Government shutdown won't halt ACA's insurance exchanges

Despite the U.S. government’s entering a partial shutdown, the Affordable Care Act — complete with insurance exchanges open for enrollment as of Tuesday — will roll out as planned, though experts say its introduction won’t be without glitches.

Intense media speculation over the budget brinkmanship and Republicans’ efforts to stall or dismantle the ACA, including a 21-hour filibuster from Sen. Ted Cruz, R-Texas, have failed to derail plans for the new health-insurance marketplaces.

“Despite the shutdown, the new health-insurance marketplace opens for business as planned on October 1. #GetCovered,” President Barack Obama tweeted just minutes after a midnight deadline to avert the shutdown passed.

Earlier, the Department of Health and Human Services (HHS) likewise indicated that whatever happened in Congress, the ACA would proceed.

“Because most ACA spending is from mandatory funding or from funds not affected by a lapse in appropriations and because contracts support the call center and website, we expect minimal, if any, impact,” Bill Hall, a spokesman for HHS, told Al Jazeera in an email. “The marketplaces will be open for business (Tuesday), and people will be able to sign up.” 

In fact, much like Social Security and Medicare payments, experts say the funding for setting up statewide insurance marketplaces — both state and federally run — has already been handed out and therefore is not reliant on the federal government’s staying open. That funding includes health-insurance subsidies for enrollees earning 100 to 400 percent of the federal poverty level.

“Glitches aside, the critical components are going to keep working, even in the event of a government shutdown,” said Caroline Pearson, vice president of Washington-based health care consulting firm Avalere Health.

The only potential exception she heard of is the federal data hub that links to the Internal Revenue Service, the Social Security Administration and other agencies in order to verify patients’ eligibility for enrollment in insurance plans, Medicaid and other insurance subsidies. "But it's hard to know," she said.

That means that as of 8 a.m. Tuesday, millions of Americans who don’t have health insurance through their employers and who can’t afford to buy it on their own can compare various options for private health insurance through 14 state-run and 36 federally operated insurance marketplaces, eligible people can apply for Medicaid coverage in states that have opted to accept federal funding for Medicaid expansion.

People with existing health conditions cannot be rejected for insurance coverage, and applicants have from Oct. 1 to Dec. 15 to enroll for coverage that begins Jan. 1, 2014. The Obama administration is allowing a six-month grace period for 2014 enrollment, so people have until the end of March 2014 to sign up.

But the new health care exchanges could get off to a bumpy start. Several states have reported technical problems with major aspects of enrollment that won’t be fixed for another few weeks. For example, the Washington, D.C., health care exchange won’t immediately be able to determine online if applicants are eligible for Medicaid or tax subsidies. Instead, people seeking those benefits can enroll through a trained assistant or apply online and wait a few weeks to receive confirmation of eligibility.

Colorado is experiencing the same problem, and Oregon is requiring enrollees to sign up with trained insurance brokers for the next few weeks rather than online because of tech glitches.

In addition, a Spanish-language website that explains the health-insurance exchanges, CuidadoDeSalud.com, won’t be ready for another few weeks, nor will enrollment for small-business insurance marketplaces, in which companies with 50 or fewer employees can sign up for private health-insurance plans.

Those are just some of the delays disclosed before Tuesday’s launch.

But health-insurance experts say a few extra weeks shouldn’t matter, since consumers still have months to shop for the right plan and figure out what’s available. And because people procrastinate, not very many are going to sign up on Oct. 1, anyway, it has been suggested.

On Tuesday “there’s going to be very, very, very little enrollment, no matter how good everything is,” says Jon Kingsdale, a managing director at Boston-based Wakely Consulting Group who advised several of the states that created health care exchanges.

He says people won’t want to plunk down the cash for insurance as early as October, and they’ll likely wait until at least November to pay for January coverage, “which is, frankly, good news for the start of a lot of exchanges, because they will be using October to hopefully complete their systems’ testing and development.”

Indeed, health-insurance advocates say they’d rather the states that are experiencing troubles wait a few weeks before launching instead of sticking to a hard and fast Oct. 1 launch.

“I’d much rather the Spanish-language version be done right rather than rushed out. It’s just a couple of more weeks,” said Adolph Falcón, senior vice president of the National Alliance for Hispanic Health. “I’m actually pleased that they’re taking the time to makes sure it’s done right.”

Ann Gonzales, spokeswoman for California Covered, the insurance marketplace run by the state, says her office has been working around the clock to make sure the technical aspects of online enrollment as well as community outreach and assistance to help people sign up are all in place. “We have a lot of bleary-eyed people walking around here,” she said in a telephone interview. 

Still, she says, “we are not expecting a huge turnout during the first few days.” Rather, she anticipates enrollees will take their time to evaluate their options.

The bigger problem is whether uninsured Americans who are eligible for subsidized coverage are even aware that the marketplaces are being launched.

A survey conducted by the Kaiser Family Foundation found that among more than 1,500 adults interviewed in September — just weeks before the exchanges were set to open — only 12 percent of uninsured people and 15 percent overall were able to correctly answer that the health-insurance marketplaces open Oct. 1.

What’s more, states like California, Oregon and Colorado that opted to create and run their own marketplaces were granted far more federal funding for advertising and enrollment advocacy than the 33 states that opted to allow the federal government to run their exchanges for them.

That’s because in writing the ACA, the federal government did not anticipate that so many states would pass on creating marketplaces, says Kingsdale, who also served as executive director of the Commonwealth Health Insurance Connector Authority, the agency in Massachusetts that led the state’s 2006 health-insurance reform.

“There’s a tremendous challenge in reaching the uninsured, getting their attention and explaining (the exchanges to them),” he said. Well-funded and well-managed state-run exchanges probably have an advantage over federally run exchanges, which will have to pick and choose areas like Miami and Houston, which have high proportions of uninsured people, to focus on.

In fact, a September poll from Pew Research Center and USA Today found that people living in states that have created their own exchanges are far more aware they exist than people living in states with federally run exchanges.

The Obama administration did, however, award an additional $54 million in grants in April to community groups in states with federally run marketplaces, to be used for advocacy and education about the exchanges.

But the other big wrench in the ACA’s rollout is that uninsured adults who aren’t poor enough to qualify for Medicaid yet fall below income levels that would qualify them for subsidized care through the ACA will basically be turned away in states that opted to forgo federal funding to expand Medicaid coverage, a choice that was allowed by the 2010 Supreme Court ruling on the ACA.

“For states that don’t expand Medicaid and are going to have that coverage gap, there is going to be a whole host of people that will try to get coverage and get turned away. They won’t have any options, really, except for trying to buy it on their own,” which they likely can’t afford, said Sarah Dash, a research fellow at the Center for Health Insurance Reforms at Georgetown University’s Health Policy Institute.

She added, “It’s just important to remember there’s this elephant in the room, and until more progress happens on that front, you’re still going to get people who are turned away, and the door is just closed to them.”