The first days of the Affordable Care Act’s health exchanges were rocky but not disastrous. The success of Obamacare won’t be determined in week one. It will be years before we know whether the law can achieve its long-term goal of getting more Americans insured while slowing the growth of medical costs. Here’s what to watch in a month, six months, a year, and beyond to gauge whether the nation’s experiment in health reform is working.
One month from now: How difficult is it to enroll?
The exchange websites on Day One were glitchy and unequipped to handle the number of people who showed up to shop. Opening week exposed such unexpected problems as how people who lack e-mail accounts must struggle to buy insurance online. The White House compared the exchanges to a new tech product that will be improved over time and pleaded for the lenience consumers grant Apple (AAPL) on a buggy software update. But if healthcare.gov and the state-run insurance portals aren’t working more smoothly by November, it’s a signal that the software problems are deeper than routine bugs or servers swamped by launch day traffic.
Six months from now: Who signed up?
The exchanges’ first open-enrollment period lasts through the end of March. About 7 million people are expected to sign up for health plans by then, according to Congressional Budget Office estimates. The White House has indicated that about 2.7 million of them need to be younger, healthy people. These are likely to see premiums rise under the ACA because the law restricts how much the insurance companies can vary premiums by age. Opponents of Obamacare such as Generation Opportunity are warning young people to stay away, while boosters like the Young Invincibles are urging them to sign up for care. Six months from now, exchanges should know how many signed up—and whether enough healthy people are paying into the system to cover the costs of the sick.
One year from now: How much are they paying?
The whole point of exchanges is to use competition to drive down premiums by letting people compare similar plans, side by side. But premiums could rise if insurers lowballed prices in the first year or incorrectly predicted the mix of healthy and sick people who would sign up. Higher premiums would keep healthy people away, potentially creating a death spiral of ever-rising premiums to insure an ever-sicker group of consumers. Also watch for how many insurance companies begin offering plans in 2014. Some of the largest, like UnitedHealth (UNH), are mostly staying on the sidelines right now. If they decide to offer exchange plans next year, the competition will put further downward pressure on prices.
The years ahead: Is what we spend on health care slowing down?
Eighteen cents of every dollar spent in America goes to health care, more than in other rich nations, and Americans aren’t any healthier for it. Obamacare has dozens of mechanisms aimed at improving people’s health while slowing the growth of medical spending. They include subsidies to help people buy insurance, penalties if they don’t, and payments that reward doctors and hospitals for better results, not more procedures. We don’t know how they’ll all work together. The growth of health-care spending has moderated since 2009, though the weak U.S. economy accounts for much of the slowdown. For the health reform experiment to work, Americans need to get more for those 18¢.