WASHINGTON - The opening of the nation's new health marketplaces
today - which has stirred hopes for success from advocates and failures
from their opponents - is only the beginning of a long path to determine
their true impact on the health care system, analysts say.
going to be a gradual process," said Joel Ario, formerly the director of
the Office of Health Insurance Exchanges at the Department of Health
and Human Services and now a managing director at Manatt Health
Solutions. Tuesday is "an important date, but it's just one day in a
Until now, most reviews of the exchanges have
been based on fragments of information and news of early glitches, such
as the delay in electronic filing for small-business insurance by a
month, or a year's delay in the requirement for businesses to offer
health insurance to their employees or pay a fine.
Tuesday. Uninsured Americans will have six months to buy insurance
through the exchanges, a series of state- and federal-run websites. The
sites need to work and connect insurance customers to where they need to
find information, shop among various insurers and pay for their
Early Tuesday the glitches were apparent, as consumers
in Illinois, Texas and Idaho, to name a few states, were greeted by a
message saying their sites were down. Exchanges in California, the
District of Columbia, Maryland and New York, among others, were working
At least 7 million new insurance customers, the
Congressional Budget Office estimates, need to do that in 2014 for the
exchanges to be considered successful and to put new people into the
If enrollment falls below that, "it's probably not a good sign," Ario said.
Ario and others say there will be several landmarks along the way to determining how well the exchanges are working.
example, as people begin to use their new insurance in January, other
people may feel inspired to sign up. Or, as people in states that did
not expand Medicaid realize they won't have affordable insurance, they
may place pressure on state governments to expand. And while government
officials say they expect "glitches" on the technical side as one
electronic hub tries to connect millions of consumers with state and
federal exchanges, the Internal Revenue Service for salary verification,
Medicaid and private insurers, any real issues could cause consumers to
After that initial enrollment frenzy, experts will be
watching to see how bringing more people into the pool affects prices,
health and the overall business environment.
The people who need
coverage - who are waiting for it because of pre-existing conditions or
because they could not get insurance in the past - will sign up right
away. Success will come in the numbers who sign up a little later who
aren't in as much of a rush, Ario said.
"The online functionality
is a key thing to watch, but it doesn't need to totally be there," Ario
said. "Things won't be as functional in year one as they are in year
Ron Pollack, founding executive
director of the health care advocacy group Families USA, said people
need to look at the first few months as "a marathon, not a sprint."
"The 181 days after October 1 are no less important than day one," Pollack said.
come Jan. 1, he said he does expect to see an influx in enrollment as
people begin to use their insurance, and everybody else sees how it
"Most people in the country who will benefit do not know
how the law will affect them," Pollack said. "I think that's going to
change at the three-month mark as people start receiving the benefits."
Simon, a professor of public affairs at Indiana University who
specializes in health economics, said people will continue to watch
small businesses to see if they switch people to part-time employment to
avoid paying for their insurance. Thus far, she said it's difficult to
In July, the Obama administration delayed for a year the
requirement that businesses with more than 50 employees either provide
coverage or pay a fine. Simon said it will be interesting to see if
businesses prepare better for 2015 or if they delay, assuming the
mandate and fines will be delayed again. Employers asked for the delay
because, in part, they said they were not prepared for 2014.
Technological changes and payment
time, most of the law's issues will "work themselves out," said Bernard
Tyson, chief executive officer at Kaiser Permanente.
doctors use electronic health records to participate in parts of the
law, they're learning more about their patients, Tyson said. He hopes
that leads to fewer errors, duplication and even infection as patients
are better monitored.
"The data can show how things are working for populations," he said.
doctors will communicate with patients electronically more often.
Patients will pay their bills over their smartphones or check medical
records on their tablets.
"Banks went the same way 15 years ago,"
Tyson said. "Now it's almost scarily easy to bank. I think our industry
will follow suit: We'll protect people's privacy and make it more
First, it's critical that payments flow as designed
from Treasury to consumers to insurers, said Cheryl Smith, who helps
state governments manage health through Deloitte Consulting LLP. She
also worked for Republican former Utah governor Mike Leavitt when he ran
the Department of Human Services and at Leavitt Partners.
market will look different, Smith said, because some of the traditional
methods used by actuaries, who predict health costs based on everything
from who will be in the insurance pool to how many people are expected
to get the flu this year, will have to change. That's because the new
law adds no lifetime limits on coverage and a prohibition on higher
rates for the sick.
"It's a best-educated rather than scientific guess," Smith said. "That's how they determine what the rates will be."
The Massachusetts experience
2006, Massachusetts passed a law, signed by Republican then-governor
Mitt Romney, that provided much of the inspiration for the Affordable
Care Act. Jon Kingsdale ran the state's health insurance exchange
created by that law.
"I think the first marker is to get people to answer the phone, and get the website up and running," Kingsdale
said. "Can you get a determination of your eligibility and your subsidy
and whether you're eligible for Medicaid? Does the shopping work?"
that, he said, it's critical to see how many people have enrolled after
six months, not so much at the beginning. It doesn't matter, Kingsdale
said, if the new insurance customers are young, old or sick. They just
need to enroll.
Massachusetts, Kingsdale said. "did have some
substantial hiccups." The state started with only those people who would
not have to pay anything for their insurance, and then they phased in
other customers two months later.
The federal government, he said, had "a lot longer than we did to set up."
Eventually, Kingsdale said, they noticed "one very dramatic development" that he sees emerging with the federal law, too.
There was a "substantial increase" in competition.
exchange makes very transparent to the individual consumer what the
differences are," Kingsdale said. "It turns out that people who pay for
their own coverage ... are very price-sensitive shoppers."
people bought "skinny" benefit packages with substantial cost-sharing in
Massachusetts. They went for plans with lower premiums, even when they
had never heard of the insurer before. Before the Massachusetts
exchange, he said there were only two companies with 95% of the market.
are now 10 carriers competing robustly," he said. "Which, frankly, is
exactly what we need to control the market long-term."
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