President Barack Obama plans to push back the second-year start of enrollment in Affordable Care Act health plans, a move that would let insurers adjust to growing pains in the overhaul and potentially stave off premium increases before the 2014 congressional elections.
The enrollment period, previously scheduled to begin Oct. 15, 2014, will now start Nov. 15, said an official with the U.S. Department of Health and Human Services who asked not to be identified because the decision isn't public.
Technology failings in the new government-run insurance exchanges are undermining efforts to attract the broad array of customers needed to keep plans affordable in the long run. Avoiding a large increase in prices next year is "absolutely critical" if Obama wants to preserve his signature legislative achievement, said Ana Gupte, a Leerink Swann & Co. analyst.
"The death of this law would be for health insurance companies to price policies for 2015 in a way that premiums skyrocket," Gupte said in an interview. "At that point, it's a death spiral and it's over. So he needs to do something."
Moving the year-two filing deadline back a month gives insurers more time to analyze claims from the first year of plans sold as part of the Patient Protection and Affordable Care Act. The young, healthy people needed to balance the cost of care for older consumers aren't likely to sign up in large numbers until March, said Jonathan Gruber, a Massachusetts Institute of Technology economist who helped design the law.
"This is an important business for them and they want to make smart decisions about how they set their rates," Gruber said in a telephone interview. "It's in the nation's interest they get time to make those decisions."
The first-year enrollment period that began Oct. 1 runs through March 31, 2014. Insurers would have then had until May to decide if they wanted to participate in the next round and determine what rates they would charge.
The HHS official said that if the rate filing deadline is pushed back, the agency also needs extra time before enrollment begins to review the plans and premiums, certify them, load them into the government's health insurance website, and let insurers double-check they are correct.
"If their implementation is not going to be improved in a meaningful way by the end of December, extending the enrollment period would be a wise decision," Leerink Swann's Gupte, who is based in New York, said.
Starting enrollment after the Nov. 4 congressional elections may also be important to a president seeking to hang onto the Democrat-led Senate and maintain or gain seats in the Republican-led House of Representatives. Popularity of the Affordable Care Act has already fallen to record lows.
A Kaiser Family Foundation survey found that just 33 percent of Americans now support the health-care law, down from 38 percent a month earlier. That's the lowest support level measured by the foundation since the law's passage in March 2010, the Menlo Park, Calif.-based nonprofit said.
While 106,185 people were able to select private plans through the government exchanges last month, almost 1 million more abandoned the application process before choosing a plan, in some cases because they encountered website errors and long wait times.
Some states are reporting that sign-ups have begun to accelerate now that the initial website errors are being fixed. California's exchange said yesterday it has now enrolled almost 80,000 people in health plans.
Hundreds of thousands of Americans meanwhile have received letters from their current insurers informing them that their existing coverage is being canceled because it doesn't comply with the new health law rules. Obama proposed last week that state insurance commissioners allow health plans they regulate to extend 2013 policies that otherwise would be canceled for as long as a year.
At least 12 states have agreed to the request, according to America's Health Insurance Plans, an industry lobby group. California, the most populous state, said it would stay on the original course, joining New York, Washington, Minnesota, Vermont, Massachusetts and Rhode Island in refusing Obama's call to allow extensions of substandard plans.
The changes in policy, previous delays in health law provisions and the troubled debut of the exchanges have shaken public confidence, tested the faith of the Affordable Care Act's Democratic supporters and reinvigorated Republican opponents who in the past five weeks have led more than six congressional hearings to highlight the flaws.
The one-month delay revealed Thursday is just long enough so "consumers will not see their 2015 premiums until after the midterm elections, instead of immediately before," said Mike Tuffin, a former insurance industry lobbyist who is now managing director of consulting firm APCO Worldwide's Washington office. "One doesn't have to be a conspiracy theorist to divine the motive here."
The online exchanges, where people can shop for private health insurance with the help of government subsidies, are the core of the Affordable Care Act's promise of extending medical coverage to most of the nation's 48 million uninsured.
Obama has set a Nov. 30 deadline for the site to be repaired, allowing what his administration calls "the vast majority" of customers to enroll.
Getting the federal exchange fixed soon is necessary because almost all Americans are required to have health insurance by March 31 or pay a fine of as much as 1 percent of their income. Most Americans are already covered, either through an employer or government programs like Medicare and Medicaid.