ObamaCare and Health Exchanges: Damn the Insurers,  Full Speed Ahead

Eager to maximize coverage under the Affordable Care Act, the Obama administration has allowed large numbers of people to sign up for insurance after the deadlines in the last two years, destabilizing insurance markets and driving up premiums,  health insurance companies say.

Robert Pear,  “ “Insurers Say Costs Are Climbing as More Enroll Past Health Act Deadline,” New York Times, January 10, 2015

It is in the Obama administration’s political best interest to expand the number of people joining health exchanges, even if it skirts the rules of eligibility for the exchanges.   It is not in the health insurers’ best interest, who must satisfy their stakeholders by making a profit.

Over the last  two years,  the administration sent emails to millions of Americans,urging them to sign up even after the enrollment deadline.  The administration's emails, said  nothing about these" special enrollments" failing to meet eligibility requirements.  

The "special enrollment" strategy worked.    Millions more signed up but many of the new enrollments had waited until they were sick or needed services, thus driving up insurance costs.   This was made possible because the administration had created 30 “special enrollment” categories skirting the eligibility rules and allowing more to enroll.

As a result of  this artful  rule-breaking,  insurance markets have been destabilized and premiums and deductibles have skyrocketed ,  making health insurance unaffordable for many  not subsidized  in the health exchanges.  To make matters worse,  many of those enrolling past deadline time,  drop coverage after receiving services, depriving companies of premium revenues.

Major insurers, like  Blue Cross Blue Shield Association plans,  Aetna, UnitedHealth, Anthem,  and Kaiser Permanente have complained about these "special arrangements," which drive up costs.

Health and Human Services  has responded to these complaints  by saying people must be allowed to sign up when they have legitimate reasons, like getting married,  having a baby,  developing a serious medical condition,   being dropped by an employer,    not understanding the rules or being able to decipher health exchange language,  or being unable to resolve questions of citizenship.

Whatever the reasons,  and they seem endless,  insurers say the post-deadline "special  enrollment"categories threaten the affordability of coverage and the viability of federal health exchanges.   

The full impact of this federal reasoning will not be felt until April or May of 2017,  when the new premiums are announced.   Meanwhile in the midst of all this confusion,    the Obama administration’s gain  is the ineligible’s gain the insurer’s pain.   In any event, in the end the government  will have to bail out the insurers.  Besides, the government, unlike the insurers,  is too big to fail  It has good intentions,  is using other people’s money,  namely that of the taxpayers.