Correction: In this post, the date by which individuals must sign up for coverage to avoid the individual mandate penalty has been corrected from March 15 to February 15. The post has also been corrected to note that individuals who are uninsured for less than three months, rather than up to three months, are not subject to the penalty.
On October 1, 2013, the federal exchange and most of the state exchanges will open their doors. Or they may not. And if they do, they may not offer full functionality. But if they do not, it will not, as one would think from the media hysteria surrounding the October 1 date, mean that “Obamacare” has failed.
In fact, October 1, 2013, is a wholly arbitrary date picked up the Department of Health and Human Services to launch the exchanges and open enrollment for qualified health plans. It is not a statutory deadline. There are some clear deadlines in the Affordable Care Act. September 23, 2010 was the effective date of the six-month insurance reforms — an end to lifetime limits and rescissions, extension of coverage to young adult children, free preventive services, internal and external review and others. These reforms came off largely on schedule.
January 1, 2014 is another key date — the effective date for the Medicaid expansions, premium tax credits, cost-sharing payments, and individual and employer responsibility requirements. There are also important deadlines established by regulation. Open enrollment for 2014 will end on March 31, 2014. After that date, it will not be possible to sign up for individual coverage for 2014 unless an individual qualifies for a special enrollment period.
The individual responsibility provision will go into effect on January 1, 2014, but an individual will not be penalized as long as he or she is uninsured for less than three months. This means that individuals will have to be insured by March 1 to avoid the penalty, since April 1, the next date on which coverage could begin, would not be less than 3 months from January 1. Individuals who lack other forms of coverage and do not fit within another exemption will have to sign up by February 15, 2014 to be covered by March 1, and completely avoid the mandate penalty. December 15, 2013 is another important date — the last date on which it will be possible to sign up for coverage through the exchanges and be sure that coverage will be available on January 1, 2014, the first date on which qualified health plans covered by premium tax credits will be available.
But October 1 is not an inherently significant date. HHS was charged by the ACA to pick a date on which open enrollment would begin. It picked the October 1 date (as explained in the 2011 exchange proposed rule) “to ensure that qualified individuals have sufficient time to learn about Exchange coverage, compare options, and ultimately enroll” before the January 1, 2014 date. It is also a convenient date as the beginning of the federal fiscal year (under ordinary circumstances) and about the time when employer plans frequently offer open enrollment. But no disaster will occur if the exchanges do not open or are not fully functional, on October 1, 2013.
Some Delays Have Been Announced, But They Do Not Affect Coverage Or Subsidies
In fact, we know that there will be some delays. On September 26, 2013, HHS announced that although small businesses will be able to see available plans and begin signing up for SHOP coverage on October 1, the federal SHOP exchange will not be fully functional until November. SHOP enrollment is not limited to an open enrollment period as is the individual exchange, so this delay should be of even less consequence.
The District of Columbia exchange has announced that although it will be open for enrollment on October 1, it will not be able to determine eligibility for Medicaid and premium tax credits until November. Colorado’s exchange will also open for business on October 1, but applicants will have to go through the exchange’s call center to establish premium credit eligibility until November, when they can apply online. Finally, until late October when they will be able to apply online, applicants in the Oregon exchange will have to enroll through insurance agents or community partners.
But, again, these are not delays in coverage or eligibility for premium tax credits, which will not be available until January 1 in any event. More delays are quite possible, particularly if Congress shuts down the government on October 1 (although, ironically, the exchanges are one government function that may not be shut down).
Glitches have occurred with the Medicare drug benefit and other complex endeavors. Do these glitches mean that Affordable Care Act implementation is on the verge of collapse, or at least not ready for prime time? No. Implementation of complex government programs (or, for that matter, private product launches) often encounters problems. Thirty-seven states had to set up special temporary programs to assist low-income Medicare beneficiaries who could not get coverage because of problems in the launch of the Part-D Medicare drug program in 2006.
The Challenges Involved In Implementing The ACA.
The ACA was designed to preserve our current private health insurance system while making that system work for low-income families and individuals with serious medical conditions — people who have been largely excluded from coverage heretofore. This is a difficult task, made more difficult by the fact that the ACA attempted to enlist the states to take a major role in implementation and spread major implementation responsibilities over three federal departments: Health and Human Services, Labor, and Treasury. Under the best of circumstances, a timely and error-free implementation would have been difficult.
But circumstances have been far from ideal. As has been painfully clear in recent days, the House of Representatives has been adamantly opposed to implementation of the law. This has resulted in the implementing agencies being denied needed implementation funding ever since the law was adopted, forcing them to cobble together what funding they can from other sources. It has also meant that agency leadership has had to spend hundreds of hours preparing for and sitting through meaningless and redundant Congressional hearings that have served only to provide a pulpit for Congressmen to speak against the law. More than two years of litigation further distracted the agencies from their task. Many of the states, which were supposed to implement the law since they are the experts in insurance regulation, have refused to cooperate, even tried to obstruct implementation, making the job that much harder.
The world will not stop if the exchanges are not fully functional on October 1, 2013. Indeed, there will be no serious practical, as opposed to political, consequences if their doors remain shut for a few days beyond that point. In any event, we are unlikely to be able to judge the success of the ACA until at least 2016, by which time qualified health plan enrollment is projected to reach permanent levels. Only then will we know whether the ACA has accomplished its goal of covering uninsured America.