Obamacare’s Second Open Enrollment Starts in Two Months — and It Is Going to be Awful

by John R. Graham, NCPA Health Alerts, September 18, 2014  (A version of this Health Alert appeared at Forbes.)

If there is one thing that the Administration and Democratic candidates have in their favor going into the mid-term elections, it is that election day is November 4, and Obamacare’s second open enrollment begins on November 15. If the dates were flipped, there is little doubt that voters affected by Obamacare would wreak havoc on the politicians who imposed the Rube Goldberg contraption of exchanges on them.

Despite having just tossed another $60 million out the window “to help consumers navigate their health care coverage options in the Health Insurance Marketplace,” the Administration will likely face an even more bemused and disgruntled population of Obamacare “consumers” than it did the first time around.

Obamacare enrollment may already be below the 8.1 million trumpeted by the Administration after the first enrolment season legally closed on March 31 (although it actually closed sometime around the middle of April). Because there are special circumstances (for example, marriage, divorce, or moving to a new state) that allow people to change coverage outside enrollment season, that number has changed.

Unfortunately, the Administration has stopped reporting exchange enrollment, which it used to do monthly. The latest evidence, from Amanda Kowalski of Yale University and the Brookings Institution, is that 13.2 million people were covered in the individual market at the end of June, representing an increase of 4.2 million above the pre-Obamacare trend. This includes both on-exchange and off-exchange coverage.

An increase of 4.2 million is much less impressive than 8.1 million. Jed Graham of Investor’s Business Daily has been following the health insurers’ filings, and sees evidence that exchange enrollment is dropping, probably due to beneficiaries not paying their premiums. Aetna, for example, had 720,000 exchange enrollees on May 20, but only 600,000 at the end of June. It expects to be down to 500,000 by the end of the year. Cigna expects the number of enrollees in the individual market (including exchanges) to drop from 300,000 last month to 280,000 soon.

Some Obamacare supporters fantasize that Obamacare enrollment may be dropping because more people are getting employer-based health benefits. These advocates see a booming economy that is invisible to American workers and employers. Although most of us with full-time jobs have hung on to our health benefits (according to the Kaiser Family Foundation’s latest survey of employers), there are still way too many part-time workers whose hours have been cut back. One major factor in employers’ unwillingness to give part-timers more hours, or hire full-time workers, is the burden of Obamacare.

There are more likely reasons for people to drop out of Obamacare. Healthy people may have paid their premiums for a few months and then decided that there was little value in the narrow plans offered. Sick people may have received treatment and then dropped coverage because they do not need it anymore.

Plus, the Administration is finally getting a grip on enrollees’ eligibility for subsidies, based on income or immigration and citizenship status. That has recently led to bad news for almost half a million Obamacare enrollees, who have been told that they are about to miss the deadline for cleaning up their paperwork. About 115,000 will be dropped at the end of September, if they cannot verify their citizenship or immigration status. Another 363,000 will have their subsidies clawed back, because they have not verified their incomes. Many of these will find the full premiums too high to handle, and drop out.

There is no evidence that the glitches that made the federal and state exchanges such a tragically comic opera last season have been fixed. Consumers whose special circumstances have made them eligible for enrollment report miserable and confusing customer service — even if they do not expect a subsidy! In Washington, DC, an individual has to buy a policy form the exchange (DC Link), whether they can claim a subsidy or not. One DC mom applied on June 4 for coverage for her daughter. As of August 27, it still had not been processed. This mom is a Harvard-educated lawyer who worked as in-house counsel to the Washington Post for 19 years and now works part time for Goldman Sachs. If this woman cannot “navigate” the exchange, what hope is there for a mere mortal?

If Republicans win the Senate in November, Obamacare’s second open enrollment might give them some leverage to “reform the reform”, if not to repeal the whole law in 2015. I think a good first step would be to shut down the exchanges, and let Obamacare beneficiaries buy their policies directly from insurance agents, either in-person or online.

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