There Are Delays, and Then There Are Delays

by Patrick Brennan

This is one of the latter: The federal government has granted Oregon permission to keep its health-insurance exchange open to all state residents, whatever their situation, until April 30. The problem-plagued exchange that’s forced their hand has cost about $300 million, and the state just announced it’ll spend another $1 million on an ad campaign to publicize this delay.

Much has been made of the formal announcement by the Obama administration last night that people trying to enroll in the federal health-care exchanges who are “in line” on March 31 — they’ve sent a paper application, or their application is pending online — which is an issue that HHS had hinted they’d be sympathetic toward at other points. In addition, there are other ways to enroll after open enrollment closes for most people on March 31 — if there were digital errors with one’s enrollment, for instance, or a navigator screwed up. 

But unless HHS broadens those definitions or creates new exemptions, even though it’s “on the honor system,” shouldn’t allow people en masse to sign up for the exchanges after March 31. Except if you live in Oregon, for now.

Cover Oregon, the state’s health-care exchange, has had massive IT problems — the state hired hundreds of people to process applications by hand because its exchange was performing so poorly. So for months it lagged enrollment in other states and the state’s own projections dramatically, but it’s not like it hasn’t enrolled anyone by now. In fact, as of the beginning of March, 38,000 Oregonians had selected marketplace plans, which is comparable to other states of its size. It’s possible the state exchange can’t complete the actual purchasing process (not necessary for HHS to count an “enrollment), but otherwise, Oregon doesn’t now look like much more of a disaster than other states that have struggled with their own exchanges or the federal exchange.

So could that leave the door open for entire states to see deadlines extended? We’ll see. But allowing an entire state to have another month of open enrollment is a serious problem: Insurers have to set their rates by the end of May, and now they won’t know, in Oregon, until the end of April who’s enrolled, let alone how healthy they are, etc. Doing state-by-state extensions rather than encouraging haphazard honors-system exceptions isolates this problem, since at least, say, Washington State will know that enrollments for this plan year are more or less still closed. But it makes the problem no less acute for the states that see extensions, and each state is its own risk pool. The stories that broke recently about insurers raising rates substantially in 2015 are partly due to these kinds of risks — widespread loosening of the enrollment deadline could produce a lot of problems.

The Agenda

NRO’s domestic-policy blog, by Reihan Salam.