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ObamaCare Update: Mission Not So Accomplished

June 13, 2014 J,

A little more than one month ago, President Obama celebrated the end of open enrollment for Obamacare by saying the debate “should be over” and “this thing is working.” Today, Americans are learning that at least 2.1 million people have discrepancies in their applications that could impact what they pay for coverage, the Congressional Budget Office can no longer say whether it will reduce the deficit or add to it, and a new analysis by the University of Minnesota finds that over the long-term the number of uninsured will increase and prices will jump. The debate isn’t over; Obamacare isn’t working.

Data Discrepancies

2.1 Million People Enrolled For Taxpayer-Subsidized Health Insurance Have Data Discrepancies In Their Applications That Could Affect What They Pay For Coverage Or Their Legal Right To Benefits.
“A huge new paperwork headache for the government could also be jeopardizing coverage for some of the millions of people who just got health insurance under President Barack Obama’s law. A government document provided to The Associated Press indicates that at least 2 million people enrolled for taxpayer-subsidized private health insurance have data discrepancies in their applications that, if unresolved, could affect what they pay for coverage, or even their legal right to benefits. … The May 8 document provided to the AP said that 2.1 million people enrolled through the new health insurance exchanges were ‘affected by one or more inconsistency’ as of the end of April.” (Richard Alonso-Zaldivar, “Now Application ‘Inconsistencies’ Vex Health Law,” AP, 6/4/14)


The 2.1 Million People With Data Discrepancies Represent 39% Of Signups Through HealthCare.gov And Could Climb When Including State-Run Exchanges.

“The final number affected could well be higher. According to the administration the 2 million figure reflects only consumers who signed up through the federally administered HealthCare.gov website and call centers. The government signed up about 5.4 million people, while state-run websites signed up another 2.6 million.” (Richard Alonso-Zaldivar, “Now Application ‘Inconsistencies’ Vex Health Law,” AP, 6/4/14)

“Most Of The Data Conflicts Involve Important Details On Income, Citizenship And Immigration Status — Which Affect Eligibility And Subsidies.”(Richard Alonso-Zaldivar, “Now Application ‘Inconsistencies’ Vex Health Law,” AP, 6/4/14)

Trying To Resolve These Data Discrepancies Requires A “Laborious Effort” And “Hands-On Attention” And Is Limited By Current System Access And Functionality.
“The HHS request is supposed to specifically describe any information that the government needs to verify. It may not be that easy. The document provided to AP describes a laborious effort to try to resolve the problems, largely requiring hands-on attention from a legion of workers employed by government contractor Serco, Inc. ‘Current system access and functionality … limits the ability to resolve outstanding inconsistencies,’ said the document. ‘A phased approach is proposed, initially leveraging manual processes.’” (Richard Alonso-Zaldivar, “Now Application ‘Inconsistencies’ Vex Health Law,” AP, 6/4/14)

Cost Estimates For Obamacare

The Congressional Budget Office (CBO) Says It Is No Longer Possible To Assess The Overall Fiscal Impact Of The Affordable Care Act.
“Four years after enactment of what is widely viewed as President Barack Obama’s key legislative achievement, however, it’s unclear whether the health care law is still on track to reduce the deficit or whether it may actually end up adding to the federal debt. In fact, the answer to that question has become something of a mystery. In its latest report on the law, the Congressional Budget Office said it is no longer possible to assess the overall fiscal impact of the law.” (Paul M. Krawzak, “Fiscal Diagnosis Only Gets Tougher For Health Care Law,” Roll Call, 6/4/14)

Not Assessing The Overall Fiscal Impact Of The Affordable Care Act Will Make It Politically Easier To Continue Delaying Pieces Of It And Hiding The Resulting Cost Increases.
“That conclusion came as a surprise to some fiscal experts in Washington and is drawing concern. And without a clear picture of the law’s overall financing, it could make it politically easier to continue delaying pieces of it, including revenue raisers, because any resulting cost increases might be hidden.” (Paul M. Krawzak, “Fiscal Diagnosis Only Gets Tougher For Health Care Law,” Roll Call, 6/4/14)

The Affordable Care Act Was Sold On The Promise That It Would Reduce The Federal Budget Deficit.
“For Democratic lawmakers who were hesitant to sign onto the sweeping 2010 health care law, one of the most powerful selling points was that the Affordable Care Act would actually reduce the federal budget deficit, despite the additional costs of extending health insurance coverage to the uninsured.” (Paul M. Krawzak, “Fiscal Diagnosis Only Gets Tougher For Health Care Law,” Roll Call, 6/4/14)

The CBO Originally Project That The Health Care Law Would Reduce The Deficit By $120 Billion Over Ten Years.
“When Congress passed the health care law in 2010, the CBO estimated it would reduce the deficit by more than $120 billion over a decade, compared to the agency’s current-law baseline projection of spending, revenue and the deficit. That meant the health care law would, in effect, pay for itself and deliver an additional fiscal bonus.” (Paul M. Krawzak, “Fiscal Diagnosis Only Gets Tougher For Health Care Law,” Roll Call, 6/4/14)

It’s Unclear To What Extent The Promised Savings Are Being Realized Following “A Chaotic Start And A Series Of Delays Or Adjustments In Various Provisions Of The Act.”
“The CBO based its estimate on the assumption that the law, which included hundreds of billions of dollars’ worth of Medicare cuts and tax increases to pay for health care subsidies, would be implemented as written. Now, after a chaotic start and a series of delays or adjustments in various provisions of the act, including an employer mandate that was expected to bring in new tax revenue, it’s unclear to what extent those promised savings are being realized.” (Paul M. Krawzak, “Fiscal Diagnosis Only Gets Tougher For Health Care Law,” Roll Call, 6/4/14)

The Obama Administration Has Made “Numerous Adjustments To The Implementation Of The Law” That Affected Revenue Or Savings Since The Last Time The CBO Produced An Estimate Based On The Entire Law In 2012.
“The last time the CBO produced an estimate based on the entire law was in 2012, when the agency said that a GOP proposal to repeal the law would add $109 billion to the deficit over a 10-year period. That implies the CBO still thought two years ago that the law would save money. Since then, the administration has made numerous adjustments to the implementation of the law, reducing the revenue it was supposed to raise or savings it was expected to achieve. Last year, for example, the IRS delayed the employer mandate until 2015 from 2014. And earlier this year, the agency extended the delay for another year for certain employers.” (Paul M. Krawzak, “Fiscal Diagnosis Only Gets Tougher For Health Care Law,” Roll Call, 6/4/14)

Premiums And Coverage

A University Of Minnesota Study Suggests An Increase In The Number Of Uninsured By 2024 Due To A Drop-off In Both Individual And Employer Coverage.
“Stephen Parente, a University of Minnesota health economist who advised Sen. John McCain’s (R-Ariz.) 2008 presidential campaign, used the Obama administration’s final 2014 enrollment reports and his microsimulation model to project health plan prices and enrollment over the next decade. His projections, shared first with the Washington Post, find an increase in individual plan enrollment in 2015 and 2016, before sharply dropping off in 2017 and then slowly decreasing below 2015 levels by 2024. At the same time, he projects a steady decrease in employer coverage that will be steeper than the gains in Medicaid enrollment, resulting in a greater number of uninsured 10 years out.” (Jason Millman, “Why The Major Test For Obamacare Premiums Might Wait Until 2017,” The Washington Post’s Wonkblog, 5/27/14)

Two Factors In The Drop-Off In Coverage Are The Expiration Of ACA Programs Meant To Blunt Major Rate Hikes And The Phasing In Of New Health Plan Requirements.
“So, how does Parente’s model explain the big drop-off in coverage between 2016 and 2017? He cites two major factors: the scheduled expiration of ACA programs meant to blunt major rate hikes and the phasing in of new health plan requirements as old health plans come to an end.” (Jason Millman, “Why The Major Test For Obamacare Premiums Might Wait Until 2017,” The Washington Post’s Wonkblog, 5/27/14)

The Study Also Suggests A “Big Price Jump” In Premiums In 2017. “Parente’s model finds these factors will have the most significant affect [sic] on 2017 premiums for less-robust plans in Obamacare’s ‘metal tiers.’ These include catastrophic and bronze-level health plans, which have the cheapest premiums but the highest out-of-pocket costs. The effects will differ by state, but the national picture shows a big price jump for bronze and catastrophic plans between 2016 and 2017 — premiums for the average individual bronze plan, before subsidies, are projected to climb between $2,132 and $4,174 between those two years.” (Jason Millman, “Why The Major Test For Obamacare Premiums Might Wait Until 2017,” The Washington Post’s Wonkblog, 5/27/14)

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