Obamacare officially went live at midnight. This means that 2.1 million Americans [8](the latest enrollment number provided by the administration) will be given a chance to exercise their new plans at hospitals and clinics across the country (it was unclear what the latest number of Americans kicked off their existing plans was most recently: the tally was 4.0 million [9]as of mid-November and it is fair to assume it has risen since then). And then the real glitches will begin.
We reported two weeks ago [10] that navigating the healthcare.gov labyrinth successfully and "signing up" for Obamacare is one thing; actually activating coverage by making a payment is something totally different. We added that "if people don’t pay by Dec. 31, insurers may end up stuck with a disproportionate number of sicker and costlier customers."
It is this "shock" realization that one's Obamacare plan is not active until after the healthcare service has been rendered, that may hit as many as 50% of all enrollees, which means that of the 2+ million Americans who believe they have coverage, up to 1 million is about to be served with a bill which they can't afford. This also happens to be the main story across various media outlets today.
First, The Hill [11]:
Enrollment deadline delays and processing errors at HealthCare.gov have been an administrative nightmare for insurers, and may leave some consumers discovering that they don’t have the insurance they thought they purchased when they show up at the doctor’s office.
It’s also likely that some people think they have insurance under ObamaCare but do not because they have yet to make their first premium payment. Until they do, they aren’t actually insured.
In Washington and Nevada, only about 50 percent of enrollees have made their first premium payments. Those are the only states that provide the breakdown.
“The biggest risk now is people thinking that by picking a plan, that they’re insured, when in fact final step is paying the premium,” Larry Levitt, a senior vice president with the Kaiser Family Foundation, told The Hill. “I haven’t seen good numbers on how many people are paying premiums, so that to me is the uncertainty.”
Next, it's Reuters' turn [12]:
"It will be difficult for us to actually verify coverage - that's my concern," said Dr. William Wulf, CEO of Central Ohio Primary Care, which has 250 primary care physicians.
The task could be made more difficult by decisions by the U.S. government and many states to push back enrollment deadlines toward the end of the year, and to allow some patients well into January to pay for coverage that is retroactive to the start of the year.
The late deadlines mean that many enrollees who seek care initially may lack insurance cards or other proof of coverage. Wulf said his physician offices will assume that an existing patient is covered if they claim to be when they come in for appointments and their coverage cannot be verified immediately. But if they require expensive tests, such as MRIs or heart-stress tests that can cost up to $700, the Ohio practice will check with insurers first to make sure the patient has coverage.
Similarly, Dr. Andy Chiou, CEO of Peoria Surgical Group Ltd in Illinois, said that if the practice finds a "significant minority" of its patients do not have coverage when they believe they do, it might delay elective surgeries for patients until their insurance is confirmed.
"For the protection of patients and us, we'll have to say, 'Sorry, you don't have insurance,'" Chiou said.
That means 1 million Americans, some of whom are very ill, are about to get a big new year's disappointment from their doctor.
To be sure, some stop gap measures have been implemented: the Hill reports that some big insurers "will allow consumers to pay their first premium by Jan. 10 and still be insured on Jan. 1. In addition, Walgreens and CVS Pharmacies announced this week that they will provide up to a month of no-cost medications to consumers that haven’t received their ObamaCare IDs yet, but can prove they enrolled." However, for those who expected Obamacare to be a deus ex with zero payment at all, which appears to have been the case at nearly a majority level, no temporary measures will fix the situation that there is still a payment to be made: a payment which millions simply can not afford.
Needless to say, with 2014 an election year, the stakes for the administration are huge:
For the Obama administration, the political stakes are high in ensuring a smooth transition period for coverage, particularly after the website's problems damaged the popularity of the Democratic president and the healthcare overhaul, his top domestic achievement.
Republicans who have called Obamacare a costly program that will rob many Americans of insurance choices have said they will make Obamacare's problems their top issue in the November 2014 elections, when control of Congress will be at stake.
White House health policy adviser Phil Schiliro said on Tuesday that because of the intense focus on Obamacare, "problems that have never gotten attention before will get some attention now."
The Hill adds:
There’s little doubt the success of the healthcare law will be a big factor in Democratic efforts to retain the Senate, where Republicans need to gain six seats to win back a majority.
Doing so would be a huge blow to Obama’s remaining years in office, virtually assuring him lame-duck status through the rest of his term.
So there’s a lot at stake for the administration to ensure things go smoothly, starting on New Year’s Day.
At this point, some opt out to fall back to a naive belief that things will be well:
John Holahan, a fellow at the non-partisan Urban Institute, said the idea that people will be blindsided is foolish. “If they don’t pay they don’t have insurance, that’s part of the deal, you’re not really enrolled,” he said. “But I assume anyone who goes through the trouble of enrolling will go ahead and pay.”
Actually, most who have the free time to go through the trouble of enrolling likely don't have a source of disposable income.
A more realistic conclusion comes from Joe Antos of the conservative American Enterprise Institute, who predicted the flood of applications would be too much for the administration and the insurers to handle before the newly covered head out to exercise their plans. “There’s no way the insurance industry could hire enough people to process all that paperwork if the data was coming in correctly, and it’s not,” he said. “I think most people who think they have coverage will find some difficulty early in January."
We will find out in the coming days if the next big embarrassment for the administration will unfold and if Obama's ratings will tumble to fresh record lows as a result.