In less than two weeks, Obamacare’s health insurance exchanges will be open for enrollment. Three months after that, the law’s major coverage provisions officially go into effect. It’s the biggest expansion of the entitlement state in decades, and a massive bureaucratic undertaking. Even the law’s biggest supporters don’t expect it to go off without a hitch: President Obama warned earlier this year that the law will likely come with some “glitches and bumps.” Here are eight things that could go awry with the law when it opens for business, and in the years beyond.
1) When more people have health insurance, it could be harder to see primary care physicians: There’s already a shortage of primary care physicians relative to national demand. Increasing the number of people who have health insurance tends to increase the demand for physicians’ services. As the Associated Press reported this week, “A shortage of primary care physicians in some parts of the country is expected to worsen as millions of newly insured Americans gain coverage under the federal health care law next year. Doctors could face a backlog, and patients could find it difficult to get quick appointments.”
2) Health insurers will limit doctor networks in order to keep prices down: When California’s insurance regulators first released information on health premiums through the state’s insurance exchange, they touted lower than expected rates. But the comparison was misleading, stacking the exchange’s individual premiums up against small business rates. And there was something else they didn’t say either: Many of the state’s health insurers held down prices by strictly limiting the available providers. “To hold down premiums,” the L.A. Times reported this week, “major insurers in California have sharply limited the number of doctors and hospitals available to patients in the state's new health insurance market opening Oct. 1.”
3) Employers will cut hours for workers. Jed Graham of Investor's Business Daily has put together a list of more than 300 employers who have already reduced hours or full-time employment in order to avoid potential requirements under Obamacare. Labor leader Richard Trumka, who supported the law, has said that employers are now cutting hours to avoid the law's mandates. And this is with the employer mandate delayed for a year.
4) Obamacare navigators and other enrollment aides could violate the privacy of exchange users: The health law budgets some $67 million for “navigators” to help people sign up for coverage. By necessity, these individuals will handle sensitive personal information required to apply for coverage through the law’s exchanges. That creates an enormous opportunity for fraud and deception. And yet the navigators, and the enrollment assisters working in state-run exchanges will receive only minimal oversight and training. They’ll be approved after just 20 or 30 hours of training. And the federal government won’t provide navigators with IDs, or maintain a list of individuals who are approved by the program. That could make it easy for unscrupulous individuals to present themselves as navigators when they are not in order to steal personal data — a fraud that consumer advocates are already expecting.
5) The online exchange technology won’t be ready — or won’t work as well as its supposed to. The state of Oregon, one of the states that has been most enthusiastic about implementing the law, has already said that online enrollment will not be available on October 1. Health officials working on the law, meanwhile, have begun to view the beginning of enrollment in October as a “soft launch,” according to The Washington Post. And independent health care investment analysts are warning that when the exchanges are launched that “technical glitches and functional issues” are “probable.”
6) Employers could move many more workers than expected onto the exchanges, and increase the price of the law as a result. Small changes in household premium contributions for workers in employer sponsored insurance could make the exchanges much more attractive to millions of people, according to a recent study in Health Affairs. “As household premium contributions rise,” the study explains, “people are increasingly eligible and motivated to participate in the exchange, because they will receive a federal premium subsidy and an effective wage increase (to compensate for leaving employer-provided insurance).” Adjusting the average national premium contribution by just $100 could push 2.2 million people to move into the exchange, the study warns, and, thanks to greater reliance on public subsidies for coverage, increase the law’s federal price tag by $6.7 billion.
7) The exchanges will grant subsidies that are wrong, or need to be repaid: It’s difficult to figure out how to calculate an individual’s household income for an upcoming year — and even if you can calculate it, there’s no guarantee it won’t change. Problems with income estimation will likely lead to inaccuracies regarding eligibility for the law’s subsidies. One study last year estimated that roughly 2.6 percent of exchange applicants “judged eligible for subsidies would receive advance payments on those subsidies that were too high by $208 per year, on average.” Others will get subsidies that are too low. Meanwhile, families with fluctuating paychecks could be on the hook for repaying subsidies to the Internal Revenue Service if their incomes change throughout the year. Even with proper reporting, one recent study estimated that “22.6 percent of subsidy recipients could owe repayments when they file their taxes.”
8) Individuals whose income hovers near the Medicaid eligibility line could be forced on and off the program. Income fluctuations are also a big potential headache for individuals and families whose incomes hover right around the eligibility line for Medicaid. This creates a problem known as Medicaid churn. And it could affect a lot of people. A 2011 study by health professors at Harvard and George Washington University found that over six months, “more than 35 percent of all adults with family incomes below 200 percent of the federal poverty level will experience a shift in eligibility from Medicaid to an insurance exchange, or the reverse.” Over a year, that figure rises to 50 percent. Administering benefits to that population could be a big bureaucratic headache. Having their coverage elgibility constantly shifting back and forth's also likely to cause problems for the individuals affected themselves.