As usual, it’s hard to tell just what’s going on inside the administration regarding Obamacare, but I don’t think we can really take the steps announced by HHS yesterday as anything but a bright, red, flashing warning light about the internal expectations regarding January.
Some of what they announced is frankly bizarre and slightly crazy. Beside extending the high-risk pool program (which isn’t nuts, just a strong indication that they’re not ready for January at this very late stage), they are asking insurers to pay claims for consumers who haven’t paid their premiums, to treat out-of-network doctors and hospitals as though they were in-network, and to pay for prescription drugs not actually covered by the plans they offer.
The administration is trying to present this as a set of perfectly ordinary kind of transition measures that insurers normally make available to new customers, and some of the more reliable members of their amen chorus on Obamacare have echoed that. But that’s not what this looks like to me, and a few conversations today suggest it’s not what it looks like to the insurers.
To “strongly encourage” insurers to take these kinds of steps (to use the Orwellian phrase of the HHS announcement), and to do it just a couple of weeks before the new system is supposed to start, suggests that the administration’s health experts mapped out how January is shaping up and had a collective heart attack. They seem especially worried about people forced out of old coverage and into new encountering horrible surprises and about the extremely low payment rate so far among people who have chosen new insurance plans on the exchanges. About two weeks before the deadline (after which, if they have not paid their first premium, people’s coverage will be voided) it looks like only about a fifth of the people who have signed up for exchange coverage have paid their first premium. If far more don’t do so soon, the (already very low) enrollment numbers the administration is looking at will fall far, far lower. And the Christmas season (with many distractions, and an overstressed postal system) isn’t a great time to squeeze all those invoices and checks into.
What the insurers are being asked to do here as a response, while not necessarily impossible as a practical matter, is very unusual, and it highlights a couple of things about the administration’s reactions to Obamacare problems. First, it’s another instance of pushing problems just a little bit further into the future. The administration has done this again and again: A lot of the steps they’ve taken as the rollout has floundered have evinced the hope that things will turn around very soon. This is the administrative version of the Democrats’ political strategy since Obamacare was first passed, which has also been built on the hope that public opinion was about to turn around any minute, and they just need a little bit of time. With this latest step, they’re pushing what appear to be huge problems off by a couple of weeks (in some cases days), and it’s not clear why they think things will be very different at that point.
The move also puts HHS in the position of playing the role central manager of the American health-care system—telling private insurers to do various things that have nothing in particular to do with the law, as though they work for the government. It is an eerie prefiguration of where the administration would like to get with this system, but it’s also surely something they didn’t want to be doing so publicly at this stage.
It’s all in the context of what is an incredibly precarious situation for the system created by Obamacare. The rollout numbers released a few days ago and the reports of December numbers so far all point to an under-populated exchange system at enormous danger of falling into a disastrous imbalance of risk. It especially now looks like different states are going to end up in different situations—with some perhaps muddling through and others almost certainly unable to sustain their exchange systems into 2015 as things look now—and there seems to be no provision or plan for dealing with such an outcome. States would have no way to fix their own problems, and a national response to vastly different sorts and degrees of problems in different states is not easy to envision in a system like this one. Obamacare’s rollout has so far gone significantly worse in every state than any official projections made before October envisioned, but far worse in some places than others.
The steps announced yesterday aren’t directed at that forthcoming problem, but, as usual, at far more immediate concerns. My guess, and it is just that, is that the administration has taken these steps because their internal projections at this point suggest some kind of disastrous replay of the politics of October and November in January, and this time they are intent on getting people to blame the insurers instead of the administration. I think that’s very unlikely to work, but it’s not hard to see why they would be desperate to try.
But who knows? The administration is being secretive as ever about the information that is driving its decisions, and we are left to read vague tea leaves.