Administration will give some consumers more time to buy, pay for health insurance

The Fix's Chris Cillizza and The Wonkblog's Sarah Kliff break down President Obama's job approval ratings and his health care law's enrollment numbers, side by side. (Polling data: Pew Research Center. Enrollment data: Centers for Medicaid and Medicaid Services.) (Katherine Musselwhite/In Play/The Washington Post)
December 12, 2013

The Obama administration announced Thursday it will give some Americans more time to buy health plans through the federal insurance marketplace and urged the insurance industry to make it easier for consumers to make the transition to the new coverage.

The revisions come as a Dec. 23 enrollment deadline looms for people who want insurance that begins Jan. 1. Health and Human Services Secretary Kathleen Sebelius did not extend that deadline Thursday, but for the first time directed insurers to give consumers until Dec. 31 to pay.

Officials also asked insurers to accommodate customers in other ways, but it will be up to each company whether to go along. Sebelius urged insurers to begin providing coverage at the beginning of the year to customers who pay just part of their first month’s premium or pay in January.

Administration officials previously had moved the enrollment deadline back eight days, from Dec. 15 to Dec. 23.

Since Dec. 1, administration officials have been emphasizing that most of the severe problems at HealthCare.gov have been cleared up and have been encouraging consumers to go online and enroll. But the changes outlined Thursday are a tacit acknowledgment that even though enrollment has accelerated, not everyone who needs coverage is getting it quickly enough.

The group getting the most explicit guarantee of extra time to sign up is a small but especially vulnerable group of Americans: those who now have insurance through special “high-risk” pools for people so unhealthy they were rejected by regular insurers.

The Pre-Existing Condition Insurance Plan, created by the 2010 Affordable Care Act, was designed to serve as a temporary bridge until January, when the law requires insurers to accept all applicants, even those with medical conditions. Because that program, which covers about 85,000 people, is about to end, patients needed to get new insurance by Jan. 1, and some have been struggling to do so. On Thursday, the administration said they would allow people to stay in the high-risk program until the end of January, giving them an extra month to find alternative insurance.

For other Americans trying to buy coverage, the administration has held out the possibility of more time but has not provided a guarantee. Health officials, in a telephone call with reporters, said a federal rule allows consumers to ask for a special enrollment period if they are hindered in choosing a health plan on the online marketplace by a “system error.”

Health officials have not decided, however, exactly how people would be able to request such extra time, whether they need to ask before the Dec. 23 deadline, and the precise circumstances under which HHS would grant an extension.

In their announcement Thursday, officials asked the insurance industry to accommodate consumers in a variety of ways. For one thing, they encouraged insurers to let people sign up later than Dec. 23 and still begin coverage Jan. 1.

The new federal marketplace, and separate ones run by 14 states and the District, were intended mainly for people who have been uninsured. But they also are attracting millions of Americans who previously bought individual policies that are now being canceled.

With those people in mind, officials encouraged insurers to let patients keep their current doctors and medicines through the end of January without charging them extra, even if they are not included in the new health plans’ preferred-doctor lists or drug formularies.

The insurance industry’s main trade group, America’s Health Insurance Plans, did not address the specifics of the administration’s request. Karen Ignagni, president of the group, said, “Health plans will do everything they can to protect consumers from potential coverage disruptions caused by the ongoing technical problems with HealthCare.gov. With only weeks to go before coverage begins, continued changes to the rules and guidance could exacerbate the challenges associated with helping consumers through the enrollment process.”

Timothy Jost, a professor and health policy specialist at Washington and Lee University, said the administration’s requests were in line with rules that some states have adopted to try to promote a smooth transition when people switch insurance. Still, Jost said, the requests place more strains on insurance carriers already under financial pressure to enroll enough people, especially healthy people, in the new health plans. And he said the idea of giving people coverage for which they haven’t yet paid is “a real risk for insurers.”

Caroline Pearson, vice president for health reform at the consulting firm Avalere Health, said the steps announced Thursday imply that administration officials “have realized that there is a political problem with gaps in coverage. . . . They are trying to walk this line of being as accommodating as possible [to consumers] but not setting unrealistic rules for the [health] plans.”

The law requires most Americans to have health insurance or to risk a fine. The insurance requirement takes effect Jan. 1, but as a practical matter fines would not be meted out unless someone lacks coverage for three months in a row. Administration officials have said that anyone who signs up for a health plan by the end of March will not be penalized.

Even though HealthCare.gov has been working better since the start of the month, there are still reasons why people may be having trouble getting coverage. One significant reason is that the federal marketplace has accumulated a backlog of 50,000 to 60,000 paper applications as cracks have appeared in that low-tech method offered this fall as a backup plan, according to government officials.

Federal health officials and workers at an outside contractor hired to handle those applications have been racing to try to eliminate the backlog by the Dec. 23 enrollment deadline. The backlog accounts for nearly one-third of about 170,000 paper applications that people have submitted since the marketplace opened in October, the officials said.

No one knows how many of the consumers who sent in a paper application have chosen a health plan online now that the Web site is working better. As a result, health officials are trying to work through the entire backlog, but it is unclear how completely or how quickly they can address it. The effort was hindered when a computer portal on which the contractor relies went down for three days in the past week, according to an individual with knowledge of the system who spoke on the condition of anonymity about information that has not been made public.

This fall, federal officials recommended paper applications as a Plan B while HealthCare.gov was being repaired.

Consumers cannot rely on paper applications to complete enrollment in a health plan. Instead, the applications are supposed to handle the important step of determining whether a consumer qualifies for a federal subsidy to pay for a private health plan or qualifies for a public program for people with lower incomes, such as Medicaid or the Children’s Health Insurance Program.

According to Julie Bataille, director of the Office of Communications in the federal Centers for Medicare and Medicaid Services, the branch of HHS overseeing the insurance exchange, all the paper applications have been reviewed, at least preliminarily.

She and the other individual familiar with the system said that some of the 50,000 to 60,000 applications have not been completed because consumers did not provide all the required information, and workers from the outside company, Serco, have been unable to reach them by phone to fill in the blanks.

In other instances, paper applications were placed on hold until last week because parts of the online system needed to answer eligibility questions were not working well enough.

In still other cases, Serco workers ran into one of various computer errors when they tried to process a paper application, and that error has not been corrected.

Besides the applications in the backlog, there are roughly 100,000 paper applications that have been processed, but the consumer was not told of the results until recently. The applicants are supposed to be mailed notification letters, but none went out until recently and the vast majority still have not. As a result, officials said, Serco workers last week tried calling the roughly 100,000 people to inform them of the eligibility decision and urge them to go online to sign up. It is not clear how many they were able to reach. The rest of the people who filed paper applications are being called as well.

Bataille emphasized that people who send in paper applications do not go to the back of the line and that they can expect their eligibility to be determined in three to five days. Nonetheless, officials began last week to issue warnings to various groups trying to help Americans sign up for coverage through the federal system, advising them to stop using paper applications because too little time remains before the Dec. 23 deadline.

Sarah Kliff, Lena H. Sun and Sandhya Somashekhar contributed to this report.

Amy Goldstein is a national reporter for The Washington Post, focus on health-care policy.
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