President Obama has touted the success of the second year of open enrollment for his signature healthcare law. “The Affordable Care Act is working,” Obama said in a Facebook video. “It’s working a little better than we anticipated.” But courtesy of the Department of Health and Human Services, we have a signal that all may not be going a smoothly as the administration would have us believe.
Last Friday, HHS announced that it was effectively extending the Feb. 15 deadline for individuals to purchase insurance through Obamacare, so that those who claim that they didn’t know about the tax penalties on the uninsured could have more time to sign up for coverage. This is ridiculous on several levels.
To start, it’s yet another indication that any deadline that the administration sets is merely written on water, subject to arbitrary changes. Furthermore, the individual mandate has been one of the most publicized aspects of the healthcare law and the subject of a major Supreme Court case. Sure, not everybody follows the news, but typically the federal government isn’t keen on cutting slack to people who aren’t aware of the law.
In addition, signing up for insurance now wouldn’t protect individuals against any fines they owe for not having insurance in 2014, but it would prevent a tax penalty from being assessed for the current tax year when they file taxes in 2016. The administration’s decision, thus, is what poker players would call a tell. The move is an indication that enrollment isn’t going as well as hoped and they want more time to sign people up.
HHS said that as of the initial deadline of Feb. 15 to purchase coverage through Obamacare, the administration had signed up or re-enrolled 11.4 million Americans. This was at the end of a desperate push that included Obama himself recording a video with Buzzfeed featuring him making funny faces and using a “selfie stick.”
The effort also included constant reminders that tax penalties await those who didn’t enroll. Though the enrollment figure was above the 9.9 million estimate that the administration made a few months ago, that estimate set the bar intentionally low. In reality, the CBO had originally estimated 13 million enrollees through 2015.
It’s also worth cautioning that the 11.4 million number could understate the eventual enrollment. When open enrollment ended last spring, the administration touted more than 8 million signups — but that number eventually dropped to 6.7 million, as some of those who signed up didn’t keep up with their premium payments and HHS conceded it had accidently counted 400,000 in dental plans as full coverage.
There’s also a looming proplem next year, when the CBO projects that the exchanges are supposed to make the leap to signing up 21 million Americans, or nearly double. As the liberal website Talking Points Memo highlighted, even proponents of the law are starting to worry that the administration has already signed up the low-hanging fruit (i.e. those most in need of health coverage). In many states, the enrollment growth has stalled in year two.
It’s important to keep in mind that beyond the headline number, to remain sustainable, the law has to sign up a critical mass of young and healthy Americans to offset the cost of covering older and sicker enrollees. Before the exchanges launched, the administration indicated the critical mass was roughly 40 percent. But in reality, only 26 percent of enrollees have come from the 18 to 34 age group as of mid-January, according to the administration.
By pushing open enrollment back until after individuals file taxes and see the fines, the Obama administration hopes to coerce young Americans into purchasing a product they’ve already decided they don’t want. Public rhetoric notwithstanding, that’s a precarious place to be.
