10 Updates
Health Care's March Madness: Buzzer Sounds On Exchanges Deadline
Photo Credit: Forbes Business

Health Care's March Madness: Buzzer Sounds On Exchanges Deadline

Apr 3 2014, 12:51pm CDT | by

The fourth anniversary of the signing of the Affordable Care Act (ACA) passed on March 23 without much notice or fanfare. Instead, all eyes were on March 31, the final deadline for buying health...

Filed under: news


15 weeks ago

Health Care's March Madness: Buzzer Sounds On Exchanges Deadline

Apr 3 2014, 12:51pm CDT | by

The fourth anniversary of the signing of the Affordable Care Act (ACA) passed on March 23 without much notice or fanfare.

Instead, all eyes were on March 31, the final deadline for buying health insurance through state and federal health care exchanges – and the day that fines for non-participation kicked in.

Supporters and opponents of the ACA are on the edge of their seats, anxious to know the outcome: Exactly how many people signed up, will they pay their premiums and for how long will they do so?

Unlike March Madness, we won’t know how this dance ends for months to come. But like the NCAA tournament, the ACA has already had its share of victories and major upsets.

The Victories/>

As a result of health care reform, the number of uninsured or under-insured Americans will be lower in 2014 than in the recent past.

By April 1, the White House estimated it was on track to reach 7 million enrollees through the state and federal exchanges. An estimated 9 million more enrolled in Medicaid.

The majority of the newly enrolled will receive subsidies to help pay for coverage. Their coverage will include free preventive screenings, which should improve their overall well-being and contribute to lower health care costs in the future.

In addition, health care reform allowed more than 3 million otherwise uninsured young adults to gain access to coverage under their parent’s policy until age 26.

Another victory in government’s eyes is that those with “pre-existing conditions” – those who were unable to purchase individual insurance in the past – can no longer be denied coverage. Meanwhile, tens of thousands of women whose plans previously excluded maternity coverage can now obtain the prenatal care and delivery services they require.

And finally, individuals who once found it difficult to navigate the arcane individual health insurance market, and were frustrated by their limited options, can now go to an online exchange and select from a broad set of choices.  

The “Upsets”

For all the victories, other results have left many ACA fans upset and disappointed.

Despite the big push by supporters, it is estimated that only 15 percent of Americans eligible to enroll through the exchanges signed up.

In the 17 states that built their own exchanges, 20 percent of eligible individuals enrolled on average. Vermont led the pack at 54 percent. In contrast, the 27 states that defaulted to the federal exchange saw an average enrollment of only 12 percent.

And a mere 25 percent of individuals between 18 and 34 years of age decided to enroll, compared to the government’s target of 40 percent.

We can speculate that many younger individuals who stayed uninsured assumed they didn’t qualify for subsidies. Or, perhaps they believed the minimal penalty was a better financial choice than the fee they’d need to pay./>/>

And for some in this group, purchasing health insurance this year seemed no more attractive than in the past, so they chose not to sign up. Others perhaps are waiting to see what will happen to the “skinny” catastrophic insurance options of the past before signing up for more comprehensive coverage.

In addition, the percentage of Latinos who signed up in year one was less than other ethnic groups and lower than projected. Language was likely a barrier for some. Few websites offered a Spanish-language portal or sufficient bilingual, bicultural “navigators” to assist non-English speakers with the enrollment process.

We can expect that many of these factors will change when the penalties for not enrolling increase and when previously wary individuals learn about the positive experiences of friends and family who enrolled successfully.

Medicaid also enrolled fewer people that originally hoped. Although the ACA expanded Medicaid eligibility for adults with incomes at or below 138 percent of the federal poverty level, 19 states opted not to accept the federally subsidies of this Medicaid expansion.

The reasons vary. Some states feared they could not afford the added cost of care once the federal subsidy decreased from 100 percent to 90 percent after two years. And others chose not to expand for political reasons.

But regardless of the reasons for these shortcomings, fewer people have health care coverage than if every state had expanded coverage and all exchange-eligible individuals had enrolled.

Bracket Busters

Amid the madness, what could have been the easiest victory proved disastrous.

The online federal and state exchanges were riddled with technological flaws. The antiquated state-based IT systems could not interface seamlessly with the patient-facing web portal. The complex process of linking different systems, combined with the high initial volume of inquiries, caused servers to jam and websites to crash. And some of the flaws in the fed’s online exchange continued, even up until the final buzzer sounded.

Across the country, people accustomed to the speed of a Google search and the simplicity of an Amazon purchase have been frustrated by the complexity of the online process and confused about their options.

Despite recognition that the technology had to work for the exchanges to be successful, businesses that specialize in this area were not brought in early enough or used at all. As a result, particularly in some states, the problematic IT issues discouraged many eligible applicants from completing their enrollment. As a result, many individuals remain uninsured who otherwise would be covered.

The Next Round

We now know a lot more about the ACA than we did when it was first enacted. And we have preliminary findings about the initial experience with the public exchanges. Still several substantial ACA outcomes remain up in the air.  

What Will Happen To Pricing?

Over the two next years, we will learn a lot about the “risk profile” of people who signed up through the exchanges.

Why does that matter? The success of the exchanges is dependent on “risk pooling.” Insurance companies limit the price of health care coverage for the sickest individuals by spreading the cost across a larger population./>/>

As such, the “average” health of the group determines the price an insurer charges.

If more sick people than healthy people enrolled through the exchanges, the increased “disease burden” of the group will cause insurers to hike up prices in the future. But if enough of the newly insured are relatively healthy, they could help drive down the average cost.

It will take at least a year for insurers participating in the exchanges today to gain enough experience with these newly insured individuals. And it will take longer for those sitting on the sidelines to decide whether to participate.

But if the prices on the public exchanges rise too much, healthier individuals will seek alternative, lower priced solutions through the newer private exchanges and other insurance options.

Will Insurance Networks Continue To Narrow?

To contain costs, many insurance companies are planning to offer insurance plans with a smaller set of low-cost physician and hospital options – an approach referred to as a “narrow network plan.”

The California health insurance exchange initially included a list of the physicians and hospitals in each insurance product’s network. But they were quickly pulled down due to uncertainty and error. Most states didn’t even try to publish the information.

Some hospitals and medical groups were excluded from the exchanges due to their high costs. In response, they used the media to encourage patients to bypass the exchanges and purchase alternative products.

Some have taken legal action. Already, a law suit in New York forced one insurer to expand its network.

For price-conscious individuals, the size of the network may not be an issue as long as access to care isn’t compromised.

But just how narrow will these networks get before consumer backlash topples these products? That remains to be seen.

How Will The Newly Insured Adapt To Cost-Sharing Features?

There are four types of plans on the exchanges: platinum, gold, silver and bronze. Each represents a different balance of monthly premiums and payments at the point of care (deductibles and co-payments).

The silver plan was the most popular one purchased through the public exchange. It was structured to cover an average of 70 percent of the total cost of care in monthly premiums. It requires patients to pay on average 30 percent of the total expense at the point of care.

Did individuals who purchased insurance through the exchange understand the financial implications of a silver plan? It’s one thing to read or hear about a $2,000 deductible. But paying $2,000 out of pocket after an emergency room visit or MRI scan may very well trigger buyer’s remorse.

Has The Madness Just Begun?/>/>

Despite some of the problems with parts of the ACA and the exchanges, neither will disappear.

We predicted the road w ould be bumpy for the first few years . The early returns confirm that expectation. But over time we can expect the good to dominate, the bad to be addressed, and the ugly to become a distant memory.

We don’t know if the low health care cost inflation of the past four years will continue or return to the year-over-year increases of the past.

We will need to find out just how much consumers factor quality and reputation over price when selecting health care coverage. And we will see how rapidly the ACA will move American health care forward with modern technology, which has the potential to improve the efficiency and effectiveness of care delivery.

Rather than thinking of March 31 as the end of health care’s March Madness, we should recognize that only the early rounds are complete. The biggest games are still to come./>/>


6 weeks ago

RM47mil KWSG contributions still unclaimed

Jun 9 2014 7:54am CDT | Source: Business Times Malaysia

Cambodia's Famous Battambang Circus
KUALA LUMPUR: About RM47 million of contributions in the Teachers Provident Fund (KWSG) still remain unclaimed, the Dewan Rakyat was tol ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia


6 weeks ago

Gold shop lost almost RM1mil

Jun 9 2014 3:50am CDT | Source: Business Times Malaysia

"GOLDEN ASIA" Tokyo Premiere Press Conference
KANGAR: A gold shop owner lost almost RM1 million after after the safe on in his shop was broken into ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia


6 weeks ago

Motion to debate MAS losses in Dewan Rakyat rejected

Jun 9 2014 3:39am CDT | Source: Business Times Malaysia

The Prince Of Wales Visits The Royal International Air Tattoo
KUALA LUMPUR: AN emergency motion to debate the losses incurred by Malaysia Airlines last year, amounting to RM1.2 billion was rejected by the Dewan Rakya ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia


6 weeks ago

MH370 Tragedy: Hisham: RM27.6 mil spent on 1st phase of SAR

Jun 9 2014 2:11am CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia spent some RM27.6 million in its first phase of the search operations for missing Malaysia Airline flight MH370, said Acting Transport Minister, Datuk Seri Hishammud ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia


6 weeks ago

9.1m litres of diesel seized in a month

Jun 8 2014 1:11am CDT | Source: Business Times Malaysia

PUTRAJAYA: The Domestic Trade, Cooperatives, and Consumerism ministry has seized some 9.1 million litres of diesel and property worth RM58 million since mounting ‘Operasi Diesel Se ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia


6 weeks ago

Girl, 9, awarded RM2.78m compensation for medical negligence

Jun 6 2014 4:56am CDT | Source: Business Times Malaysia

Government Weekly Cabinet Meeting
KUALA LUMPUR: A nine-year-old girl who suffered brain damage during her birth at a government hospital was awarded over RM2 ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia


6 weeks ago

Malaysia's total trade in April up 12pc

Jun 5 2014 11:52pm CDT | Source: Business Times Malaysia

KUALA LUMPUR: Malaysia's total trade in April 2014 rose by 12 per cent from a year ago to RM123.86 billion due to growing trading activities, International Trade and Industry Minister Datuk Seri Musta ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia


6 weeks ago

Works Ministry to spend RM20m for upgrading works at 50 accident black spots

Jun 4 2014 11:35pm CDT | Source: Business Times Malaysia

Iskandar Johor Open - Previews
JOHOR BARU: The Works Ministry will implement upgrading works at 50 accident prone locations in the country that have been identified this year invo ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia


6 weeks ago

Najib launches loan scheme for Ramadan traders

Jun 4 2014 10:24pm CDT | Source: Business Times Malaysia

EurAsia Cup presented by DRB-HICOM - Day One
PUTRAJAYA: Prime Minister Datuk Seri Najib Razak today launches RM45 million Ramadan Bazaar Schem ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia


6 weeks ago

Residents bring up objection against Kidex to Suhakam

Jun 4 2014 4:49am CDT | Source: Business Times Malaysia

PETALING JAYA: A group of 20 Petaling Jaya residents held a meeting with the Human Rights Commission of Malaysia (Suhakam) over their objection against the proposed RM2.2 billion Kinrara Damansara Skyway (Kid ...
Source: Business Times Malaysia   Full article at: Business Times Malaysia


Don't miss ...


<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.


blog comments powered by Disqus

Latest stories

China's rotten meat scandal spreads to Japan (Roundup)
Beijing/Tokyo, July 22 (IANS) A rotten meat scandal which led several fast food chains to withdraw some of their most popular dishes in China this week spread to Japan Tuesday, as McDonald's announced it had stopped selling fried chicken.
Study reports worldwide drop in HIV cases
Sydney, July 22 (IANS/EFE) The number of people with HIV has dropped by 18.7 percent since 2012, according to a report made public at the 20th International AIDS Conference being held in Melbourne.
China seals McDonald's, KFC supplies after scandal
Beijing, July 22 (IANS) Authorities in China have rushed to seal up suspicious meat products in fast food chains, including McDonald's and KFC, after one of their suppliers was accused of selling stale meat.
Rotten meat scandal in China hits Starbucks
Beijing, July 22 (IANS/EFE) The US coffee chain Starbucks has withdrawn some of its sandwiches from its stores in China following a scandal affecting one of its meat suppliers, Shanghai Husi Food Co., which was shut down by authorities for selling expired meat.

Latest from the Network

Is the ‘iTime’ Apple’s second smartwatch?
As the age of the smartwatch begins, everyone is keeping a close eye on Apple. Considering the outrageous success of the iPhone, analysts and consumers alike believe that Apple might be able to turn the wearable...
Read more on Apple Balla
5 awesome paid iPhone and iPad apps that are free for a limited time
Did you miss out on any of the awesome paid iPhone and iPad apps we’ve shared with you over the past few days that have gone on sale for free for a limited time? Don’t worry… we’ve got five more for you today....
Read more on Apple Balla
Nvidia Shield Tablet: Mobile Gaming Strategy Gains Clarity
Nvidia announced today two new members of the SHIELD family, the SHIELD tablet and the SHIELD controller for gaming. This comes on the heels of the Nvidia SHIELD portable released a year ago.  I think the SHIELD tablet...
Read more on Apple Balla
Joko Widodo wins Indonesian presidential election
Jakarta, July 22 (IANS) Governor of Indonesia's capital city Jakarta Joko Widodo was Tuesday declared elected Indonesia's new president after the General Election Commission (KPU) settled the vote tally. Making the...
Read more on Politics Balla
Will Investors Get Excited If Apple Only Beats EPS By A Dime?
One of the consequences of Apple doing a 7 for 1 stock split is that it will make any EPS beat look materially smaller than before the split. While Tim Cook has provided guidance that is more in-line with what the...
Read more on Apple Balla
Naomi Watts for Demolition?
Naomi Watts in talks to star in 'Demolition'. 'The Impossible' actress is in negotiations to appear alongside Jake Gyllenhaal in the upcoming drama, which is to be directed by 'Dallas Buyers Club' filmmaker Jean-Marc...
Read more on Movie Balla
Bradley Cooper had never met Vin Diesel
Bradley Cooper had never met his 'Guardians of the Galaxy' co-star until they appeared together on a talk show to promote the finished film. The 39-year-old actor provides the voice for Rocket the racoon in the upcoming...
Read more on Movie Balla
Scandal-hit Mexico shelter centre of physical abuse
Mexico City, July 22 (IANS/EFE) More than 150 abuse complaints have been filed against the La Gran Familia shelter in the western Mexican state of Michoacan, where 500 children who lived in squalid conditions were...
Read more on Politics Balla
Lovato takes help from Pinterest for hair looks
Los Angeles, July 22 (IANS) Pop star Demi Lovato says she takes hair style inspiration from Pinterest, a visual discovery tool. The 21-year-old, who currently sports lavender and silver ombré-coloured tresses, gets...
Read more on Celebrity Balla
Gaza toll 609 as Israeli offensive rages on
Gaza/Jerusalem, July 22 (IANS) The relentless Israeli military campaign dubbed Operation Protective Edge targeting the Gaza Strip, which has lasted for more than two weeks, has killed over 600 Palestinians and wounded...
Read more on Politics Balla