Consumer Power Report #393
President Obama and the White House are swinging into campaign mode on his health care law today, with a Rose Garden event following multiple defensive Sunday appearances, announcements of changes to Obamacare’s homepage, and an admission that we’ve moved past the “glitches” talking point to one of “unacceptable technical problems.” In attendance at the Rose Garden will be some people who’ve successfully enrolled in Obamacare. Unlikely to be in attendance are any of the hundreds of thousands of people who’ve received recent notices that their coverage will be dropped – 460,000 in Florida and California alone.
Health plans are sending hundreds of thousands of cancellation letters to people who buy their own coverage, frustrating some consumers who want to keep what they have and forcing others to buy more costly policies.
The main reason insurers offer is that the policies fall short of what the Affordable Care Act requires starting Jan. 1. Most are ending policies sold after the law passed in March 2010. At least a few are canceling plans sold to people with pre-existing medical conditions.
By all accounts, the new policies will offer consumers better coverage, in some cases, for comparable cost – especially after the inclusion of federal subsidies for those who qualify. The law requires policies sold in the individual market to cover 10 “essential” benefits, such as prescription drugs, mental health treatment and maternity care. In addition, insurers cannot reject people with medical problems or charge them higher prices. The policies must also cap consumers’ annual expenses at levels lower than many plans sold before the new rules.
But the cancellation notices, which began arriving in August, have shocked many consumers in light of President Barack Obama’s promise that people could keep their plans if they liked them …
Florida Blue, for example, is terminating about 300,000 policies, about 80 percent of its individual policies in the state. Kaiser Permanente in California has sent notices to 160,000 people – about half of its individual business in the state. Insurer Highmark in Pittsburgh is dropping about 20 percent of its individual market customers, while Independence Blue Cross, the major insurer in Philadelphia, is dropping about 45 percent.
The White House event is all optics, of course, which one Admin official frames compared directly to presidential pushbacks in the past: “We’re kind of thinking of it as a tech ‘surge,'” even as HHS promises “the best and brightest” from the tech community will work on fixing the problems.
But how effective will this “surge” of the “best and brightest” be, given the critical structural and organizational problems? The whole of this big New York Times piece – where contractors express skepticism the system will even be workable in mid-December – is worth reading, but this part in particular is troubling:
One major problem slowing repairs, people close to the program say, is that the Centers for Medicare and Medicaid Services, the federal agency in charge of the exchange, is responsible for making sure that the separately designed databases and pieces of software from 55 contractors work together. It is not common for a federal agency to assume that role, and numerous people involved in the project said the agency did not have the expertise to do the job and did not fully understand what it entailed.
The people close to the project spoke on the condition of anonymity because they were not authorized to discuss the system’s problems. Administration officials have been debating whether to designate one or more companies as the quarterback for information technology work on the federal exchange, a complex project that has cost more than $400 million.
The struggles of Obama’s exchanges, though, aren’t an unmitigated good for those on the right, as Ross Douthat notes.
The wreck of the exchanges may actually be worse for conservative policy objectives than a more successful rollout would have been. That’s because while conservatives think the Obamacare exchanges are overregulated and oversubsidized, they are actually closer to the right-of-center vision for health care reform than the Obamacare Medicaid expansion, which is happening no matter what transpires with Healthcare.gov… Meanwhile, the task for serious conservative reformers – already not the most politically effective bunch – might actually become harder, because they would have to explain how their plan to build an effective, exchange-based marketplace differed from the Obama White House’s exchange fiasco.
Indeed, the one clear winner in this technocratic faceplant is the faction of the right that says nothing less than full repeal is acceptable, not the one – occupied by many center-right wonks – that has moved on toward attempts to make Obamacare more market-friendly. Given the political fractures active here, there is no incentive to move on toward a new bargain, and that’s unlikely to change for at least another presidential cycle.
— Benjamin Domenech
IN THIS ISSUE:
Or some other method of exempting people, which could cause all sorts of legal issues.
White House press secretary Jay Carney hedged Monday on whether ObamaCare’s individual mandate could be delayed because of problems with the healthcare law’s enrollment web site.
Carney did not directly say the individual mandate could be delayed, but he did say that if people could not get access to ObamaCare, they would not be penalized.
Under the healthcare law, uninsured Americans are required to sign up for health insurance. If they don’t, they could be hit with a fine.
Carney was asked Monday if people would have to pay a fine if they couldn’t enroll in ObamaCare because of a glitchy website that the administration has struggled to fix.
Carney said that those “without access to affordable care due to a state not expanding Medicaid or other factors” would not be penalized. A number of states have decided against accepting federal money to expand Medicaid under ObamaCare.
Carney then dodged a question about whether the website could be one of those factors.
“We are focused on implementing the law and ensuring that people have the information they need,” Carney said.
In an interview later Monday on MSNBC, White House communications director Jen Palmieri said the administration doesn’t think it will have to make the decision because it expects to fix the healthcare law’s problems.
“If we don’t have it fixed in time is a hypothetical that we don’t expect to encounter,” Palmieri said. “We’re taking this day by day and we’re making progress every day. And we’re going to keep at it and in the meantime, we’re going to find these options of other ways for people to enroll.”
SOURCE: The Hill
The problem comes if the exchange websites aren’t fixed before people have to buy insurance to comply with the individual mandate. Under the law, the mandate applies whether or not there’s a functional exchange. That means that the penalty would be imposed even on those uninsured who had tried, and failed, to buy insurance on an exchange. Extending the open-enrollment period, as some have suggested, wouldn’t fix the problem: If you had no coverage before April 1, you’d still have to pay the penalty.
It would be unfair, though, to penalize people for failing to buy insurance from a website that’s broken. In principle, of course, one could purchase insurance off the exchange. But subsidies are only available for exchange-purchased coverage. And the whole point of the subsidies is that many Americans can’t afford insurance without them.
Fortunately, there’s a better solution. The federal government has the legal flexibility to waive the penalty for people subject to the mandate but unable to access a functioning exchange website.
Nestled in the health-care law is a “hardship exemption.” It waives the penalty for anyone who “is determined by the Secretary of Health and Human Services under section 1311(d)(4)(H) to have suffered a hardship with respect to the capability to obtain coverage under a qualified health plan.” In turn, section 1311 requires exchanges to “grant a certification” for particular individuals attesting that “there is no affordable qualified health plan available through the Exchange.”
Putting the two provisions together, it could be a “hardship” if there’s “no affordable qualified health plan available through the Exchange.” That statutory language fits this case: if an exchange doesn’t work, then no plans are available through it. Health and Human Services Secretary Kathleen Sebelius has already issued hardship exemptions for discrete groups, including people who would have qualified for Medicaid but for their state’s decision not to expand the program. She could do the same for those who can’t access an exchange.
That doesn’t mean there aren’t wrinkles. Section 1311 seems to say an exchange must grant a certification before one can get a hardship exemption. The statute is a bit ambiguous on that point, but, in a rule implementing the hardship exemption, that’s how Sebelius appears to read it. After she decides what counts as a hardship, the exchanges are supposed to process applications from individuals claiming that hardship. Then, and only then, can you get a “certificate of exemption.”
So how can you apply for an exemption through an exchange that doesn’t work? You can’t, of course. And it gets worse. Even those state exchanges that are up and running apparently don’t have the systems in place to deal with exemption applications.
Fortunately, that’s not the end of the story. The secretary is explicitly empowered in yet another provision of the law to “establish a program” for determining “whether to grant a certification” for a hardship exemption. That gives Sebelius latitude to craft sensible certification rules for the exchanges.
As things stand, the rules the secretary has put in place provide for an individualized application process. But nothing in the law prevents her from tweaking that approach. If necessary, she could draft a new rule instructing nonfunctional exchanges – including the federally operated ones – to issue blanket certifications on behalf of all of the uninsured in their states. With those blanket certifications, the penalty would be waived – and all without congressional action.
Just three of the people at the Rose Garden event today had even signed up.
President Obama invited a number of people to stand behind him as he delivered his speech on the state of Obamacare at the White House Monday morning. One of them, Janice Baker, a small business owner from Delaware, introduced the president, and Obama spoke of Baker and the others gathered there as people who have benefited from Obamacare. But after reading the White House-provided descriptions of each of those behind the president, it’s clear the administration was stretching to present people who, beyond supporting Obamacare, have actually gained from it in any tangible way.
For example, a Pennsylvania man named Malik Hassan was in the group, and this is the White House description of his situation, in full: “Malik Hassan works at a restaurant in Philadelphia. Hassan, who does not receive coverage through his employer, is looking forward to enrolling for health coverage this fall. He recently used Healthcare.gov. to process his application and is waiting for the options for potential plans in Philadelphia.”
So, Hassan is employed, not covered, and has not yet succeeded in finding coverage through Obamacare. That is, in the White House’s estimation, an Obamacare success story.
Then there is Nathaniel Hojnacki, who recently finished his schooling. Here is the White House description of his situation, again in full: “Nathaniel Hojnacki recently received his Master’s degree at Johns Hopkins University SAIS and is in an employment situation without benefits. Hojnacki recognizes the importance of coverage and is planning to enroll after he explores his coverage options on the DC exchange.”
So, Hojnacki has a job, does not have coverage, and is planning to explore finding coverage through Obamacare. Another success story.
Then there is LaJuanna Russell, of Virginia. Here is the White House description of her situation, in its entirety: “LaJuanna Russell is the owner of Business Management Associates, a consulting company in Alexandria, Virginia. Russell says she is proud to offer her employees health insurance but that it can be difficult for a small business. Russell believes that the ACA provides stability for her and her employees and is exploring what new coverage options will be available to her company under the exchanges.”
So, Russell owns a business, has employees, and believes Obamacare might help her in the future. Another success story.
SOURCE: Washington Examiner
The Obama administration also has not released enrollment figures for the 36 states that are using the federally run website, HealthCare.gov, which has been plagued with technical glitches.
In Oregon, meanwhile, state officials say it will likely take at least two more weeks before the website can process enrollments.
The delay is striking given that Oregon’s exchange has received more federal grant money – more than $300 million – than all but two other states, California and New York. Washington received $152 million.
Despite the big grant, Oregon’s exchange “is essentially closed at this point,” said Eric Graham, a partner in Lake Oswego, Ore.-based Montgomery & Graham, a brokerage with thousands of individual clients and about 1,300 business clients.
All of the firm’s 24 agents and account managers went through training and testing to become certified to enroll clients directly into the Oregon exchange but haven’t been able to enroll anyone.
“It’s really frustrating,” Graham said. “It sure started off very positively. Oregon was considered a model for other states. And to have this happen, it just boggles the mind.”
SOURCE: Kaiser Health News
The Buckeye Institute’s Robert Alt:
Today is a critical day for Ohio in the fight over Medicaid expansion. Having been rebuffed by the state legislature, which rejected Governor Kasich’s plan to accept Obamacare’s Medicaid expansion, Mr. Kasich pulled a page out of President Obama’s playbook, and went ahead and entered into an agreement with the federal government to expand anyway. Now Kasich is attempting to circumvent the ordinary legislative process, asking a special appropriations board (the “Controlling Board”) to bless his expansion after the fact. The tacit threat is that if the members of the Controlling Board don’t agree, then the Medicaid program in Ohio will go bankrupt.
The members of the Controlling Board should not be strong-armed by Kasich’s Chicago-way tactics. The Kasich administration has said time and again that Ohio will have the ability to opt out anytime it chooses. Now would be a good time to put Kasich’s theory to the test.
On the merits, Ed Meese makes the case today on NRO that Medicaid expansion is not conservative, and it certainly isn’t consistent with how Reagan acted, contrary to Kasich’s assertions. But Governor Kasich has continued to argue that expanding Medicaid is the right thing to do, consistent with what God would want us to do for the less fortunate. At this point, it is worth quoting the Gipper, who rightly said:
“The size of the federal budget is not an appropriate barometer of social conscience or charitable concern.” And equally instructive: “Generosity is a reflection of what one does with his or her own resources and not what he or she advocates the government do with everyone’s money.”
SOURCE: National Review