Some New Frustrations as Health Exchanges Open

1. Some New Frustrations as Health Exchanges Open Robert Pear and Abby Goodnough NY times

2. Problems with Health Exchange • Health insurance marketplace opened for business Saturday • Long delays in accessing HealthCare.gov • Difficulty with identity proofing, retrieving old passwords and logging into account • Average time to complete applications was 90 minutes • Projected 13 million enrollment now down to 9.1 million • Two tasks • Enrolling more of uninsured • Renewing coverage for those that already had it

3. Problems with Renewing Coverage • Health Insurance prices set to increase up to 20% • Center for Medicare and Medicaid Services estimates prices rise 5% for average person • New data suggest that many of nearly 7 million people who bought insurance will have to change to different health plans to avoid paying more • An inconvenience for consumers • A 40 year old with cheapest midlevel or silver plan will pay $220 a month next year compared to $181 a month this year • Failure to re-enroll suggest even with subsidized premiums not worth the benefit they received

4. Problems with Renewing Coverage • Lower premiums to entice customers but much higher deductibles • Premiums increased much more sharply in places where fewer insurers were competing for customers • Muscogee County: 74 plans available • 52 plans deductibles>$2,500, 17 plans >$5000 • In Charleston: 14 plans available • 9 plans deductibles>$2,500, 3 plans>$5,000 • Caroline F. Pearson, vice president of Avalere Health: “Next year will see another reshuffling. Eventually in a year or two, we will start to stabilize”

5. Number of Insurers State by State

6. Problems with Expanding Coverage • Enrollment events, tax penalties ($325 or 2% income), more emphasis on rural and minority groups • Coverage Gap in states not expanding Medicaid • Income above current Medicaid eligibility but below lower limit for Marketplace premium tax credits • Kaiser Family Foundation poll from October found 9/10 uninsured Americans had no idea when open enrollment starts, 38% had no intention of buying coverage

7. Further Challenges • Supreme Court agreed to hear a case about subsidies for the ACA • Republicans captured senate • Obama ratings low (40% approval)

8. ACA in the Future • 25% more insurers participating next year • Leads to increase in supply which leads to: • Increase in quantity • Decrease in Price • ACA will stabilize in future with more entry

9. Market Failure? • Lower supply due to uncertainty • Insurers do not want to enter without knowing how supreme court decision and congress handle ACA • Adverse selection • Prices rise due to less entry • Healthy people withdraw • Prices rise even further • If subsidies are declared unconstitutional further exacerbate this problem.

10. Works Cited • http://www.nytimes.com/2014/11/15/us/politics/cost-of-coverage-under-affordable-care-act-to-increase-in-2015.html?ref=health • http://www.nytimes.com/2014/11/16/us/health-insurance-marketplace-opens.html?ref=health • http://www.nytimes.com/2014/11/15/us/health-care-act-enrollment.html?ref=health