Smart SpendingSmart Spending

Obamacare faces next hurdles

After bumpy launch, the president's signature accomplishment encounters more challenges in the year ahead.

By businessed Jan 2, 2014 1:23PM
This post comes from Christopher Weaver at partner site The Wall Street Journal.

The Wall Street Journal on MSN MoneyNearly four years after President Barack Obama signed his health initiative into law, the Affordable Care Act is officially reshaping America's $2.75 trillion health-care system.

A survivor of bare-knuckle political fights, a U.S. Supreme Court challenge and a technologically disastrous rollout, the law now faces a fundamental test: Can its mix of government subsidies and market-based competition extend health insurance to millions of people whose medical conditions, income level or personal choice left them without it?

So far, there are some troubling signs. A high proportion of people signing up for new plans are older or have existing health problems -- and not enough younger, healthier people may be joining the plans to balance them out and make the plans profitable.
Early glitches in, the federal marketplace serving 36 states, as well as in some state marketplaces likely deterred younger customers, said insurers and actuaries. Less-healthy shoppers were more likely to persist and sign up, they said.
If the trend continues as 2014 enrollment closes at the end of March, insurers in the new marketplaces "will think twice about losing money" and withdraw plans, said Jim O'Connor, an actuary at Milliman Inc. Provisions of the law aim to limit insurers' risk by redistributing money to those with less-healthy customers, but it isn't yet clear how effective they will be.

Joanne Peters, a spokeswoman for the Department of Health and Human Services, which oversees the law's rollout, said the law "is making health insurance more affordable for young adults." Officials aren't yet able to provide demographic breakdowns of marketplace enrollees, she said.

Julie Bataille, communications director for the Centers for Medicare and Medicaid Services, told reporters this week that as of Jan. 1, "millions of Americans will have health insurance, many for the first time."

Meantime, some previously insured consumers are vexed that deductibles under the new policies are higher than under prior plans, which can make doctors' visits and procedures more expensive than they anticipated.

Moreover, 25 states have refused to expand Medicaid, the state-federal health plan for low-income people. The expansion was envisioned under the law as a backstop for the poorest uninsured, who now have few options in those states.

The array of challenges has hurt Mr. Obama's standing and public support of the law, which polls show dropped to a new low in late December.

Boosted by repairs to the online exchanges, 2.1 million people used them to obtain private insurance through Dec. 24, the deadline for picking coverage effective Jan. 1 in most states, U.S. health officials said Tuesday.

The number represents a surge since Nov. 30, when the nationwide figure was about 365,000, but it falls short of a September estimate by the administration that some 3.3 million people would sign up for private plans by year's end.

Man patient with cast on leg using crutches in exam room © DAJ, amana images, Getty ImagesPeople such as Carlos Gomez, a 55-year-old part-time retail clerk in Fort Lauderdale, Fla., who had been rejected by insurers because of a heart disorder, are among the law's beneficiaries.

Mr. Gomez recently signed up for a Humana Inc. plan that will cost him $150 a month after federal subsidies. As he and other customers with medical conditions gain coverage, they are upending insurers' traditional business model of charging riskier customers higher rates or denying them altogether, practices banned under the health law.

Tom Noland, a Humana spokesman, said that though "the launch of the exchanges has brought unforeseen developments for consumers, health plans and the government, we remain confident in our ability to succeed" in the new marketplaces.

Mr. Noland said Humana's experience managing private Medicare plans—which also can't turn away patients with existing conditions—would help it navigate the risks of the new system.

Meanwhile, hospitals such as Broward Health, a south Florida publicly funded hospital that has treated Mr. Gomez without compensation, stand to gain new paying customers.

Hospitals, required to treat patients who show up in their emergency rooms under a 1970s-era law, long have shouldered the costs of the uninsured. Now, those risks are expected to begin shifting to insurers and taxpayers.

Broward Health has invested about $100,000 in new computers to help people enroll online under the health law at 19 of its locations, said Chief Executive Frank Nask. The Fort Lauderdale health system treats about 14,000 people through a charity-care program, and about 4,800 of them are expected to qualify for the new plans, he said.

Before offering free care, Broward now will ask to see proof that patients were unable to obtain coverage under the law.

Mr. Nask said the financial implications of the shift aren't yet clear. "There's a lot more art to this than science," he said.

For-profit hospitals also are looking to speed the shift. Under the law, hospitals face up to $36 billion in cuts to government payments for uncompensated care over the next five years.

Tenet Healthcare Corp. sees the coverage expansion as a growth opportunity. The hospital operator spent $570 million treating uninsured patients in 2012, according to a November investor presentation. It is urging its own uninsured patients to enroll in coverage and lending its resources to nonprofits enlisted by the Obama administration to help people enroll in plans, such as the Epilepsy Foundation of Florida, which helped Mr. Gomez sign up.

Dan Waldmann, a Tenet senior vice president, said the company isn't focused on shepherding only its sickest patients into the insurance market. "We're enrolling young people, too," he said.

As the coverage begins, insurers have cautioned that many customers haven't yet paid their premiums, a requirement for coverage to kick in, and that data problems linked to's glitches persist.

Taken together, consumers who believe they are covered may find that their plans don't have complete enrollment information on file as they begin to seek care this week.

"There will be people who did everything they should have done, but whose information was somehow lost in the exchange, who will be seeking care," said Geoff Bartsh, vice president of Medica, a Minnesota-based insurer.

Mr. Gomez, the Florida heart disease patient, lost coverage offered by a previous employer last year. After that, he faced sky-high rates for coverage due to a stroke he suffered in 2008 tied to a heart condition called atrial fibrillation.

While uninsured, Mr. Gomez received piecemeal treatment at emergency rooms, along with a costly heart procedure at Broward Health. The hospital had charged his previous insurer more than $100,000 for an earlier, identical procedure, he said.

Prescribed the blood-thinning drug Pradaxa, Mr. Gomez was unable to fill the prescriptions—which retail for about $320 for a 30-day supply—after running out of free samples provided by his doctor. Pradaxa maker Boehringer Ingelheim GmbH declined to confirm retail prices.

"If something happens, just run to the emergency room," Mr. Gomez said his doctors advised. "That's why I need to have my insurance."

Under the law, he is eligible for a $402-a-month federal subsidy to help buy coverage, based on his income of about $12,000 a year. Knowing he would use medical services, he chose a top-shelf Humana plan with a monthly premium of $552 for a patient of his age, regardless of health.

Like many patients, he is still waiting for Humana to send a bill, though the Louisville, Ky.-based insurer is giving its first wave of enrollees until Jan. 31 to pay their initial premiums.

One younger consumer benefiting from the law is 27-year-old Candice Erickson in Bixby, Okla., who was diagnosed with lupus in February. After her husband switched to a new job, Ms. Erickson discovered private insurers no longer would cover her. "Once this ACA thing goes through, you can call us back," Ms. Erickson said insurers told her.

This month, she hopes to get a policy from Blue Cross Blue Shield of Oklahoma -- though on New Year's Day she was still working out details, including whether she would qualify for subsidies to help cover the cost.
"As a program of this magnitude is implemented, we're dedicated to educating our members about the enrollment process," said Lauren Perlstein, a spokeswoman for Health Care Services Corp., parent company of Blue Cross Blue Shield of Oklahoma.
More from The Wall Street Journal:
Jan 2, 2014 1:55PM

You cannot help the poor by destroying the rich.
You cannot strengthen the weak by weakening the strong.
You cannot bring about prosperity by discouraging thrift.
You cannot lift the wage earner up by pulling the wage payer down.
You cannot further the brotherhood of man by inciting class hatred.
You cannot build character and courage by taking away people's initiative and independence.
You cannot help people permanently by doing for them, what they could and should do for themselves.

........Abraham Lincoln

Jan 2, 2014 1:34PM
His "signature accomplishment"???? Really?? You sure you want to state it that way, Money Editor? The program is a total failure already!! That pretty much makes Obama a total failure according to that statement: "signature accomplishment".
Jan 2, 2014 1:47PM
America will grow to hate this law more than any other.   This will be the demise of the democrat parasite party.  This law, will sink them for the next two decades.   Republicans should just get out of the way, make NO changes, and let it die.   They should begin with a flood of court cases to make sure every provision of the law in in place.   No exceptions for Obama campaign contributors, cronies, unions, etc.   Let them all suffer under it.

Remember, this 'train wreck' is ENTIRELY the fault of the democrats.   Vote against EVERY democrat in every election, until it is repealed!

If don't like your congressman or senator, you DON'T have to keep them.   Do not vote for any democrat until this repealed!
Jan 2, 2014 1:58PM

There are still way more people that had their insurance cancelled, than signed up for Obama-Don't Care, for a huge net loss in the number of insured Americans. 


That worked out well didn't it?

Jan 2, 2014 1:35PM
Jan 2, 2014 1:54PM

So, how do people that can't afford the premiums and get susidies pay the high deductables?

Answer: They cant and will just go to the emergency room and not pay the bill.

Jan 2, 2014 2:06PM
what a cluster this law is,  brought to you by a clueless president , passed by a group of pandering liberal congressmen and senators put in power by a group of lazy greedy bums looking for handouts.  basically all democrats and liberals   . next time you vote people  please remember who has taken away the healthcare you liked, your freedoms and wh is spying on everything you do.   there is a better way, rght now that would be anything else other than these idiots
Jan 2, 2014 2:04PM

What troubles me about Obamacare is that it was passed without bi-partisan support, support that is vital, given the fact that the legislation significantly affects millions of Americans, and a substantial chunk of our economy. Couple that with the lies that were told to the American people in order to facilitate passage of the law, lies that resulted in a breakdown of trust in the current administration, and we had a recipe for disaster brewing even before the failed rollout began.

Expect the trend of Obamacare failures to continue in '14, with the few "moderate" Democrats left in the party jumping ship, and swimming as hard as the can from this flawed law, to avoid the backlash they will almost surely face for supporting it in the first place. 


Jan 2, 2014 1:54PM
The comedy of errors continue. Sit back and watch the meltdown!
Jan 2, 2014 2:12PM
Just another tax on the successful to pay for the unsuccessful. By the way did anyone tell Obama, Harry and Nancy the government can't afford to pay for the subsidies they are 17 trillion in debt.
Jan 2, 2014 2:24PM
'obamacare faces next hurdles'..........the american public.
Jan 2, 2014 1:56PM
i don,t think they thought this through very well because of my pre-conditions my monthly cost for insurance with my husband is gonna be 800.00 a month. they can not turn us down but they can sure make us pay I don,t think that is affortable I work part time and only make 7.25 an hour
Jan 2, 2014 2:19PM
Uggghhh! three more years of this usless and harmful president.
Jan 2, 2014 2:28PM
You need read nothing else, except this:

A high proportion of people signing up for new plans are older or have existing health problems -- and not enough younger, healthier people may be joining the plans to balance them out and make the plans profitable.

Jan 2, 2014 1:50PM
Hey Obama, Legislators, and Judicial bums that don't think this is UN-Constitutional.

FACA me, FACA you!
Jan 2, 2014 2:13PM
Obamacare will be nothing but a big series of hurdles, as long as it exists.  This isn't news.
Jan 2, 2014 2:25PM

This health insurance plan was created to ruin the privatized insurance coverage and make all of us peons cow-tow to the government while the rich will get the high class insurance coverage???

Rob Emanuel, the socialist pig, has himself let the cat out of the bag, that they want a two tiered system.  One for those that can still afford to see "THEIR DOCTORS IF THEY PAY MORE!" and the rest of us sheets.... who can live with the crappy doctors who will be piss poor enough doctors to see the peon class!!!!!!!!!!!!!!!!!!!!!!!

The leftist of the world act like they want equality for ALL, but come out with the truth once it is too lated because the youth who are so idiotic that they believed those aresholes!  But the statement "What Obama meant was you could keep your Dr. if you can afford to pay more!" gives the game away!

The rich will get grade A health care and the rest can go see the town drunk to get their health care!!

What a great equalizer this idiot-liar-in-chief is...... 

Jan 2, 2014 2:40PM
ACA didn't make Obama a failure, but rather confirmed it! 
Jan 2, 2014 2:55PM
Let the rationing begin.

The young aren't signing up.

People losing their insurance outnumbers those signing up for it.

More are signing up for subsidized (Free) insurance than are paying.

What a dumb idea, and you Democrats own it!

2016 End of an Error
Jan 2, 2014 2:39PM
Three times as many people lost their medical plan than the number of people that signed up for Obamacare. Another Obama lie to force the people who lost their insurance to sign up for Obamacare. Simple! Complete government control of your healthcare and he's not done yet. Wake up America!
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
100 character limit
Are you sure you want to delete this comment?


Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.


Smart Spending brings you the best money-saving tips from MSN Money and the rest of the Web. Join the conversation on Facebook and follow us on Twitter.