(Bloomberg) -- The Obama administration plans to push back by a month the second-year start of enrollment in its health program to give insurers more time to adjust to growing pains in the U.S. law, a move that may stave off higher premiums before the 2014 congressional elections.
The enrollment period, previously scheduled to begin Oct. 15, 2014, will now start Nov. 15, said an official with the U.S. Department of Health and Human Services who asked not to be identified because the decision isn’t public. The change is important to insurers that need more time to evaluate the first year of the government-run marketplaces.
Technical problems are undermining efforts to attract a broad array of customers to the new markets, a prerequisite to keeping plans affordable in the long run. Keeping prices from spiking next year is “absolutely critical” for President Barack Obama if he wants to preserve his signature legislative achievement, said Ana Gupte, a Leerink Swann & Co. analyst.
“The death of this law would be for health insurance companies to price policies for 2015 in a way that premiums skyrocket,” said Gupte, who is based in New York, in a telephone interview. “At that point, it’s a death spiral and it’s over. So he needs to do something.”
Moving the filing deadline back a month gives insurers more time to assess the mix of consumers who enroll in plans in the first year they’re offered through the Patient Protection and Affordable Care Act. The young, healthy people needed to balance the cost of care for older consumers aren’t likely to sign up in large numbers until March, said Jonathan Gruber, a Massachusetts Institute of Technology economist who helped design the law.
“This is an important business for them and they want to make smart decisions about how they set their rates,” Gruber said in a telephone interview. “It’s in the nation’s interest they get time to make those decisions.”
Starting enrollment after the Nov. 4 congressional elections may also be important to a president seeking to hang onto the Democrat-led Senate and maintain or gain seats in the Republican-led House of Representatives.
The decision comes as a new poll reports that Obamacare’s popularity is falling.
A Kaiser Family Foundation survey found that just 33 percent of Americans now support the health-care law, down from 38 percent a month earlier, the Menlo Park, California-based nonprofit said today. It’s the lowest support level measured by the foundation since the law’s passage in March 2010.
Also yesterday, California’s exchange reported it has now enrolled almost 80,000 people in health plans. The most populous U.S. state also revealed it was joining New York, Washington, Minnesota, Vermont, Massachusetts and Rhode Island in refusing Obama’s call to ask insurers to extend canceled plans for a year. At least 12 states have agreed to the request, according to America’s Health Insurance Plans, an industry lobby group.
The Affordable Care Act has faced dozens of attempts by Republicans to defund or repeal it, and last month’s botched rollout of the insurance exchange by the government even tested the faith of some Democrats in Congress.
The one-month delay revealed yesterday is just long enough so “consumers will not see their 2015 premiums until after the midterm elections, instead of immediately before,” said Mike Tuffin, a former insurance industry lobbyist who is now managing director of consulting firm APCO Worldwide’s Washington office. “One doesn’t have to be a conspiracy theorist to divine the motive here.”
The first-year enrollment period that began Oct. 1 runs through March 31, 2014. Insurers would have then had until May to decide if they wanted to participate in the next round and determine what rates they would charge.
A spokeswoman for the Health and Human Services Department, Joanne Peters, and a spokeswoman for the White House, Jessica Santillo, didn’t respond late yesterday to e-mailed questions about any political motive behind giving insurers an extra month.
While 106,185 people were able to select private plans through the government exchanges last month, almost 1 million more abandoned the application process before choosing a plan, in some cases because they encountered website errors and long wait times. Hundreds of thousands of Americans meanwhile have received letters from their current insurers informing them that their existing coverage is being canceled because it doesn’t comply with the new health law rules.
Pushing back the 2015 dates gives the state and federal governments more time to sort out technical issues with the exchanges, the HHS official said. It may also allow room for the government to extend the current enrollment period.
“If their implementation is not going to be improved in a meaningful way by the end of December, extending the enrollment period would be a wise decision,” Gupte said.
The online exchanges, where people can shop for private health insurance with the help of government subsidies, are the core of the Affordable Care Act’s promise of extending medical coverage to most of the nation’s 48 million uninsured.
Obama has set a Nov. 30 deadline for the site to be repaired, allowing what his administration calls “the vast majority” of customers to enroll.
Getting the federal exchange fixed soon is necessary because most Americans are required to have health insurance by March 31 or pay a fine of as much as 1 percent of their income. Almost all Americans are already covered, either through an employer or government programs like Medicare and Medicaid.
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