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Obamacare’s dilemma, simplified

The website is not going to be fixed by the end of the month.

As a result, most people will NOT be able to enroll in commercial plans that start January 1.

Many of those who are already insured got cancellation notices, so their policies will not exist after January 1.  And it will be very, very difficult for insurance companies to postpone or “cancel” those cancellations. Not because they don’t want to but because they can’t.

Insurance companies have spent years preparing for January 1; programming computers, developing policy language and getting it approved by regulators, setting up new provider networks, cutting deals with providers; setting up EDI links with the government and banks, and building new reimbursement and clinical management programs. All are ready to go, tested, checked, and waiting for the ball to drop.

They can’t just undo this; they can’t call “Time Out” or hold off, or stop.  The train is leaving the station, and there’s nothing the President or anyone else can do to stop it.

Which puts the Administration in a very poor position, albeit one they built themselves.  The website won’t be ready, and the current policies won’t be in force as of January 1.

Is there a solution?

Not that I see.

What does this mean for you?

Depends on your state.  I’ll address the impact on workers’ comp in a future post.

5 thoughts on “Obamacare’s dilemma, simplified”

  1. Wow! Leaving politics aside, this seems like a failure of epic proportions. This legislation was the main focus of this Administration, and they messed it up badly. If this was a public corporation, the C-suite would be fired immediately.

    I wonder if there will be legal action against those that were paid billions to develop the web site.

    I’m really worried about the impact this will have on the average American. When your health insurance premium increase is significantly higher than your raise, people are going to have to make hard choices. Are we going to end up with more people without coverage than we started with? What impact will this have on the economy.

    It’s hard to imagine that this is actually turning out worse than the gloom and doom forcasts from opponents of the bill. I don’t think anyone expected it to fail out the gate.

    1. Right on point Mark. My sense is there will be cost shifting to comp if people find themselves without coverage.

  2. From someone who was not certain what to expect, but was optimistic that the PPACA would at least nudge the ailing health care system toward sustainability, I am now terrified about the consequences of this colossal flub by the Obama administration. You’re right Mark, the C-suite would be fired in this case – and deservedly so. The only problem is that nobody knows where the bottom of the rabbit hole is or how dramatic the fall out is going to be if the PPACA doesn’t function as it should. This observation of course sets aside the gloom and doom of even the most conservative punditry. We may not know the full consequence for many years. Obama had better brace himself (as should we all). The worst is yet to come…..

  3. Here are two other interesting issues. In California, the Exchange required any insurer wanting to offer a plan on the public exchange to drop any individual plan that might be similar in nature. Meanwhile, California’s insurance commissioner has recently required two of those insurers to postpone cancellations for a month or two. So those insurers have been forced to violate the policy of the Exchange.
    The other interesting problem is that even if the cancelled policies could be resurrected – by definition those who might have qualified for a subsidy if buying a public exchange plan cannot qualify for the subsidy if they remain on the private plan that was cancelled but then reinstated.
    Finally, since the current system set up requires one to go through the federal data hub if to determine eligibility for Medicaid – but if not functional, that cannot be done.
    There are many other issues that become nearly impossible to unravel.
    This is one of those cases where the saying “You can’t unring a bell” applies.

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Joe Paduda is the principal of Health Strategy Associates



A national consulting firm specializing in managed care for workers’ compensation, group health and auto, and health care cost containment. We serve insurers, employers and health care providers.



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