The Obama administration has 18 days to deliver on its promise to fix healthcare.gov by the end of November, in time for people to shop for health plans that take effect on Jan. 1. What if the site remains broken?
Some Democrats want to extend the open-enrollment period past March 31 and delay the penalties Americans will face—$95 or 1 percent of income—for going uninsured in 2014. Their reasoning is pretty straightforward: If the balky website hinders people who want to get covered, it’s not fair to penalize them.
Don’t count on a delay. The White House doesn’t want to hand opponents a political victory, and delaying the mandate would do that. Here’s a bigger reason it’s unlikely: math. Insurers set rates for 2014, expecting the mandate to be in force. Delaying the penalties for a year removes an incentive for healthy people to buy coverage.
That prospect rightly spooks insurers. The law still requires insurance companies to sell policies to anyone without charging them more for being sick, or turning away costly patients. We know from experience at the state level that barring insurers from medical underwriting, as the practice is known, without requiring people to buy coverage (PDF) sends premiums for private health plans sky-high. This is what happened in New York State before the Affordable Care Act, where premiums were the highest in the nation.
If delaying the mandate is off the table, what are the options? The idea emerging this week is to bypass healthcare.gov entirely. After all, insurers already know how to enroll people. Healthcare.gov and the state exchanges are meant to serve two main functions: 1) Allow consumers to compare plans in one place, and 2) calculate subsidies for those with modest incomes and get those subsidy payments to insurance carriers. A workaround would require the government and the insurance companies to get subsidies to people who qualify for them.
That’s fraught with challenges, too. Online insurance marketplace eHealth (PDF) last month offered to act as a stop-gap until the government gets healthcare.gov running. Over the summer, the government approved eHealth and other online brokers to sell insurance plans to people eligible for subsidies. The company is still working on meshing its system with the federal government’s, according to spokesman Brian Mast. That means it can’t yet verify what subsidies people are eligible for.
Bypassing healthcare.gov might be technically difficult, and it would be an admission of defeat on President Obama’s signature policy. But if the other choices are extending healthcare.gov repairs into December or delaying the individual mandate, finding a workaround might be the administration’s least-bad option.