Of Blue Cross and Blue Shield’s 375,000 individual policyholders, 43% will not be able to keep their health plans. Even if they liked them. Period.
Over 160,000 consumers have received health insurance cancellation letters in the mail from Blue Cross and Blue Shield of North Carolina, the dominant individual market player on the state’s federal marketplace. These plans have been canceled because they are not grandfathered plans. Any individual policyholder who has switched plans since the federal health law passed on March 3, 2010 will have to purchase a bloated health plan that meets Obamacare requirements. Even more customers will most likely be pushed onto the government-run marketplace, as insurance companies do not have to renew grandfathered plans.
The Chosen One
To the media‘s knowledge, just one North Carolinian has successfully signed up for a subsidized health plan through healthcare.gov, the federal health insurance exchange website. That person’s required personal information somehow made it through the intricate mess of healthcare.gov’s technological glitches — an amazing feat.
But the premium still has yet to be paid, since the payment option on the government’s server does not work.
WCNC reports that, as of October 25th, fewer than 1,000 individuals have applied for BCBS NC individual exchange plans.
Terms of Enrollment
Obamacare supporters project that enrollment numbers will climb significantly once the federal exchange website is fixed, especially towards the end of the enrollment period (which will most likely be unilaterally extended even further if technological problems persist).
Since the pathetic rollout of the health insurance exchanges, the term "enrollment" has had multiple meanings: visiting the site, creating an account, even cancellations. Rather, enrollment should be defined as the complete and thorough process of an individual creating an account, shopping for coverage, and signing up for a health plan on the exchange.
Enrollment numbers have also been inflated, as a majority of exchange applicants are Medicaid-eligible. The Advisory Board Company reports:
About 90% of Washington’s "completed enrollments" are in Medicaid, with the majority of enrollees newly eligible under the Medicaid expansion that takes effect on Jan. 1.
While data isn’t available across all 15 state-based exchanges, it’s a similar story in Minnesota (90% of early enrollment has been in Medicaid and other public programs). And Connecticut officials report that roughly half of all early enrollment through their exchange has been in Medicaid.
Obamacares?
Insurance plan cancellations, website issues, and erroneous measures of the exchange’s success clearly illustrate critical Obamacare issues. These problems overshadow an even larger "oops" that the administration will have to hammer out at some point in the near future.
In addition to the distribution of premium assistance subsidies to eligible exchange consumers, individuals earning below 250% of the Federal Poverty Level ($28,000 for an individual) who purchase exchange plans will receive additional cost-sharing subsidies that limit out-of-pocket health care expenses. However, the 2014 federal budget sequester will scale back these subsidies by 7.2% — equating to a deficit reduction of $286 million before FY 2014 ends.
Even though the reallocation of premium assistance subsidies has yet to be determined in states that have opted for federal exchanges, these tax-credits will remain untouched. Within the Budget Control Act, the Gramm-Rudman-Hollings Act of 1985 exempts refundable tax-credits from any federal sequestration. Chris Jacobs, Senior Policy Analyst at the Heritage Foundation, explains potential individual impacts of the cost-sharing cuts in the Wall Street Journal:
Individuals who have managed to enroll in subsidized health insurance will find they’ve been misled about their copays and deductibles. Families who currently think their plan will charge a $20 copayment for doctor visits may instead face a $25 charge when the sequester kicks in. Individuals who now believe they face maximum out-of-pocket costs of $2,000 may end up paying hundreds more.
This scenario will have to be avoided at all costs, considering the fact that cost-sharing cuts are not mentioned on the exchange website. If low-income individuals will not be burdened, insurance companies will. The federal health law states that under the cost-sharing subsidy provision (section 1402), insurance companies must increase the actuarial value of coverage they provide to such qualified consumers. In return, the cost-sharing discount will be funneled back to the insurance company. But the 7.2% sequester cut means insurance companies will not receive the full subsidy amount.
The cost-sharing sequester will effect either eligible consumers or insurance companies — most likely insurance companies, since the Obama Administration will attempt to keep at least one of its many original promises to the American public when it comes to handing out affordable health insurance.
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