The Campaign Spot

Okay, Forget All the Rules for Obamacare’s First Month

From the last Morning Jolt of the week:

Obama Administration: Okay, Forget All the Rules for Obamacare’s First Month

God save us from the optimists.

Optimism probably is good for your mental health, but it seems potentially problematic in a leader. There’s nothing wrong with a bright, cheery outlook on life, but there’s a disturbing tendency in some of our leaders to believe that their plans will work out as intended, and not prepare for problems.

If you talk to any Democrat on Capitol Hill, anyone in the administration, or any fan of the president, they’ll usually express optimism that the problems with Obamacare will work themselves out, sooner or later. This is a familiar sentiment. Kathleen Sebelius told Sanjay Gupta, “I was optimistic that things would go smoothly.”

Sometimes things go wrong. The bigger and more complicated the task, the more likely it is that something will go wrong. When large government entities have to build a network of databases that connect several federal agencies, collect correct information from millions of people, share that information among their own different systems and with insurance agencies . . . things are pretty likely to go wrong. And when you’re instituting a whole package of changes that impact every American, the problems can start piling up like a . . . well, train wreck. And sometimes you run into the worst-case scenario.

Washington is full of people who don’t want to contemplate the worst-case scenario, and deny the possibility of the worst-case scenario, even as it unfolds before their eyes.

You’ve been reading me, and the explanations from Avik Roy, Bruce Webster, Bob Laszewski, Megan McArdle — antidotes to the happy talk.

Another must-read guy on the health-care-reform beat, Phil Klein, points out that HHS is asking insurance companies to ignore at least three major rules on the books, at least for Obamacare’s first month:

It is requiring insurers to accept payments until Dec. 31 for coverage starting on Jan. 1. It is also “urging” insurers to give individuals more time beyond that to pay for coverage. In other words, if somebody pays for coverage in the middle of January, HHS is asking insurers to retroactively make that person’s coverage effective as of Jan. 1. HHS is also asking insurers to cover individuals who offer a “down payment,” even if that payment only covers part of the first month’s premiums.

In a press release, HHS said it was also “strongly encouraging insurers to treat out-of-network providers as in-network to ensure continuity of care for acute episodes or if the provider was listed in their plan’s provider directory as of the date of an enrollee’s enrollment.”

HHS is also “strongly encouraging insurers to refill prescriptions covered under previous plans during January.”

Of course, for insurers who have spent years designing plans to comply with the law, this would present huge and unreasonable logistical hurdles.

But wait, there’s more:

HHS is also allowing a “special enrollment period” that will give people who had problems with the federal and state-run Obamacare exchanges more time than they would have had to sign up and get coverage quickly.

Those problems could include so-called 834 file errors, which impact the electronic transmission of enrollment forms to insurers from the exchanges — errors that could lead to delays in formal enrollments. Up to one in four of the 365,000 enrollments as of Nov. 30 had such errors, and the error rate still may be as high as one in 10 this month.


The next big risk ahead for the Affordable Care Act: if people who believe they’ve enrolled in insurance can’t get care when they start showing up to clinics and hospitals in January.

That’s what happened to Medicare patients in 2006, when a new drug benefit took effect. As the New York Times reported at the time:

People who had signed up for coverage found that they were not on the government’s list of subscribers. Insurers said they had no way to identify poor people entitled to extra help with their drug costs. Pharmacists spent hours on the telephone trying to reach insurance companies that administer the drug benefit under contract to Medicare.

Given the depth of the technical failures that plagued and some state marketplaces, the risk of the same thing happening to Obamacare enrollees next month is real. In cases where the government website sent bad or incomplete information about applicants to insurers, government workers are correcting the records by hand, Health and Human Services Secretary Kathleen Sebelius testified Wednesday.

“The risk is real.” Thanks, Carnac. I suppose I shouldn’t complain too much; Robert Laszewski, who knows about as much about this stuff as anybody, thinks no one actually knows how many people will find themselves without coverage starting in January:

There have been reports of enrolling exchange eligible people in Medicaid instead of the private plan they want (Federal Exchange Sends Unqualified People to Medicaid). No one seems to know how big a problem this is.

How many people’s enrollments –– Medicaid and private plans –– have been jeopardized by these backroom issues? Until the federal government can do a timely and efficient reconciliation of those who have applied compared to those whose coverage has actually been established by the health plans and state Medicaid programs, there is no way to know.

But hey — I’m sure Sebelius is optimistic.


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