Obamacare's transformational changes will create a myriad of challenges for Health and Human Services Secretary Kathleen Sebelius. Some of the most pressing are:
Q: Will the exchanges be fully functional on Oct. 1 when individuals are supposed to sign up?
Setting up health insurance exchanges in all 50 states plus the District of Columbia in itself is a major logistical challenge. In theory, starting on Oct. 1, qualifying individuals are supposed to be able to log on to a website not unlike Orbitz or Expedia, enter some personal information, have the system calculate the subsidy that they are entitled to (which varies by income), and provide them with a number of health plan options. But behind the scenes, this requires massive federal and state databases to communicate with one another and private insurance companies seamlessly.
Already, Oregon has said its website won't be ready in time, meaning individuals will initially have to go through approved brokers rather than sign up themselves on the web as originally envisioned. In July, HHS said it was weakening the income verification requirements because of the immense technological hurdles involved, meaning the government would increasingly rely on applicants' own claims about their income before doling out subsidies. And in August, the department's inspector general said that the government was months behind testing data security for the exchanges.
Q: Will enough individuals join the exchanges?
In order for the exchanges to be viable, experts believe a critical mass of roughly 100,000 people need to enroll in each state-based exchange. HHS has unleashed a major public awareness campaign, but as of August, a Kaiser Family Foundation survey found that nearly 70 percent of Americans had heard “only a little” or “nothing at all” about the exchanges.
Q: Will enough young and healthy Americans purchase insurance?
The success of Obamacare hinges on convincing enough young and healthy Americans with low medical costs to purchase insurance to offset the expense of providing coverage to older and sicker Americans, particularly those with pre-existing conditions. But with even cheaper plans expected to cost thousands of dollars a year for those who don’t qualify for subsidies, those with low medical costs may decide to forgo insurance and pay a penalty, which in 2014 is $95, or one percent of taxable income.
Q: Will the cost controls work?
Along with about $1 trillion in tax increases, Obamacare is supposed to be financed by wringing hundreds of billions of dollars of savings out of Medicare. HHS officials hope that they can encourage hospitals to become more efficient by adjusting the amount the government reimburses them for providing care. But some hospitals -- particular smaller community hospitals -- may find it difficult to compete, making it harder for Medicare beneficiaries to access care. If Congress intervenes to fix this access problem by raising reimbursement rates to these hospitals, it would explode the cost of Obamacare.