The second year of Obamacare enrollment just ended. Or did it?
The Department of Health and Human Services has hinted it might reopen enrollment on the Affordable Care Act’s health insurance exchanges in 37 states around the tax filing deadline April 15, with the aim of enrolling people who learn for the first time they owe a fine under the law’s individual mandate to have health coverage. Already, Minnesota, Vermont and Washington have done so, and states including California may do the same.
Since Obamacare’s exchange marketplaces first opened in October 2013, federal and state authorities have simultaneously emphasized the importance of the deadlines to sign up for coverage and then fudged them to accommodate their own errors and a public that remains uninformed about the 5-year-old health care law’s requirements and benefits.
“We’ve got millions of people who are still qualified who have a chance to sign up, but you’ve got to do it by Feb. 15,” Obama said at the White House earlier this month.
Maybe not, it turns out just a few days after that supposed deadline.
Health and Human Services Secretary Sylvia Mathews Burwell will announce plans for the federal health insurance exchanges using HealthCare.gov within two weeks, she said at a press conference Wednesday. “What we try and do -- as we have throughout this open enrollment -- is focus deeply on the issue of the consumer,” she said. A group of congressional Democrats has urged the administration to permit more people to sign up, as have tax-preparation companies and groups that support Obamacare.
Allowing more people to enroll in health insurance has obvious benefits for the Obama administration and states like Vermont that operate their own exchanges. It would also help at least some of the consumers who might sign up. More uninsured people would gain coverage, fewer people would owe tax penalties next year and the backlash about the fine would be mitigated.
“It would be awful for a Vermont family to have to pay a fee of several hundred dollars or more, and then have to pay 100 percent of their medical care on top of that, just because they didn’t know the penalty existed,” Lawrence Miller, chief of health care reform for Gov. Peter Shumlin (D), said in a press release Thursday.
But the approach also carries risks.
Reopening enrollment after hyping the previous deadlines could contribute to confusion about when people are supposed to act in future years. It could also lead consumers to conclude upcoming deadlines aren’t real, especially considering the many other parts of the Affordable Care Act that have been delayed or even canceled since the law passed in 2010. And there’s a small chance it could encourage people to postpone getting coverage until they have medical needs, which would increase costs.
If a special enrollment period is going to succeed without causing problems for consumers and insurers this year, authorities will have to communicate that it’s a unique event for a specific population, said Clare Krusing, a spokeswoman for the trade group America’s Health Insurance Plans.
“Special enrollment periods need to be clearly defined in terms of who qualifies and the start and end date to make sure that consumers understand and health plans can help those folks navigate that process,” Krusing said.
One reason a special enrollment period may be deemed necessary is that outreach campaigns have downplayed the mandate and the penalty. The individual mandate is the least popular part of an unpopular law, and enrollment efforts instead have focused on positive messages, like the availability of subsidies and access to coverage for people with pre-existing conditions.
"There's been such a reluctance to talk about the mandate, and so, shockingly, people don't realize that they have to buy coverage," said Caroline Pearson, who leads the health reform practice at Avalere Health, a consulting firm.
The Treasury Department estimates as many as 6 million people will owe the penalty for not having health coverage last year, despite a slew of exemptions from the mandate. Signing up for coverage during one of these special enrollment periods wouldn’t eliminate the penalty for last year, and taxpayers who sign up for insurance would still owe a partial penalty for this year because the law allows only a three-month grace period.
This tax season is the first time Americans have to factor health insurance into their returns. The Obamacare mandate fine starts at $95 per person, but will be based on a percentage of income -- and thus be higher -- for most households subject to it for the 2014 tax year. And it gets a lot bigger for 2015: at least $325 or a percentage of income. The minimum fine goes up to $695 for 2016.
“There still remain millions upon millions of people who are unaware about these penalties,” said Ron Pollack, executive director of Families USA, a consumer advocacy organization supportive of the Affordable Care Act. “And there are still millions of people who are not even aware of the subsidies they may be eligible for,” he said during a conference call with reporters Wednesday.
Obamacare uses fixed time periods for enrollment to dissuade consumers from putting off getting coverage until they get sick and need costly medical care. That’s the same way most employers handle job-based health benefits, and how Medicare handles sign-ups for prescription drug and Medicare Advantage insurance plans.
“It really goes to the core reason that the Affordable Care Act has an open enrollment period instead of enrollment periods throughout the year,” Peter Lee, executive director of Covered California, that state’s exchange, said on the Families USA call. “The right question is, does having a special period for one time cause injury to that and affect the risk pool?”
So far, the dates for regular enrollment have varied every year: Oct. 1, 2013, to March 31, 2014, for last year; Nov. 15, 2014, to Feb. 15 for this year; and tentatively Oct. 1, 2015, to Dec. 15, 2015, for next year. And that doesn’t count prior deadline extensions, or the practice of allowing people who didn’t complete their applications on time to finish them after deadlines passed, which has been happening since Sunday.
Since all of this is so new, now may be a good time to be flexible, but the exchanges must have deadlines that matter at some point, said Sydney Smith Zvara, executive director of the Association of Washington Healthcare Plans in the Evergreen State. “Down the line, some people could end up after it’s tightened up being disappointed that they are held to a deadline, because it looked like they were so elastic,” she said.
Overall, the health insurance industry doesn’t appear concerned so far.
Blue Cross and Blue Shield of Vermont and MVP Health Care each endorsed Vermont’s decision, according a press release from the exchange. Insurers in Minnesota also aren’t worried about the special enrollment period disrupting their operations, Jim Schowalter, president and CEO of the Minnesota Council of Health Plans, wrote in an email. Washington state insurers support getting more people covered, but some companies are wary of creating incentives for people to postpone buying insurance, Zvara said.
Minnesota's MNSure is permitting new enrollments only for people who owe a fine from March 1 to April 30, Vermont Health Connect is available starting Thursday until May 31 for those subject to the penalty, and Washington Healthplanfinder reopened sign-ups for this group this Tuesday through April 17. “This is just a one-time opportunity. It’s not going to be throughout the year. It’s very defined,” Richard Onizuka, the CEO of Washington state’s exchange, said on the Families USA call.
California will reveal its decision early next week, and the exchanges in Connecticut, Hawaii, Idaho, Kentucky and New York are weighing more enrollment this year, officials from those states said. By contrast, states including Colorado and Maryland currently are not eying reopening their exchanges, representatives told The Huffington Post. Early moves by Minnesota, Vermont and Washington states could put pressure on authorities elsewhere to follow suit.
Allowing uninsured people who owe the mandate fine to sign up late actually could benefit insurers, Pearson of Avalere Health said. Individuals who remain without health coverage may be healthier than those already enrolled, because sick people are more driven to get insurance, she said.
“It’s mostly upside. I think you have the potential to actually get a reasonable enrollment bump, and I don’t think there’s really significant risk,” Pearson said. “As long as it stays limited.”