Obama Caves, Delays Obamacare As Momentum Fizzles; Customer Pool "Smaller And Sicker"

Late last night, with just 4 days left until the December 23 deadline to choose plans that will begin Jan. 1, Washington Post reported that the Obama administration finally caved and "significantly relaxed the rules of the federal health-care law for millions of consumers whose individual insurance policies have been canceled, saying they can buy bare-bones plans or entirely avoid a requirement that most Americans have health coverage."

The ability to get an exemption means that the administration is freeing these people from one of the central features of the law: a requirement that most Americans have health insurance as of Jan. 1 or risk a fine. The exemption gives them the choice of having no insurance or of buying skimpy “catastrophic” coverage. 

As was to be expected, the announcement which made the healthcare ponzi scheme far less powerful triggered an immediate backlash from the health insurance industry and "raised fairness questions about a law intended to promote affordable and comprehensive coverage on a widespread basis."

This latest rule change could cause significant instability in the marketplace and lead to further confusion and disruption for consumers,” said Karen Ignagni, president of America’s Health Insurance Plans, the industry’s main trade group.

Another health insurance official, who spoke on the condition of anonymity because he lacked authorization to discuss the matter publicly, pointed out that the hardship exemption also gives one group the ability to buy coverage whenever they want, rather than during annual open-enrollment periods. As a result, he said, more people might not buy insurance unless they get sick.

Well, Karen: welcome to central-planning, where whatever can go wrong, ultimately does, and as for your profit margins which you had modelled as surging in the coming years: feel free to model them lower.

How did the latest humiliation for the administration come about? WaPo explains:

At a news conference in mid-November, an apologetic Obama relented to the criticism, announcing that the federal government would let insurance companies continue for another year to offer individuals and small businesses health plans that do not meet the new requirements. The decision, however , is up to each state’s insurance regulator, and not all have gone along.

 

This second change, prompted by a group of Democratic senators — most of whom face tough reelection campaigns next year — goes substantially further in accommodating people upset about losing their policies. The latest rule will allow consumers with a canceled health plan to claim a “hardship exemption” if they think the plans sold through new federal and state marketplaces are too expensive.

To be sure, the 2014 elections played a key role: As The Hill reported, the policy shift was laid out in a letter to Sens. Mark Warner (D-Va.), Jeanne Shaheen (D-N.H.), Mary Landrieu (D-La.), Heidi Heitkamp (D-N.D.), and Tim Kaine (D-Va.), who asked the administration on Wednesday to clarify whether those who had their plans cancelled could qualify for the exemption. The Washington Post pointed out the lawmakers faced tough reelection campaigns next year, or were from states that President Obama lost in last year’s election. Could it be that Obamacare is actually... unpopular with the broader population? Say it isn't so!

WaPo also notes that "it is unclear how many people facing canceled policies will choose no insurance, bare-bones coverage or a plan through the insurance exchanges that meet new federal standards."

Actually, it is clear: according to the WSJ the answer is "very few", especially when one adds the healthcare law's rolloug problems. The WSJ adds that "insurers pressing for last-minute enrollees under the health-care law say they are running into a worrisome trend: Customers who were put off by the insurance marketplaces' early troubles are proving hard sells. Many people thwarted by the technical problems of HealthCare.gov are reluctant to try again, citing frustration with the federal site, web-security concerns and the pressure of the holidays, several insurers say."

Geisinger Health Plan, a central Pennsylvania insurer, has tracked down more than 4,000 people who expressed interest earlier this fall, urging them to attend sign-up events this week.

 

So far, few have responded: About a dozen have shown up at each event, said Lisa D. Hartman, the insurer's director of commercial marketing.

 

"It might be getting too late for people to make a move," Ms. Hartman said. "We've had some people telling us it's too close to the holidays."

 

Call-center workers at Arches Health Plan, a new Utah plan, have been working through a list of about 4,000 people who unsuccessfully sought coverage in October and November. Insurers have identified about 2,000 people who are still interested and have managed to enroll about 90% of them.

 

"We definitely have lost a lot of momentum, where people said, 'You know what, I'm going to come back in January,'" said Shaun Greene, Arches' chief operating officer.

And the punchline: With only days before the Monday deadline to sign up for coverage that starts Jan. 1, insurers are facing a much smaller, and sicker, pool of customers than hoped for.

Like we said: anything that can go wrong... oh look, over there, the Stalingrad & Propaganda 500 just hit a new all time high!