Laszewski: Is Obamacare Unraveling?

Health insurance industry insider Bob Laszewski asks today whether Obamacare is beginning to unravel. His question is prompted by word yesterday that the Obama administration is considering a 1-3 year extension of rules which allow people to keep their “old” plans rather than buy a new one on the exchange.

Yesterday we learned the administration was considering extending their one year grace period for insurance plans as a way to increase rate stability. What this suggested is that the administration is very concerned about the possibility the rate increase announce this May will be bad news.

Laszewski argues the administration’s desire to constantly put off bad news means the policy is unraveling piecemeal.

This might be one of those you can’t win for los’en moments for the
administration. Stay on the cancellation track and make lots of people
mad one more time on election-day or grant another three-year reprieve
and make the people you forced to buy the new plan wonder why they can’t
have the policy their neighbor across the street has.

When the President last October called on health plans and insurance
commissioners to defer the cancellations for one more year, was it the
beginning of the unraveling of all of the stringent individual health
insurance market requirements in Obamacare? Would this new change to
defer these cancellations for another three years just be step number
two in that process?

Remember, back when this change was announced, Ezra Klein called it the “first crack in the individual mandate.” He also said that if it led to a further delays it would be “a very big problem for the law.” Lazewski actually disagrees that the policy is in danger. Thanks to risk corridors and reinsurance, the policy will continue one way or another, at least until Obama leaves office. The real problem is political. It’s possible the President will decide to leave the uproar associated with implementing his own health care mandate to his successor rather than add it to his own troubles.

Speaking of troubles, there is more news in Laszewski’s post. He says the final percentage of people who will see their plans cancelled for non-payment is going to be close to 20 percent. There have been suggestions this was the case but now the books are closed. That means (as I said here) many more people are going to be dropped from the official HHS count than enrolled in October and November combined. We heard a lot about the “November surge” a few months ago, but relatively little about the void rate which turns out to be much larger.

This adjustment to the enrollment numbers means that the current total is closer to 2.5 million. Instead of being 1.1 million behind projections, HHS is closer to 1.7 million behind. It’s going to take a huge surge in March to get to the revised (lowered) CBO estimate of 6 million overall.

But don’t expect to see HHS update the numbers to reflect reality any time soon. Why? Because the portion of the website which allows HHS to delete someone has not been built. That should give the administration all the excuse it needs to keep putting out inflated paid plan enrollment numbers to match their inflated Medicaid enrollment numbers.