Healthcare.gov may or may not be fixed, depending on who one listens to (and if one reads the WSJ's, "Errors Continue to Plague Government Health Site [5]" this morning, there is much more fixing left despite the administration's most sincere promises), but a greater issue is already looming: payment. "We have a bigger number of applicants than people who have paid," Aetna Chief Financial Officer Shawn Guertin said in an interview today in New York. "That’s a situation that I am a little bit worried about, that people will think they have completed the process but haven’t paid the premium yet." Whether Americans didn't realize there would be an actual payment involved in America's socialized healthcare system, or simply there is too much confusion over how the process is run, is irrelevant - the bottom line is that for whatever reason people are simply not paying their premiums.
As Bloomberg reports [6], the disjointed process of having customers shop through the government-run marketplace and then pay insurers separately has created a risk that people who have chosen a plan won’t actually be covered Jan. 1. And if people don’t pay by Dec. 31, insurers may end up stuck with a disproportionate number of sicker and costlier customers.
“You have to remember that many times we are dealing with low-income people,” Robert Laszewski, an Alexandria, Virginia-based consultant to carriers, said in a telephone interview last week. “They signed up and they certainly want the insurance, but do they have the money or have they changed their mind by Dec. 31? Nobody’s done this before.”
And while the government has been touting the surge in sign up numbers, with the CMMS announcing yesterday that some 365,000 people have signed up for a private plan through November, what the government has not said is how many of these people have already paid their premium. Judging by the Aetna CFO remarks there is a major, gaping discrepancy between the two. And even if people do expect to get completely free healthcare, that is not what Obamacare is about, at least not yet. So suddenly Obama may have a situation where he has millions signed up for the ACA, and only a fraction has actually paid. Recall that Obama has a goal of 7 million sign ups by the March 31 end of open enrollment.
In the meantime, while it remains to be seen if the new plans will be feasible, the old healthcare plans have already been largely scrapped.
Aetna, based in Hartford, Connecticut, also said it faces too many administrative hurdles to reinstate policies that it’s terminating next year because they don’t meet the new standards set by the health law. Hundreds of thousands of people around the country have gotten cancellation notices from insurers this year, prompting a political firestorm for President Barack Obama.
Obama responded last month by giving insurers and state regulators the option of extending the policies by an extra year. Aetna decided it would be too difficult to do in time for Jan. 1, Guertin said. Some customers were able to renew their policies early before the termination notices arrived. Guertin declined to say how many.
“It gets them a plan frankly that we’re ready to service,” he said. “It would just be too administratively burdensome to try to get everything ready to restore all the old plans.”
Well, nobody said central planning works everywhere. The good news that for now, at least, the fourth - monetary - branch of government is offsetting any and all other disappointments created by the legislative and executive. Because no matter how vast the shock, or how acute the disappointment, one can always point to an S&P that is just shy of all time highs. And all is well if the "markets" say it is...