Obamacare

Eight Things That Could Go Wrong With Obamacare

Congress passed it, now we're seeing what's wrong with it

|

Whitehouse.gov

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.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

22 responses to “Eight Things That Could Go Wrong With Obamacare

  1. Best to limit it to only eight. To avoid the writer’s cramp.

    1. Seriously, this could go on as a series for the next year.

      1. I look forward to that happening… much to the dismay of the pro-ACA libs.

  2. Evacuate? In our moment of triumph? I think you overestimate their chances.

    1. I’ve got a bad feeling about this.

  3. You didn’t mention: It will cost a hell of a lot more than advertised.

    Of course, since that is a certainty, it is really in the “Will go wrong” category rather than the “Could go wrong” category.

  4. #5 really ought to be #1. There’s no way this IT monstrosity is going to be ready in time, if ever. Just look at the upper left of this chart. Single-department IT systems are complex and often fail, but this has to interface with not only the public and the companies involved, but the IRS, Treasury, Homeland Security, Social Security, HHS, and state Medicaid systems. If that is all working on October 1st, I’ll eat my hat.

    1. They’ve already thrown over the IT success.

  5. Perhaps 8 problems a day for 8 days. So the top 64 problems.

    Ideas for tomorrow:
    1) The $600 billion cut to Medicare to fund Obamacare might cause some problems.
    2) The 20% cut to hospitals and physicians payments that Congress has been delaying for over a decade might result in lower service.
    3) Workers in flexible positions might go to contract work (traditionally paying more, but without benefits) and use the subsidies to boost income.

  6. There’s only one thing wrong AFAIC; it hasn’t been repealed.

  7. Is it time to buy more ammo, yet?

  8. I think the worst thing that could go wrong with Obamacare is that there’s no way the IRS can enforce the insurance mandate.

    What are they going to do? Take couple million people to court for not buying insurance or neglecting to pay penalties? I heard they’ll withhold tax returns, which will only increase the law’s popularity with the nation.

    How many 26 year olds (who can’t leech off their parent’s plan) are rushing to the computer to find out what coverage makes sense for them? “OMG the exchange opens in less than two weeks! I have to buy insurance!”

    1. Depending on your point of view, that might actually be the best thing about Obamacare that could go wrong. ;-

  9. whoever posted the Hellraiser themed fiction on sebilius…you should know i cant look at her without remembering that.

    i cant take her seriously as anything but a murdering rapist anymore.

    1. That’s just ridiculous! Obviously Sebilius belongs on a DeathStar, preparing to open fire on the rebellious tax avoiding scum.

      1. Put her in the hat and she looks just like the commander of the Death Star. Is there a pic out there like that?

  10. You guys are fucked.

    Welcome to nationalized health care….eventually.

    Now you’ve joined us civilized Canadians.

    1. Now, now. They’re our friends.

      There is no need to mock their misery.

  11. Can anyone explain to me how Obamacare is supposedly supposed to work? I’ve read hundreds of articles but I still don’t really understand.

  12. There’s another big danger for Obamacare – that the relatively young and healthy won’t show up in the needed numbers, destabilizing the risk pool and driving premiums up. That raises the out-of-pocket costs on everybody who doesn’t get subsidies, which includes a lot of young people with incomes lower than 400% (see this recent paper by David Hogberg and me, http://www.nationalcenter.org/NPA653.html), and also costs to the federal government because now the subsidies are higher for those receiving them.

    What’s that saying – if something can’t be sustained, it won’t be? I think that applies here.

  13. Number (1) is only a problem because the AMA works to keep down the number of doctors so that demand/pay stays artificially high. If AMA were forced to stop being a cartel, the problem would solve itself. It might anyway as PAs and DOs take over more MD functions, but you can bet that’ll get ugly . . .

  14. my roomate’s mom makes on the internet. She has been out of a job for six months but last month her paycheck was just working on the internet for a few hours. browse this site……

    http://WWW.RUSH60.COM

Please to post comments

Comments are closed.