With the Department of Health and Human Services announcing that plans that were supposed to be cancelled this year can now be renewed for another two years, "the health insurance plans participating in Obamacare are a very worried group right now," according to health insurance industry consultant Robert Laszewski.
Because he's in close touch with insurance industry executives, Laszewski became a widely-cited figure during the botched rollout of President Obama's health care law, and now he says insurers who agreed to take part in the law are coming up against a key concern: "The fundamental problem here is that the administration is just not signing up enough people to make anyone confident this program is sustainable."
Though the department has reported that 4 million have signed up for health care plans through one of the program's new insurance exchanges, that number drops to 3 million when individuals who haven't kept up with paying premiums are included (about 20 percent never paid the first month's premiums, and an additional 2 to 5 percent haven't paid the second month's premium, Laszewski writes, citing insurance carriers).
That isn't enough to create a sustainable risk pool with a critical mass of young and healthy enrollees to offset the cost of covering older and sicker individuals who are now guaranteed an offer of coverage.
The enrollment problem is exacerbated by Obama's attempt to reduce the number of headlines this fall about plans getting cancelled as a result of the law ahead of midterm elections in which Obamacare is already putting Democrats on the defensive.
Because people with existing insurance tend to be healthier, insurers were hoping they would flood into the insurance pool if their plans were cancelled.
Though a number of policies to cushion the blow to insurers were put in place for the first three years of Obamacare, once they expire it will be less likely that insurers will want to absorb costs of offering insurance on the exchanges.
"I don't expect the insurance industry to be patient past 2015 before it has to begin charging the real cost of the program to consumers," Laszewski writes.
Open enrollment for this year is scheduled to end March 31.