importantly -- their preconceptions of what health insurance is supposed to do, experts say. The insurance marketplaces, or exchanges, will sell four different levels of plan -- bronze, silver, gold and platinum -- with the more expensive plans offering the most extensive benefits. And while premiums for the low-end plans may be relatively cheap, they still require significant out-of-pocket payments, in the form of co-payments and deductibles that could add up to more than $6,000 a year.

“The perception of cost will vary a lot,” said Dan Mendelson, the chief executive of the consulting firm Avalere Health and a former associate director for health at the federal Office of Management and Budget.

Mr. Mendelson predicted that the plans would be welcomed by people who had wanted to be insured but couldn’t obtain or afford insurance because of pre-existing conditions, for example, and for low-income earners who would qualify for heavy subsidies for premiums. “For some people it will be free, and that is a pretty good value,” he said.

But the required outlays might seem like a lot of cash to healthy families who previously did without insurance. And they could be downright shocking to patients who last had insurance a decade ago, when health plans tended to require little if any patient payments.

“More of the cost responsibility is being shifted to patients, and more to patients with serious chronic illness,” Mr. Mendelson said, noting that the silver plans, the second cheapest, are intended to cover only about 70 percent of a patient’s medical costs. “This is different from the concept of insurance we’ve been carrying around for a long time. So people who sign up for insurance thinking all will be covered are in for some surprises.”

SOURCE: New York Times


THE HEAVY LIFT OF LAUNCHING THE EXCHANGES

For the state exchanges to work, normally separate computer systems have to talk to each other and it is EngagePoint Inc.’s job to build software bridges between those systems. When a consumer tries to sign up online for insurance, the state’s computers have to interact with federal computer systems to verify the person’s Social Security number, citizenship status and income. The state exchange also has to link up to the private insurance companies offering policies on the exchanges.

Within minutes, the program has to produce a final answer, telling enrollees what plans are available, how much in federal subsidies they are eligible for and whether they qualify for Medicaid. There are thousands of different scenarios determining whether a person might qualify for help, Mr. Goel said.

“Eligibility is the 800-pound gorilla,” he said.

Mr. Goel said he sees the beginning of open enrollment Tuesday as mile five in a 26-mile marathon. “We’ll pause, take a drink of water and run again,” he said.

Technology tasks are occupying an army of thousands of contractors ahead of the biggest change in the U.S. health system in decades--which is also the first to put online enrollment at the core.

Fourteen states and the District of Columbia are running their own exchanges, with the rest leaving all or part of the task to the federal government. Mr. Goel’s privately held EngagePoint won contracts to help build exchanges in two of the 14 states, Minnesota and Maryland.

In the past year, Mr. Goel, 44 years old, has added more than 200 people to the company’s staff of about 400, and expects to more than double last year’s revenue of $23 million. With his older brother, he started a health-care software company in 1991 that in 2004 was sold to WebMD Corp. His next venture was EngagePoint, founded in 2007. The company has been based in Florida but is officially moving its headquarters to Calverton, outside the nation’s capital, in late October. It is also working in two other states to upgrade their Medicaid systems and connect to the federal exchange.

SOURCE: Wall Street Journal


SPANISH LANGUAGE EXCHANGE WEB SITE DELAYED

Many are upset the Spanish-version for the healthcare exchange won’t be ready for open enrollment which starts on Tuesday.

The Spanish-language enrollment website won’t be up and running until Oct. 21, almost three weeks after open enrollment begins, KNXV-TV reported.

Victoria Ortiz was born and raised in Mexico City but moved to the United States after she got married 10 years ago. Ortiz says many in the Hispanic population will find the website very hard to navigate. Ortiz says the announcement is just the latest hit the Hispanic community is taking.

“We are really angry because they are just talking to us because they wanted to get our vote,” Ortiz said.

Ortiz says it’s not just the down website, but that Obamacare in general is difficult for Latinos who don’t speak English to understand.

Even though there is information in Spanish, many of the words don’t translate correctly.

SOURCE: Denver Post


OBAMACARE MEDICAL DEVICE TAX ASSUMES BIG ROLE IN BATTLE

A once-obscure tax on medical devices that’s part of Obamacare is playing a pivotal role in the fight over the government shutdown.

Along with a one-year delay in the president’s health law, House Republicans have included provisions repealing the 2.3 percent tax on medical devices in their bill to fund federal agencies into the next fiscal year. And some have suggested the move to wipe out that tax might -- at some point-- become a path to compromise with the Senate. But Senate Democratic leaders have so far opposed the device tax as part of a short-term spending bill.

A spokesman for House Speaker John Boehner (R-Ohio) said Sunday that Republicans would be willing to at least consider a still-theoretical revised spending measure. The Obamacare delay would be dropped, but the device tax repeal retained.

“That is a potential compromise, if the Senate does that,” said spokesman Michael Steel. “We will make that decision when and if the Senate acts.” He called the repeal “common sense.”

Appearing on Fox News Sunday, House Majority Whip Kevin McCarthy (R-Calif.) noted 79 senators have already voted to repeal what he called the “pacemaker tax” and suggested the spending measure the House approved very early Sunday was not the final offer. If the Senate rejects that bill, House Republicans could send them a new measure, he said.

“I think the House will get back together and, in enough time, send another provision not to shut the government down, but to fund it and it will have a few other options in there for the Senate to look at it again,” McCarthy told Fox News Sunday. “I think there will be additions that I have found in the Senate, that Senate Democrats say they can support.”

Many Democrats have expressed support for the repeal, though not necessarily in this context. And party leaders have repeatedly shot down the idea of including it in the continuing resolution, or CR.

SOURCE: Politico


RELATED LINKS

Why Colorado’s Obamacare delay is so significant.

What you need to know about Obamacare.

The Obamacare non-exemption.

11 pieces of Obamacare conventional wisdom that shouldn’t be so conventional.

Avert your eyes from the shiny object.

Obamacare’s threat to healthcare innovation.

Wide variance in the cost increases under Obamacare.

If you like your plan, you can keep it.

Will Obamacare hurt job creation?

A personalized tour of Obamacare.

Wonkblog Debate: Will Obamacare Work?

Benjamin Domenech

Benjamin Domenech (bdomenech@heartland.org) is a senior fellow at The Heartland Institute. Domenech... (read full bio)