Obamacare Depends on Regaining 1 Million Window Shoppers

Photographer: Patrick T. Fallon/Bloomberg
The insurance marketplaces were created to help consumers access federal subsidies and choose from a menu of private insurance plans that would take effect next year.

Almost 1 million people who applied for health care on the government insurance exchanges last month left without choosing a plan, a pipeline of potential customers the Obama administration must persuade to return.

While 106,185 people enrolled, 10 times as many were far enough in the application process to be deemed eligible for coverage. Some ran into website errors, and others are taking time with a decision, the Obama administration said yesterday. It pointed out that 396,261 people were selected for Medicaid.

The administration is now banking on a surge of enrollees near deadlines in December and March to meet projections for 7 million sign-ups in the first year. That hinges on President Barack Obama’s promise to fix by month’s end the hobbled federal exchange website, a core part of the Patient Protection and Affordable Care Act of 2010.

“All roads lead to the need to fix the website,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation, a nonprofit group based in Menlo Park, California that has been tracking the health law. “They’ve also got to find a way to cut through the political noise and assure people that there’s something for them at the end of the road.”

Photographer: Patrick Fallon/Bloomberg

A patient receives vision care during the Care Harbor Public Health Clinic event at the Los Angeles Sports Arena. Close

A patient receives vision care during the Care Harbor Public Health Clinic event at the... Read More

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Photographer: Patrick Fallon/Bloomberg

A patient receives vision care during the Care Harbor Public Health Clinic event at the Los Angeles Sports Arena.

The Fate of Obamacare

The government had projected that 495,000 people would enroll in private plans in the first month, according to a memo obtained by Republicans on the House Ways and Means Committee. Higher participation is critical to keeping the costs of medical coverage down as Obama seeks to expand health care to most of the nation’s 48 million uninsured.

‘Symbol of Failure’

The poor first-month’s showing stoked reactions by Republicans, who opposed the health law when it worked its way through Congress in 2009 and 2010.

House Speaker John Boehner of Ohio said the numbers were a “symbol of failure,” and Republican Senator Pat Roberts of Kansas said the health law “should be put to pasture.” Representative Dave Camp, a Michigan Republican who chairs the Ways and Means Committee, said the administration would have to sign up 68,000 people a day to meet its year-end enrollment goal.

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Even some Democrats are losing faith because of the website’s flaws and Obama’s broken promise that people who liked their existing health policies would be able to keep them.

“A lot of Democrats are very upset that this happened, No. 1, and urging for there to be an immediate fix for it,” Representative Patrick Murphy, a Florida Democrat, said yesterday in Washington after a meeting with Obama aides.

‘Back-Loaded’ Enrollment

Enrollment is expected to be “back-loaded not front-loaded,” meaning more people will sign up closer to the first deadline Dec. 15 and a second deadline in March, Don Moulds, acting assistant secretary for planning and evaluation at the U.S. Department of Health and Human Services, said yesterday on a conference call with reporters.

“There’s not cause for concern with these particular numbers,” he said on the call.

The federal marketplace for 36 states and the exchanges run by 14 others and Washington, D.C., were created to help consumers access tax credits and choose from a menu of private insurance plans as part of the health law. Only 26,794 sign-ups for private plans were made through the federal marketplace in the first month after its Oct. 1 start. The rest, 79,391, came from 11 of the states running their own marketplaces, most of whom have experienced fewer technical flaws.

The figures reflect people who have selected a plan without necessarily paying their first premium, the final step in enrollment that must be completed by Dec. 15 for coverage to begin Jan. 1. Those who don’t find health insurance by March 31 may have to pay a fine of as much as 1 percent of their income.

Taking Time

“The marketplace is working; people are enrolling,” Kathleen Sebelius, the U.S. health secretary, told reporters on the conference call. “We can reasonably expect these numbers will grow substantially over the next three months.”

More people who came to exchanges in October were determined to be eligible for Medicaid, the state-federal health program for low-income people, than chose private insurance plans. That imbalance may disappear if the administration can persuade most of the 975,000 who haven’t chosen plans to do so.

Many of the people who applied for coverage without choosing a plan are taking their time with the decision, said Chiquita Brooks-LaSure, deputy director for policy and regulation at the Center for Consumer Information and Insurance Oversight, the office of Sebelius’s department that is responsible for implementing the health law.

“People often visit several times before making a decision,” she said on the conference call. “Our assumption is many of those people will take their time and come back when they decide which plan they want.”

Staying Optimistic

The Centers for Medicare & Medicaid Services, which runs the healthcare.gov website, began this week trying to contact about 275,000 people by e-mail who attempted to create accounts at the site in October and were stymied by technical issues. Additional people who weren’t able to complete applications on the insurance exchange will be solicited later.

WellPoint Inc., the nation’s second-biggest insurer, said the exchange’s technical flaws make it too soon to read much into yesterday’s enrollment report. The Indianapolis-based company has made perhaps the biggest commitment to Obamacare of any publicly traded insurer, selling exchange plans in all 14 states where it now operates.

“It will likely be some time before we have a complete picture of next year’s exchange volume,” Kristin Binns, a WellPoint spokeswoman, said in an e-mail. ‘We remain optimistic about the long-term membership growth opportunity.’’

Aetna Inc., which is selling exchange plans in 17 states, said its enrollment was likely lower than it would have been due to the technical issues.

Website Fixes

“Our sole focus is on helping the HHS technical team get the program fully functional,” Cynthia Michener, a spokeswoman for Hartford, Connecticut-based Aetna, said in an e-mail.

Sebelius has apologized for the botched rollout and said at least “a couple of hundred functional fixes” are being made to get the sites fully functioning by the end of November.

Illustrating the problems with the federal exchange website, healthcare.gov, just 3 percent of the people who applied for coverage through the system actually selected a plan in October. At state-run exchanges, 15 percent of those who applied in October also selected a plan.

Texas, Florida

Among states running their own websites, California led the way in October enrollment with 35,364, followed by New York state with 16,404. Peter Lee, the executive director of Covered California, said enrollment through Nov. 12 reached 59,000 and he estimates as many as 700,000 might sign up by March.

“We are very pleased with the numbers and we are very pleased with the momentum,” Lee said at a news conference in Sacramento.

California has spent $94 million to help community groups, local health clinics and labor unions sign people up for coverage, HHS said. In Kentucky, 40 percent of new enrollees were under 35 years old, a critical group that the White House said is necessary to balance costs of the sicker, older population expected to flock to the new coverage options.

Florida reported the most enrollees of any state using the federal exchange, with 3,571 individuals selecting a plan, followed by Texas, with 2,991 and Pennsylvania, with 2,207.

Hawaii, Massachusetts, Oregon and Washington, D.C. didn’t provide figures, according to yesterday’s report.

The almost 1 million people who had completed an application but hadn’t yet to select a plan represent about 15 percent of the total the administration wants to enroll by the end of next year, said Sara Collins, vice president for affordable health coverage at the Commonwealth Fund, a New York-based group that studies the U.S. health system. She said that many of those people will return to the exchange.

“You have to think about the barriers that people who are uninsured have already faced in the past,” Collins said. “I think we underestimate the value that people place on health insurance and the determination that they have to get covered.”

To contact the reporters on this story: Alex Wayne in Washington at awayne3@bloomberg.net; Alex Nussbaum in New York at anussbaum1@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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