This has been an obvious fallback plan since the beginning and the feds have resisted it for reasons that are equally obvious. Proposal: If Healthcare.gov won’t let people comparison-shop, why not just put up links on the site to the home pages of all the insurers who are participating in the exchange and let people comparison-shop by clicking around? Click the link to insurer A and check their price and provider networks, then hit the back button and click the link to insurer B, etc. It’ll take a lot more time than a properly functioning Healthcare.gov would, but look at it this way. If you were intent on going on vacation and Expedia and Kayak were both offline for some reason, you wouldn’t cancel your trip, would you? You’d surf over to the individual airlines’ webpages and start researching fares that way.
Two obvious problems with Plan B. One: It’s painstaking, which is yet another disincentive for “young healthies” to sign up. The point of Healthcare.gov was to make comparison shopping so fast and easy that the Internet generation could do it within 20 minutes of hearing Obama mention it on TV. If you’re now telling twentysomethings to set aside four hours to bounce from one insurance website to another in order to find the perfect plan for them, they’re either going to (a) sign up with the first or second insurance company they research, just to be done with the process, or (b) say “to hell with it” and put off signing up. Either they end up with a plan that’s sub-optimal or the industry ends up with an even bigger adverse selection problem. Or both, of course.
Two: Insurance companies can’t tell an applicant whether he/she is eligible for taxpayer subsidies or what amount those subsidies might be. That leaves the consumer shopping blind. If you sign up for a plan that costs $300 a month by guesstimating that you’ll receive $200 in subsidies and it turns out you qualify for only $50 in subsidies instead, that’s an $1,800 shortfall you need to make up. Given that uncertainty, what sort of sane, young, healthy person would roll the dice on signing up now? This is why I can’t understand why the “tech surge” team is messing around with stuff like front-end access instead of throwing everything they have at the subsidy calculator. If they could get that working, maybe they could farm the software out to individual insurers so that they can tell applicants definitively how much of their premiums will be covered by Uncle Sam.
But perhaps there’s a Plan B for that too:
On their own, insurers can help consumers through almost the entire enrollment process, but they need to rely on the federal online system for people to enter their incomes and find out whether the government will pay for part of their health plan. Since the enrollment period began Oct. 1, insurers have not had access to that feature — and, as a result, some have a lineup of potential customers unable to choose a plan and complete their purchase.
Part of the discussions lately between insurers and administration officials has been about what to do if that function is not fixed soon. One idea circulated within the insurance industry would be for HHS to approve a method to estimate subsidies and give preliminary tax credits based on those estimates — with the accurate amount determined later, once the system works better.
According to several people familiar with these conversations, insurance industry leaders have said that they would insist on a guarantee that they would be compensated for any underpayments — and that they have asked to keep any overpayments. Said one health-care consultant who is knowledgeable about insurance exchanges and who has been in touch with administration officials: “The concern is: Who bears the risk?”
They get compensated for underpayments and get to keep overpayments? Go back to the hypothetical about the $300 monthly premium; assume that the applicant will eventually discover that he’s entitled to $100 each month in subsidies, but for now he and the insurer are forced to guesstimate and they guess that he’ll be entitled to $200 each month. What happens once they discover their error? Does the applicant, who’s been inadvertently shortchanging the insurer each month, suddenly need to come up with hundreds of dollars he didn’t realize he owed, or is Uncle Sam going to apologize for the inconvenience of the process by covering that shortfall for him instead? On the flip side, imagine the same scenario except that the applicant and insurer guesstimate that he’ll be entitled to only $50 in subsidies each month. Once they discover that he’s been overpaying, it seems logical that the insurer should refund $50 per month to the applicant — but, per the WaPo quote above, they don’t want to do that. They want to keep the overpayment and have Uncle Sam refund the applicant’s money instead. One way or another, the feds end up paying more in this process than they would have if the subsidy calculator was working correctly from the beginning. Where’s the money coming from to pay for that screw-up? I realize Obama’s sense of his own unilateral executive powers is, shall we say, overly broad, but it can’t be so broad that he can appropriate extra cash for O-Care’s mess all on his own.
While you mull that, watch Todd Young deliver the GOP’s weekly address. On Friday, Rush Limbaugh warned that it’d be a “grave error” by Republicans to agree to let Obama delay the individual mandate to mitigate the website catastrophe. On Saturday, at 3:35 of this clip, Young calls for … delaying the individual mandate. It’s not just Democrats who’ll be arguing in a few weeks about how best to manage the website crisis. Although their arguments will be the most fun.