Taking on Water

We're taking on water. Those of us on the blue, Obama team have to be honest. We're in a rough patch.The website mess is an unforced error, a self-inflicted wound. The "You can keep your health plan." promise was a mistake, as Robert Gibbs admitted today. We will recover, for sure, but November could be tough. If the website fix is successful, and the policy cancellations run their course by the end of the month, we should start moving positive by mid-December.

Before then, we have to absorb all the upset and pain experienced by people in the individual market whose policies get canceled. There are 12-15 million people in the individual market; half to three-quarters of these will have their old plans cancelled. Since the cancelled plans are "non-conforming (with ACA)", i.e., bare bones plans, almost all of these people will have to pay more. Probably half of them, or more, will be eligible for subsidies, but they need a working web site to figure that out. I assume this will happen in December (a working web site), thus diminishing the cries of pain.

But many will pay more, even with subsidies. As Jonathan Cohn shows in a wonderful article this morning, some of the victims of this "October surprise" will end up liking the change, after it is fully explained, because they will end up with real insurance as opposed to "fake" insurance. But a sizeable number will not like being told they have to pay more, and that they must carry more insurance than they think they need (Pregnancy coverage for single males; mental health coverage of people convinced they will never need such a thing, etc.). And thus the "middle-class eroding, liberty destroying" Obamacare meme will live on, in all its gory glory.

But this, too, shall pass. The cancellations should end by very early December. The cries of anguish will be heard, absorbed, and then they will diminish, falling to near zero by year end. And that's when the Blue Team will make its run for the Gold - from mid-December thru March 31, as the web site becomes fully functional, and people get serious about their insurance purchase decisions.

Will we hit the 7 million target Exchange enrollment number by March 31? I'm not sure. It's possible, but a long way from certain. We will actually be helped by the folks receiving cancellation notices (6-7.5 million), who are not rolled over into a new policy by their insurance company, and have to use the Exchanges. How many? My guess: 3-5 million. If half of these people (who have gotten used to having coverage) decide to buy on the Exchanges, this is 1.5-2.5 million people that may not have been actively considered as part of the original 7 million target, which I believe was taken completely from the uninsured. And a good number of these people are under 35, which will help us make the key goal of about 40% of signups being under 35 (2.7 out of 7 million is 38.6%).

We don't have to hit 7 million by March 31. But we need to hit near the 40% under 35 target to ensure our insurance pool is balanced. We'll know all of this by the end of March, with pretty fair predictions much sooner, say by early February.

Plenty of time for Team Blue to take it to the GOP in the November mid-terms!