Delaying Affordable Care Act not as simple as it sounds

healthcaregovWith all the website woes, you are going to hear a lot more about “delaying” the Affordable Care Act.

But what “delay” means is in the eye of the beholder – or maybe in the political affiliation of the beholder. It’s helpful to think about “delaying” the whole law or the mandate (mostly but not only a Republican idea) versus “extending” the enrollment period – but keeping the mandate in force for 2014, although it could be even weaker than it already is for the first year. That’s an idea that we’re beginning to hear from more Democrats – including several senators up for re-election in red states in 2014.

First a quick review of the dates:

  • Oct. 1- March 31: Open enrollment season. This is when consumers can sign up for health insurance in the government marketplaces, assuming the website functions and people can sign up.
  • Dec. 15: This is the last day consumers can sign up if they want insurance coverage on Jan. 1. There is potentially a little wiggle room here; insurers need time to process the applications, etc., but it could get modified. Basically, they want to avoid what happened with Medicare prescription drugs in 2005-06 – people signed up on Dec. 30 or 31 and then went to the drugstore on Jan. 1 and wanted to know why they didn’t have their drug benefit ready.
  • Jan. 1: The first day of new ACA benefits.
  • Feb. 15: THIS IS BEING CHANGED VERY SOON, the administration says. Right now, it’s the deadline to sign up for insurance and avoiding the individual mandate for the first year. But critics pointed out that the deadline should really be March 31 – the end of the sign-up period – and the administration has said it will “align” the dates.
    UPDATE: According to The Associated Press, “the Obama administration Monday granted a six-week extension until March 31 for Americans to sign up for coverage next year and avoid new tax penalties under the president’s health care overhaul law.” People will now avoid a penalty as long as they sign up during the open enrollment period, which ends March 31.
  • March 31: The last day to sign up for 2014.

Delaying the whole law would mean people wouldn’t get benefits this year – and would have huge ripple effects for insurers and the rest of the health sector.

Delaying the mandate for a year would mean that it is more likely that older, sicker people will sign up – and younger, healthier ones won’t. That’s the whole “death spiral” argument that you’ve heard before: Costs will go up and the whole exchange market becomes precarious.

There are political and pragmatic policy reasons for not pushing the date back. Insurers have to have some hard data and experience with the risk pool – WHO they are going to be covering and how much will they cost – before submitting their premiums for 2015. That process starts in April.

The White House needs people to start signing up so they can feed a political narrative – they have to start showing people who benefit from the law to counter all the negative stories about people whose insurance costs are rising (some of whom might do better in the exchanges – if they can get into the site to find out).

On the other hand – if the websites in the states (where they are mixed) and the federal don’t start getting better soon – the calls to extend or delay will keep rising.

Here are a couple of stories that explain the difficulties of delaying:


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