To kick off 2014, Kathleen Sebelius is reportedly papering the country with op-eds about the wonders of the “Affordable” Care Act. But her PR campaign aside, things will continue to deteriorate for Obamacare in 2014. Here are ten ways it’ll happen:
1. Many won’t pay: A sizeable share of the 2 million people who selected a private insurance plan before the 2013 deadline will not pay their share of the premiums and therefore won’t be covered by the plans in which the White House says they “enrolled.” Enrolling, by the White House definition, is actually just selecting a plan — the same as putting an item in the shopping basket at Amazon. Until you pay, you don’t own it. Early reports from Washington State and Nevada show that only half of those selecting a plan had paid their first month’s premium before the deadline.
2. Others will stop paying: Even if people do pay their premiums for the first few months, we’ll wait to see how many people are still paying them later in the year and maintaining their insurance. Remember, the law requires people to pay premiums for health insurance every month, year after year, to comply with the mandate; if they go more than three months in a year without government-approved health insurance, they have to pay a penalty tax.
4. Another broken promise: Many members of Congress who voted for Obamacare did so because they wanted “universal coverage.” But we may end up further from that goal: If the numbers show that millions of those buying insurance on the exchanges had insurance before but lost it because it didn’t comply with Obamacare’s rules, we may wind up with fewer people with private insurance than before the $2.6 trillion law passed! That would be another betrayal of trust with the American people, who genuinely wanted to help expand access to health insurance.
5. Many uninsured won’t enroll: People will find that Obamacare’s high-deductible insurance policies just aren’t worth the exorbitant premiums — even after subsidies — and won’t buy. Faced with paying premiums of $3,000 or more a year and carrying a $4,000 annual deductible, millions just won’t see the value in buying the coverage.
6. Sicker and older enrollees will outweigh younger healthies: The Obama administration hasn’t released a demographic breakdown of exchange enrollees so far. But many of us — and many in the Obama administration — fear that those most likely to enroll are older, sicker, and more expensive patients, not — despite Pajama Boy’s hot-chocolate plea — the younger, healthier people needed to offset their elders’ premiums. This will mean premiums or deductibles will have to be even higher in 2015.
7. Tens of millions will see employer plans canceled: The next wave of lost coverage will be among those receiving health insurance through small businesses. Most do not self-insure (the way big companies do), and the health-insurance policies that businesses renewed in 2013 under the old rules will expire in waves throughout 2014 because they don’t meet the law’s new mandates. Expect to see many more news articles reporting on the next cascade of lost policies.
8. Most of the newly insured will be on Medicaid: The more heavily subsidized insurance is, the more likely people are to enroll. Medicaid is free to patients, or nearly so, so it’s likely to see the greatest enrollment. In Kentucky, for example, 85 percent of those enrolling so far are on Medicaid or the Children’s Health Insurance Program.
9. Fewer insurance companies will participate in 2015: Many insurance companies took a “watch and wait” attitude to participating in the Obamacare exchanges in the first year. Those that did participate have invested hundreds of millions of dollars to structure plans that comply with the law. But as the rules change, sometimes daily, these companies have been sent into a frenzy to comply with the new directives. Those who bought in and those who didn’t will look carefully at whether or not they will participate in 2015. If they don’t, people will have even fewer choices of plans, and premiums will be even higher next year.
10. Court cases will continue: Legal challenges will continue to march through the courts, and at least some are likely to succeed. Private companies and religiously affiliated charities face ruinous fines if they fail to comply with the mandate that they provide free coverage for their employees for contraceptives, sterilization, and abortifacient drugs, despite their strong religious objections. Lower courts have granted preliminary injunctions in 18 of the 20 cases they’ve heard so far.
A number of other suits are challenging the IRS rule that authorizes subsidies for health insurance in the federal exchanges — which the law clearly doesn’t provide for – and decisions are expected early this year on that matter in federal district courts. And eleven state attorneys general are challenging the Obama administration’s decision to simply stop enforcing the Affordable Care Act’s mandates, including the latest directive to allow insurance companies to keep offering health plans that had been canceled. While the attorneys general support continued coverage, the way the president did it is “flatly illegal under federal constitutional and statutory law,” they claim; lawsuits are likely.
All of these predictions should make another fair bet: Before the 2014 elections, Congress will send legislation to the president to soften the blow of Obamacare, most likely delaying the individual mandate by at least a year. If that happens, the center pole in the Obamacare tent comes down, and the door will open wide for major, structural changes to the law in 2015.
— Grace Marie Turner is the president of the Galen Institute.