Wonkbook: Insurers will spend more than $500 million to get people to sign up for Obamacare

December 16, 2013

Welcome to Wonkbook, Ezra Klein and Evan Soltas's morning policy news primer. To subscribe by e-mail, click here. Send comments, criticism, or ideas to Wonkbook at Gmail dot com. To read more by Ezra and his team, go to Wonkblog.

(Photo by Jon Elswick/AP)
(Photo by Jon Elswick/AP)

In all of 2012, health insurers spent $216 million advertising on local television stations. But that's nothing compared to what they're about to spend. According to trade association TVB, insurers will spend more than $500 million on local television ads in 2014. And that's to say nothing of cable television ads and social media campaigns.

Insurers look at these next few years as a gold rush. Tens of millions of people will be buying private insurance of the exchanges. It's a swarm of customers like nothing they've ever seen. And they plan to capture them — even if they need to spend hundreds of millions of dollars to do so.

The Wall Street Journal reports that WellPoint has been holding off "on a planned campaign as problems with the website made it impossible for many consumers to sign up." But now that HealthCare.Gov is more or less working the insurance giant plans to spend $100 million by the end of the year.

These ads aren't just a boon to local television stations. They're a boon to the new health law which'll be promoted in a sustained ad campaign that rivals the presidential election in size and scale. The ads won't be specifically about Obamacare, of course — they're about brand building for WellPoint and Cigna and others insurers — but many of the ads will tell consumers where they can go to buy this wonderful product they've just heard such glowing things about. Many of the ads will capture the eye of someone who knows they need to buy insurance before tax time but hasn't quite gotten around to doing it. And then it will direct them to their local exchange, or at least to their insurer's Web site.

The fact that the insurers are launching their campaigns is also independent confirmation that HealthCare.Gov is rapidly improving. major insurers are virtually the only group aside from the federal government that has real visibility into the functioning of Obamacare's digital architecture. They know what the pace of enrollment looks like, and how many 834s are being correctly generated, and whether angry customers are calling their help lines. They know there are still problems even if the Obama administration is downplaying them. But if they think the system is sound enough to begin driving people to it that's good evidence that the improvements are real.

Wonkbook's Number of the Day: 15,000.  According to an early tally, that's the number of purchase records for shoppers at Healthcare.gov that were not transmitted to insurers. HHS says the bug is now fixed and fewer than one percent of purchase records don't make it to the insurer.

Wonkbook's Graph of the Day: China coal plant emissions according to their health impact.

Wonkbook's Top 5 Stories: (1) looking towards Obamacare next year; (2) Ryan-Murray to get roughed up in the Senate; (3) the Fed is actually thinking about a December taper; (4) one year after Newtown; and (5) NSA reform panel advice already ignored.

1. Top story: How much progress can Obamacare make in 2014?

Thousands of HealthCare.gov sign-ups didn’t make it to insurers. "Enrollment records for close to 15,000 HealthCare.gov shoppers were not initially transmitted to the insurance plans they selected, according to a preliminary federal estimate released Saturday. While these cases pose a challenge for the Obama administration, officials say they believe the situation is improving. Since early December, fewer than 1 percent of HealthCare.gov enrollments did not make their way to health insurance plans...The preliminary estimate that fewer than 15,000 enrollments failed to reach carriers comes from a recently completed federal analysis that compared the number of shoppers who clicked "enroll" with the number of digital files HealthCare.gov fired off to health-insurance plans...The federal government does not have a list of people whose sign-up forms were never sent to their insurer." Sarah Kliff in The Washington Post.

Health insurers are cranking up ad spending, a sign that they believe Obamacare may be ready to work. "[W]ith website access improving and the initial deadline to sign up for coverage looming Dec. 23, insurers are starting to blanket the airwaves and social media with glitzy ads urging consumers to buy their plans. WellPoint Inc. —which has held off for weeks on a planned campaign as problems with the website made it impossible for many consumers to sign up— said it expects to spend up to $100 million by the end of this year on TV, social media and print ads targeting mostly young and healthy people...Insurers such as WellPoint are capitalizing on an unprecedented opportunity in a shifting health-care market. Some seven million Americans are expected to buy health coverage on the new consumer exchanges, where people can compare insurance plans side by side...The ad campaigns are a major shift in strategy for health insurers, most of whom have never really had to market directly to consumers aggressively until now. Most in the past sold plans to companies and human-resource directors for their workforces." Timothy W. Martin in The Wall Street Journal.

@PaulPage: CNBC making the link between #Sharknado and Obamacare. Kind of jumping the shark.

How much progress has there been, exactly, on Healthcare.gov? "Insurers said that they had found many discrepancies and errors and that the government was overstating the improvements in HealthCare.gov. In some instances, they said, the federal government reported that the home address for a new policyholder was outside an insurer’s service area. In other cases, a child was listed as the main subscriber — the person responsible for paying premiums — and parents were listed as dependents. In some cases, children were enrolled in a policy by the federal government and parents were left off, or vice versa. In other cases, the government mixed up the members of a family: A child or spouse was listed two or three times in the same application in late November. Such errors can have financial implications, increasing the amount of premiums that a family is required to pay." Robert Pear in The New York Times.

Debate: Can drug companies’ influence over treatments for medical conditions like A.D.H.D. be reducedThe New York Times.

White House delayed enacting Obamacare rules, and others, ahead of 2012 election to avoid controversy. "Several key regulations did not come out until after the 2012 election, including one defining what constitutes “essential health benefits” under a health plan and which Americans could qualify for federal subsidies if they opted to enroll in a state or a federal marketplace plan. The latter focused on what constitutes “affordable.”...The Treasury Department held the proposal back while finalizing all the other tax-credit rules on May 23, 2012. Treasury officials later told those working on the regulation that it could not be published before the election." Juliet Eilperin in The Washington Post.

Insured people don't like Obamacare. "People with health insurance are unhappy with the rollout of ObamaCare, and many of them blame the law for changes in their policies, according to a new Associated Press-GfK poll...Nearly half of those who already had coverage through their employer or the private market said their policies would be changing in 2014; 69 percent said they would be paying higher premiums, while nearly three in five said they would face heftier deductibles or copayments." Russell Berman in The Hill.

BAKER: Just blame it all on Obamacare, wouldya? "The healthy are subsidizing the sick. Insurance companies are tightening access to doctors. Plans with low premiums have high deductibles. Sometimes it rains, Nickelback is still a band, and people continue to die literally every day. But just because something is happening and Obamacare exists doesn't mean it's happening because Obamacare exists—even in health care. Don't tell that to the law's critics: The Affordable Care Act has become the go-to scapegoat for just about everything people don't like about health care, if not in the economy overall. The law is being blamed for trends, economic incentives, and basic realities that it did not create and that were part of the health care system long before President Obama was even elected. There's not a big difference between "how Obamacare works" and "how health insurance works"—and that, health experts said, is what makes the law such a convenient target." Sam Baker in NationalJournal.

@morningmoneyben: Last night's perfect fluffy snow gives way to this morning's heavy, slushy mess. All because of Obamacare

BOSKIN: Obamacare's troubles are just beginning. "The next shock will come when the scores of millions outside the individual market—people who are covered by employers, in union plans, or on Medicare and Medicaid—experience the downsides of ObamaCare. There will be longer waits for hospital visits, doctors' appointments and specialist treatment, as more people crowd fewer providers...More IT failures are likely...Be prepared for eligibility, coverage gap, billing, claims, insurer payment and patient information-protection debacles." Michael J. Boskin in The Wall Street Journal.

RAMPELL: Solving the shortage in primary-care doctors. "It turns out that the real bottleneck is at the post-med-school step: residencies, those supervised, intensive, hazing-like, on-the-job training programs that doctors are required to go through before they can practice on their own. There has been little growth in residency slots; they totaled 113,000 in 2011-12, from 96,000 a decade earlier. Exactly why residencies have not increased faster is a subject of great debate in the health care industry. Hospitals, doctors and med students usually give the same explanation: Congress is too stingy." Catherine Rampell in The New York Times.

Music recommendations interlude: The Band, "It Makes No Difference," 1983.

Top opinion

SUMMERS: Why secular stagnation is a threat. "[E]ven though financial repair had largely taken place four years ago, recovery has only kept up with population growth and normal productivity growth in the US, and has been worse elsewhere in the industrial world. Second, manifestly unsustainable bubbles and loosening of credit standards during the middle of the past decade, along with very easy money, were sufficient to drive only moderate economic growth. Third, short-term interest rates are severely constrained by the zero lower bound: real rates may not be able to fall far enough to spur enough investment to lead to full employment." Lawrence H. Summers in The Financial Times.

KRUGMAN: Why inequality matters. "The best argument for putting inequality on the back burner is the depressed state of the economy. Isn’t it more important to restore economic growth than to worry about how the gains from growth are distributed? Well, no. First of all, even if you look only at the direct impact of rising inequality on middle-class Americans, it is indeed a very big deal. Beyond that, inequality probably played an important role in creating our economic mess, and has played a crucial role in our failure to clean it up." Paul Krugman in The New York Times.

KRISTOF: The killer who supports gun control. "“I do take responsibility for the murder; I’m sorry for taking his life, and all the life he could have had,” Lennon writes in an essay that he sent me out of the blue and that I’ve published on my blog. “But without a gun, I would not have killed.” Lennon says that only “that perfect killing machine” of a gun assured that the murder would succeed. “Could I have stabbed him?” he adds. “Strangled him? Bludgeoned him? If I had done so and he hadn’t died, why would that have made me less culpable than I am now, a man who swiftly and cowardly shot another man to death? A killer nonetheless, I hash these things out, in my head, in my cell, in Attica serving 28 years to life.”" Nicholas D. Kristof in The New York Times.

TANDEN: What the 'centrists' really want. "[I]t was so surprising that the day before Obama’s speech hosted by the Center for American Progress, Third Way’s Jon Cowan and Jim Kessler declared economic populism “a dead end for Democrats.” They argue that messages about income inequality are overly idealistic and claim that the progressive economic agenda doesn’t excite voters outside of midnight blue districts. Of course, they ignore that it was a populist message about reducing inequality that won Obama reelection just over a year ago." Neera Tanden in The New Republic.

KONCZAL: Corporatism as smear. "Behind every current right-wing invocation of corporatism is the assumption that the market would work perfectly fine if the government simply just got out of the way. Corporatism goes beyond invocations of corruptions. Whatever problems exist, it must exist as a result of the government existing and trying to do something. This vision of laissez-faire assumes a free-floating market system, one whose logic is dangerous to challenge." Mike Konczal in The New Republic.

Opinion interview: Why Tom Scocca thinks a culture of positivity helps the powerful. Dylan Matthews in The Washington Post.

BROOKS: A formula for happiness. "After 40 years of research, they attribute happiness to three major sources: genes, events and values...About half of happiness is genetically determined. Up to an additional 40 percent comes from the things that have occurred in our recent past — but that won’t last very long. That leaves just about 12 percent. That might not sound like much, but the good news is that we can bring that 12 percent under our control. It turns out that choosing to pursue four basic values of faith, family, community and work is the surest path to happiness." Arthur C. Brooks in The New York Times.

POLLACK: How can we help Dasani's family? "With equal justice, this story might be told as an account of the ways that troubled parents damage the lives of their children. The adults in Dasani’s life face a myriad of challenges involving substance abuse and various scrapes with the law. Chanel and Supreme are overwhelmed. They’ve have way too many children with each other and with others. They seem inches away from losing their children, miles away from being able to hold a job or being able to manage daily parenting challenges...This is also a story of apparent incompetence and mismanagement that allows the facilities at Auburn Family Residence to be so substandard." Harold Pollack in The Washington Post.

Editorial video: How can we make sure that American gifted students keep up with gifted students in the rest of the worldThe New York Times Editorial Board.

BEUTLER: Why Boehner won't really ditch the far right. "I don’t want to suggest that Boehner’s eruption at these hard-line groups was a non-event. It was clearly a big departure for him, at least temperamentally. But Boehner’s not a Democrat and he’s not a liberal. It remains true that the biggest differences on the right are strategic, not substantive. And I think the poisonous environment in the conservative movement — and specifically the bad blood between GOP leaders and groups like Heritage Action — has obscured the fact that in many instances the two factions’ incentives still align." Brian Beutler in Salon.

In memoriam interlude: Peter O'Toole.

2. Ryan-Murray to get roughed up the Senate

The budget could have a messy time getting through the Senate. "[H]ope masks a deeply divided Senate, where ill will over recent rule changes has heightened a bitter partisan divide. As the Senate prepares to take up the budget deal this week, both sides say it is likely to be one of the final pieces of significant legislation to pass the 113th Congress as midterm elections loom...Democrats are still trying to come up with the 60 votes necessary to break a GOP-led filibuster in the Senate. On Friday, several key Republicans signaled that they would vote to end debate. That list included Sens. John McCain (Ariz), Jeff Flake (Ariz.), Susan Collins (Maine) and Richard Burr (N.C.). Several others, including Sens. Johnny Isakson (Ga.), Saxby Chambliss (Ga.), Lisa Murkowski (Alaska) and Bob Corker (Tenn.), have indicated that they may vote for cloture." Reid Wilson in The Washington Post.

Watch the Senate's Appropriations Committee. "[I]nside the Senate committee, Tuesday’s cloture vote may be less about the budget deal than internal Republican politics over who gets chairmanships if the GOP were to regain the Senate in the 2014 elections...By opposing cloture, [Sen. Richard] Shelby may help himself become chairman, perhaps. But if he kills the deal, what will be left of the committee when he gets the gavel?" David Rogers in Politico.

The Senate might want to make some changes here, here and here. "A wild card in rounding up GOP support was a last-minute element of the deal that would wring savings from benefits for veterans, a politically powerful constituency, especially among Republicans. The deal, crafted by Sen. Patty Murray (D., Wash.) and Rep. Paul Ryan (R., Wis.), includes a proposal to save $6 billion over ten years by slowing the growth of pension benefits for working-age military retirees." Janet Hook in The Wall Street Journal.

The budget fight deepened fissures within the Republican Party. "While Speaker John A. Boehner was harsh in his public criticism of conservative advocacy groups opposed to a new bipartisan budget deal, his attack on the organizations was even more pointed when he was behind closed doors...In addition, some congressional leaders are no longer willing to remain silent to avoid antagonizing important political partners. They have seen a clear downside to the rising influence of outside conservative organizations that promote divisive primary fights, producing flawed candidates who lose winnable seats to Democrats...Just as important, Mr. McConnell does not want to regain the majority only to find himself surrounded by conservative firebrands like Representative Steve Stockman." Carl Hulse in The New York Times.

...But is this just one more spat, or is it something more? "Boehner’s comments did not trigger a Republican civil war, as some have suggested. The reality is that the internal conflict has been underway for years. Mitt Romney’s loss to President Obama in the 2012 election intensified the debate, and those tensions will be front and center as the GOP heads toward a divisive round of primary elections next year and then a potential battle royal when it picks a presidential nominee in 2016." Dan Balz in The Washington Post.

...It's clear that business interests are going to back Boehner against the hard right all the way. "Business lobbyists are pumping their fists over Speaker John Boehner’s (R-Ohio) slap-down of conservative groups. Executives at trade groups told The Hill they were pleasantly surprised by the strident remarks this week from the typically laid-back Speaker." Kevin Bogardus in The Hill.

Hill insider will direct Obama’s legislative strategy. "President Obama announced Friday that he has tapped White House aide Katie Beirne Fallon, a veteran Capitol Hill insider, to help steer his legislative strategy on immigration and health care and to advance the administration’s climate policies. Fallon, a well-regarded policy and political strategist with deep relationships with Democratic lawmakers, will take over as White House director of legislative affairs. She replaces Miguel Rodriguez, a lawyer and former foreign policy aide who was relatively unknown among congressional leaders." Juliet Eilperin and Philip Rucker in The Washington Post.

And just in case you thought we were home free: Ryan signals new fight on debt limit. "Rep. Paul Ryan (R-Wis.) on Sunday said Republicans will insist on more concessions for raising the debt limit in early 2014, indicating that the fiscal ceasefire he brokered in a budget deal may not last long. “We don’t want nothing out of this debt limit,” Ryan said on “Fox News Sunday.” “We are going to decide what it is we can accomplish out of this debt-limit fight.”" Russell Berman in The Hill.

Disturbing reportage (seriously: we're warning you) interlude: Rolling Stone's latest on animal cruelty.

3. The Fed is actually thinking about a December taper

Tough question for the Fed: Is it time to act? "Federal Reserve officials face a delicate decision at their policy meeting this week, with stronger economic figures and a Washington budget deal adding fuel to the debate over whether to pull back on their signature bond-buying program. Fed Chairman Ben Bernanke in June set out a three-part test—based on employment, growth and inflation—for reducing the $85 billion in monthly bond buys. He said the Fed's policy committee wants to see progress in the job market, supported by improving economic activity and an inflation rate rising toward its 2% target...Recent data show progress on the first two criteria, but not on the third." Pedro da Costa and Jon Hilsenrath in The Wall Street Journal.

Let's ask the economists. "One-fourth of the economists see the central bank announcing an initial pullback at the Fed's policy meeting next Tuesday and Wednesday. One-third expect the Fed to wait until late January. Just over one-third see the Fed holding off until its March meeting, while two economists expect the first cut to come after March...About half—49%—said the Fed should announce an initial pullback. Slightly fewer—46%—said it should wait until the first quarter." Sudeep Reddy in The Wall Street Journal.

Explainer: Economic data coming your way this weekAmrita Jayakumar in The Washington Post.

Companies turning again to stock buybacks to reward shareholders. "This is what U.S. multinationals do now with their cash. Rather than tout big new investments, raise worker wages or hire more employees, companies are more likely to set aside funds to reward shareholders — a trend that took a dip during the recession but has roared back during the recovery...[W]hen companies spend money on buybacks rather than investment, they’re signaling low hopes for economic growth." Jia Lynn Yang in The Washington Post.

Who knew the Tea Party would oppose trade pacts? "Twenty years after the landmark Nafta deal linking the U.S., Canada and Mexico, the rise of a vocal conservative contingent with antitrade views adds another hazard in the intricate politics of trade, just as Washington is pushing two major pacts, one with Asian-Pacific countries and another with Europe...Among liberals, there is concern that the agreements could loosen environmental and consumer regulations for multinational corporations. Many conservatives worry multinational dispute-resolution systems would take important decisions out of the hands of the U.S. government." William Maudlin in The Wall Street Journal.

T-Mobile and Sprint want to merge. "[A]merger between the two smallest players is different from one between a market leader and an underdog, right? That's what Sprint's been arguing for a few months, at least: Buying T-Mobile would give it 53 million subscribers, still a distant third to AT&T's 72 million and Verizon's 95 million, but a platform for more meaningful competition. Also, crucially, it would acquire more of the wireless spectrum that's needed to robust provide coverage over large geographic areas" Lydia DePillis in The Washington Post.

Middle Eastern interlude: What happens when it snows in Saudi Arabia, apparently.

4. One year after Newtown, is gun control hopeless?

Obama marks Newtown anniversary with call for action on gun control. ""We haven’t yet done enough to make our communities and our country safer," Obama said in his weekly address. "We have to do more to keep dangerous people from getting their hands on a gun so easily. We have to do more to heal troubled minds."" Josh Hicks in The Washington Post.

The latest on the shooting at Arapahoe. "Karl Pierson's attack at Arapahoe High School lasted just 80 seconds — enough time to shatter Claire Davis' life and leave hundreds of other classmates in fear for their own. And his intent was far more grave. He rushed into the school Friday with a bandolier of ammunition strapped to his chest. He carried a machete, three Molotov cocktails and the pump-action shotgun that authorities said he bought days before to avenge a grudge he had against his debate coach. "His intent was evil, and his intent was to injure multiple people," Arapahoe County Sheriff Grayson Robinson said Saturday afternoon." Kirk Mitchell, Jeremy Meyer and Sadie Gurman in The Denver Post.

On anniversary of the Sandy Hook shootings, people gather for anti-gun protest at the NRA. "[O]ver the past year, it has become a monthly tradition to protest gun violence in front of the mirrored blue windows of the NRA. On Saturday, the anniversary of the Sandy Hook Elementary School shooting, a small crowd stood in the cold holding signs and small T-shirts with the names and ages of victims...In front of the NRA offices, Lauren Ambrosini said she came because she could not quite believe she lives in a society in which, periodically, she has to ask her preschool and kindergarten students to lie silently on the floor — a drill to prepare for the unthinkable. Administrators help by rattling the doorknobs, as though they are madmen intent on getting in, Ambrosini said. The exercise terrifies the children, she said. “I have little girls asking, ‘Are bad people going to come in here with guns?’ ”" Susan Svrluga in The Washington Post.

Some Colorado sheriffs won't enforce new gun laws. "Colorado’s package of gun laws, enacted this year after mass shootings in Aurora, Colo., and Newtown, Conn., has been hailed as a victory by advocates of gun control. But if Sheriff Cooke and a majority of the other county sheriffs in Colorado offer any indication, the new laws — which mandate background checks for private gun transfers and outlaw magazines over 15 rounds — may prove nearly irrelevant across much of the state’s rural regions. Some sheriffs, like Sheriff Cooke, are refusing to enforce the laws, saying that they are too vague and violate Second Amendment rights. Many more say that enforcement will be “a very low priority,” as several sheriffs put it." Erica Goode in The New York Times.

Mother Earth interlude: Mudslide in Maierato, Calabria, Italy.

5. NSA reform panel's advice already ignored

Obama won't split up cybersecurity role. "President Obama has decided to keep the National Security Agency and the Pentagon’s cyberwarfare branch under the same command despite concerns that it concentrates too much power in the hands of a single military official responsible for both surveillance and directing a growing arsenal of cyberweapons. As a practical matter, the decision means that Mr. Obama must appoint a four-star military officer to succeed Gen. Keith B. Alexander, the first person to simultaneously run the two organizations, when he retires early next year...But that also means the N.S.A. will be run by someone who has spent a career in the military culture, with the mind-set that engenders. Several members of an advisory committee that submitted its report to Mr. Obama on Friday — with what the White House said was a list of 40 recommendations — expressed the view that the two organizations should be split, in part to assure civilian control of the N.S.A." David E. Sanger and Thom Shanker in The New York Times.

U.S. may never know full extent of Snowden leaks. "Investigators remain in the dark about the extent of the data breach partly because the N.S.A. facility in Hawaii where Mr. Snowden worked — unlike other N.S.A. facilities — was not equipped with up-to-date software that allows the spy agency to monitor which corners of its vast computer landscape its employees are navigating at any given time. Six months since the investigation began, officials said Mr. Snowden had further covered his tracks by logging into classified systems using the passwords of other security agency employees, as well as by hacking firewalls installed to limit access to certain parts of the system." Mark Mazzetti and Michael S. Schmidt in The New York Times.

NSA officials consider Edward Snowden amnesty in return for documents. "National Security Agency officials are considering a controversial amnesty that would return Edward Snowden to the United States, in exchange for the extensive document trove the whistleblower took from the agency. An amnesty, which does not have the support of the State Department, would represent a surprising denouement to an international drama that has lasted half a year. It is particularly unexpected from a surveillance agency that has spent months insisting that Snowden’s disclosures have caused vast damage to US national security." Spencer Ackerman in The Guardian.

Reading material interlude: The best sentences Wonkblog read today.

Wonkblog Roundup

The FDA is cracking down on antibiotics on farms. Here’s what you should knowBrad Plumer.

Why Tom Scocca thinks a culture of positivity helps the powerfulDylan Matthews.

How can we help Dasani’s familyHarold Pollack.

T-Mobile and Sprint want to merge. Here’s why you should worryLydia DePillis.

Thousands of HealthCare.gov sign-ups didn’t make it to insurers. Sarah Kliff.

Is there a conservative alternative to financial reformMike Konczal.

Et Cetera

Key longread: The last report in a long-running series on the cost of cutting food stampsEli Saslow in The Washington Post.

Will more direction in courses help freshmen graduate from community collegesCaroline Porter in The Wall Street Journal.

Some Tea Partiers who got kicked out in 2012 are toning themselves down and running againJennifer Steinhauer in The New York Times.

Got tips, additions, or comments? E-mail me.

Wonkbook is produced with help from Michelle Williams.

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Dylan Matthews · December 15, 2013