Friday, October 25, 2013

ACA Update

Above is a picture of Jeffrey Zients, Acting Director of the Office of Management and Budget (OMB), who has been assigned by President Obama to fix the ACA website mess. Today he held a conference call with reporters and gave (according to numerous sources) a clear, detailed summary of what has gone wrong. He has appointed software developer QSSI, architect of the ACA federal data hub (up and running well), to be the General Project Contractor (as opposed to HHS playing that role, as they have up until now). Zients said the site will be up and running effectively by the end of November.

I'm inclined to believe him. He's been a successful problem-solver for the President: The Washington Post called him President Obama's "weed-wacker". Meanwhile, GOP pundits are announcing ruin. Here's Peggy Noonan at the WSJ:

We should not lose The Headline in the day-to-day headlines. This is big history, not small. The ObamaCare rollout is a disaster for the White House, not a problem or a challenge or an embarrassment, not a gaffe or a bad few weeks. It is a political disaster...

Here's Kim Strassel, also of the WSJ:

After 16 long days of vowing to Republicans that they would not cave in any way, shape or form on ObamaCare, Democrats spent their first post-shutdown week caving in every way, shape and form. With the GOP's antics now over, the only story now is the unrivaled disaster that is the president's health-care law.

The picture is not pretty right now, and it's going to get worse before it turns the corner. Many, most likely millions of people who have carried bare bones policies on the individual market, are going to get their policy cancellation notices and told that their policies are not ACA compliant. About 14 million people buy individual insurance and probably half of these folks have minimal coverage policies that have been adjusted in the last 3 years (since ACA was passed) and therefore are not "grandfathered". This is where premium "sticker shock" will be real, especially for single people earning over $30,000, and therefore not entitled to significant subsidies.

Sticker shock is one thing. But what happens if there is no way for them to sign up by December 15, for coverage beginning January 1, and avoid a gap in coverage? A very real problem that we will hear much alrarum about in coming days. My conclusion: there will be a fix, if needed, probably by HHS extending the date out 3-6 months for when all policies must be compliant; then insurance companies can issue policy extension riders to their customers. But it will get very noisy.

Will Democrats abandon the ACA ship and team up with the GOP to delay the individual mandate? No. They will (and already are) asking for an extension of the open enrollment period beyond March 31, 2014. They may even ask for a reduction (even elimination) of the Year 1 penalty (currently $95), but they will not ask for a delay in the mandate itself.

These may be good weeks coming up for the GOP. The Obamacare House may be appearing to break apart. Just hang tight. This will pass. Obamacare will make it through this part of the storm.

The only real and substantive question is: When will we know if the under 35s' are signing up? This is the core of the Conservative argument against Obamacare's economic structure. I have argued the "young" will sign up. Conservatives are ferocious in their disagreement. I think we will start getting numbers soon. For a really clear picture, we might have to wait until Christmas.

But remember: the under 35s' signed up in Massachusetts, albeit not quickly, and the penalties were modest, similar to what has been laid out in the ACA.

As ever, count me an optimist.

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