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January 13, 2014

New York Times, Washington Post Finally Report What Everyone Else Has Known for At Least Six Months: Obamacare Has Thrown Insurance Into Chaos, and This is All Just a Prelude to the Next Big Batch of Cancellations

Or, as Obamacare defenders call cancellations followed by roiling chaos: "transitioning."

The New York Times reported (on Saturday, the least-read day of the news week) that the insurance market was in chaos, with insurers not knowing who their supposed insured clients even are. Digested at Hot Air:

In addition to the difficulties many face in proving they have coverage, patients are also having a hard time figuring out whether particular doctors are affiliated with their health insurance plan. Doctors themselves often do not know if they are in the network of providers for plans sold on the exchange.

But interviews with doctors, hospital executives, pharmacists and newly insured people around the country suggest that the biggest challenge so far has been verifying coverage. A surge of enrollments in late December, just before the deadline for coverage to take effect, created backlogs at many state and federal exchanges and insurance companies in processing applications. As a result, many of those who enrolled have yet to receive an insurance card, policy number or bill.

Many are also having trouble reaching exchanges and insurance companies to confirm their enrollment or pay their first month’s premium. Doctors’ offices and pharmacies, too, are spending hours on the phone trying to verify patients’ coverage, sometimes to no avail.

ObamaCare SuperFan Ezra Klein interviewed Obamacare critic and insurance industry executive (i.e., someone who actually knows something) Bob Laszewski and heard similar grim tidings. @benk84 linked this in the morning news dump, but here's some of the more important stuff:

There are two things [insurance companies are doing with the massive pile of botched, error-ridden 834s Obamacare is generating]. There are some obvious errors you get and the insurer can go back to the customer and straighten them out. That’s a very laborious task. The other thing that the administration is doing is a manual reconciliation. There’s unfortunately no computerized check between who HealthCare.Gov thinks is enrolled and who the insurance industry’s computer systems think is enrolled. So it’s being done manually. That’s a big problem.

The other challenge now is getting people to pay for coverage. I was surprised today calling around to people to find only about 50 percent have paid. That’s not a reason to panic yet. The due dates for payment have been sliding all around, so people can be confused. But it can be a mess. Some insurers are doing autocalls like politicians do the night before the election asking people to pay.

Laszewski also says everyone's all but given up on the prospect of getting balanced risk pools in Obamacare:

It’s not positive. I don’t want to say people have given up on the notion they’ll get a good mix. They know the administration will make a big push. The insurance companies will spend big on advertising and outreach. So no one has given up. But it doesn’t look good right now.

There’s a big misconception that this is about young people. That’s baloney. It’s about healthy people. A healthy 20-year-old might only pay a $100 premium. You want healthy 40 and 50-year-olds. The big problem right now is really total enrollment. We only have about 10 percent of the uninsured in here. Insurers think you need more like 70 percent of a pool of people to sign up.

...

The problem with the enrollments today is that they’re so small, it’s less than 10 percent of the uninsured coming in, it really can’t be anything but sick people.

And all that, the Washington Post is surprised to discover, is just a preamble for what's coming. Also digested at
Hot Air:

When millions of health-insurance plans were canceled last fall, the Obama administration tried to be reassuring, saying the terminations affected only the small minority of Americans who bought individual policies.

But according to industry analysts, insurers and state regulators, the disruption will be far greater, potentially affecting millions of people who receive insurance through small employers by the end of 2014.

While some cancellation notices already have gone out, insurers say the bulk of the letters will be sent in October, shortly before the next open-enrollment period begins. The timing — right before the midterm elections — could be difficult for Democrats who are already fending off Republican attacks about the Affordable Care Act and its troubled rollout.

Some of the small-business cancellations are occurring because the policies don’t meet the law’s basic coverage requirements. But many are related only indirectly to the law; insurers are trying to move customers to new plans designed to offset the financial and administrative risks associated with the health-care overhaul. As part of that, they are consolidating their plan offerings to maximize profits and streamline how they manage them.

If you like your plan, you can keep it: Except we've rigged the game such that no one can offer you your previous policies and remain solvent.

The transformation of the small-group market is just one of the many ripple effects of the Affordable Care Act that will reshape the insurance industry in coming years....

I love that: "transformation," "ripple effect." Especially "ripple effect," as if this was not the central intention of the scheme.

The impact of cancellations in the small-group market is expected to be less dramatic than in the individual market, partly because a higher percentage of small-business policies provide more generous benefits. Still, the changes being made by the insurance industry are leaving some small-business owners confused and disillusioned about the law — whether it is directly to blame for the changes or not.

Um, the law is directly responsible, but thanks, WaPo, for making it an allegedly Open Question about what is to blame for this.

Also, the Washington Post is working from Obama's Big Book of Lies in this paragraph -- claiming the new policies are only more expensive because they're "more generous." They're actually less generous. The majority of the premium hike is due to forcing healthy people who buy insurance proactively (i.e., before becoming seriously sick) into a pool with unhealthy people who only attempted to buy it after becoming sick.

Stephen Lohman, owner of Allegheny Plant Services, a trucking company in Pittsburgh, said the Aetna PPO plan he offers his 38 employees will be discontinued at the end of this year. He said he has been offered a new Aetna policy with premiums that are 40 percent higher, and that other insurers’ rates are similar.

“We were very surprised,” he said, adding that it is “important to me personally” to offer insurance to his employees, but he is not sure he can afford the premium increase.

40% higher premiums. Just "ripple effects," you know.


By the way, @benk84 derives his sense of self-worth from the number of followers he has on Twitter.

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