Ready or not, here comes Obamacare
The state and insurers race to smooth glitches before Iowans start using the exchange Oct. 1.
Written by Tony Leys – Des Moines Register, September 14, 2013
STORY CITY, IA. – — David Fairchild and Clara Peterson are pinning their hopes on Obamacare.
The couple, who own a small cleaning service, are in their mid-50s. They pay more than $900 per month for private health insurance, plus thousands of dollars a year in deductibles and co-payments. Until now, they’ve been unable to shop for other policies, because no other insurer would be willing to cover Fairchild’s chronic leukemia without charging even higher premiums.
Starting Oct. 1, they and hundreds of thousands of other Iowans will be able to check out private policies offered on a new, government-run online shopping system.
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Opening of the so-called exchanges will be one of the most dramatic steps in the country’s adoption of the Affordable Care Act, also known as Obamacare. The politically charged law will usher in the biggest change in the nation’s health insurance system since the establishment of Medicare for seniors nearly a half-century ago.
Over the next two years, the law will require nearly all Americans to have health insurance, and large employers to offer it, or pay penalties. But through the exchanges, the law also will help people with low or moderate incomes sign up for public subsidies to help them pay premiums.
See how the law could affect you and review additional videos and stories at DesMoinesRegister.com/AffordableCareAct
Fairchild has heard skeptics criticize the exchanges, also called health insurance marketplaces. Critics predict that the computerized systems will crash; that the people designated to guide consumers through the process will be clueless; that the insurance policies will be too expensive.
The couple will proceed, even if they face some bumps in the process.
“I really don’t see that we have much choice,” Fairchild said. “We’ve just got to trust that everything’s going to work like they say it will.”
The marketplaces are mainly intended to help people who are uninsured or buy individual policies, or who run small businesses. Those Americans have had some of the toughest struggles in the country’s health care system.
Exchange proponents say the systems should be particularly helpful in states like Iowa, where there has been little competition among health insurance carriers.
Iowa’s effort got two big pieces of good news last week from state Insurance Commissioner Nick Gerhart. Gerhart said that a national carrier, Coventry, had committed to participating in the exchange. If Coventry had backed out, as some observers feared, most Iowans’ only other choice would have been CoOportunity Health. That would have been a blow, because the point of the exchanges is to offer choice to consumers.
Gerhart also said his initial review of premiums indicated that Iowa’s exchange would offer lower prices than most other states’.
Check suggests pair will get subsidy
Fairchild and Peterson are the kind of people who are most likely to benefit from the exchanges. They don’t work for a big employer that could offer them cheaper group insurance. They’re not poor enough or old enough to qualify for public plans, such as Medicaid and Medicare.
And one of them has a serious health problem. One drug that helps keep Fairchild alive costs $8,700 for a four-week supply. So they’ve got to have health insurance.
But with an annual income around $50,000, they need help keeping up with ever-rising premiums. Just last year, their premium from Wellmark Blue Cross & Blue Shield jumped nearly 23 percent, Fairchild said.
Iowa hasn’t yet released the full price list for policies that will be offered on its exchange. But Fairchild read over the proposed prices for Nebraska’s system, which includes both major carriers that will participate in Iowa’s new marketplace. He also used a website run by the Kaiser Family Foundation to get an estimate of how much the federal government would subsidize the couple’s coverage.
The upshot was that he and his wife expect to face a slightly smaller premium for a plan with better coverage than they have now. And the best news: The subsidy would pay nearly two-thirds of the cost.
The couple said they’ve never before taken government benefits, such as unemployment or disability. Fairchild said he’s a bit sheepish about accepting such a big subsidy toward health insurance, but he said he needs it.
Without help, the couple would soon be priced out of health insurance. Then he could no longer pay for thousands of dollars per month in treatment to keep his cancer at bay, would become sick again and would be unable to work, he said.
Many fear bugs in online system
With the Oct. 1 deadline to open the exchanges looming, organizers are scrambling to get the computer systems up and running and to train volunteers and professionals in how to guide customers through the new insurance-buying process.
Fairchild has already gone onto the main Obamacare website, healthcare.gov, which soon will be the entryway to the new exchanges. The website already offers lots of information about the coming programs, but Fairchild has noticed bugs with it.
“It’s all glitched up,” he said, shaking his head. He worries that such flaws will be magnified once signups begin. But he said he’ll patiently work his way through whatever problems crop up.
Jesse Patton, a West Des Moines insurance agent and leading figure in Iowa’s health insurance industry, has also encountered bugs. Patton has taken online training and passed a test, but he said he’s been unable to get confirmation that he’s registered to sell policies on the exchange.
“I’m concerned that if it’s so messed up that it can’t even get us registered,” he said, “what’s going to happen when they switch on the marketplace Oct. 1?”
Patton, who is president-elect of the Iowa Association of Health Underwriters, has preached a pragmatic approach toward Obamacare. He said he and other insurance agents want to help clients use the new system to check for the best deals on individual and small-group policies.
He predicted that if the system crashes repeatedly in its first weeks of operation, critics will leap to denounce it as a failure. That could scare off consumers who potentially could benefit from it, he said.
“It’s such a politically charged topic,” he said. “If something goes wrong, it’s going to be hard to sort out.”
Patton also predicts that there won’t be nearly enough government-trained “navigators” and “certified application counselors” to help Iowans get through the application process. He said insurance agents are prepared to pick up much of the slack, and they can help customers compare the deals both on and off the exchange.
Federal official: System will be ready
Nanette Foster Reilly, an administrator for the U.S. Department of Health and Human Services, expressed confidence last week.
Reilly said the main part of the federal government’s computer system is running and has been tested. The department has expert teams ready to fix any glitches that crop up as consumers begin using the marketplaces, she said.
“I hope that they will be patient. I believe that a system that large and as important as the health insurance marketplace deserves a little bit of time to get right,” she said. Reilly said many computer-savvy consumers should be able to use the website without assistance, similar to the way they use websites to buy airline tickets.
“If people are comfortable with an online purchase like this, and many of us are comfortable with online purchases, then I believe they’ll be able to make their purchases from end to end from their own home,” she said.
Others will be able to get advice over the phone, online, or in person, she said.
Reilly noted that consumers will have six months to sign up for insurance plans after the marketplaces open.
Reilly said she was aware of frustration with how long it’s taking for officials to say exactly how much insurance will cost on the exchange. Those answers will come soon, she said.
“I understand that people would like to see the plans and premiums before the marketplaces open,” she said, “but we’ve always said that plans and premiums will be on healthcare.gov on Oct. 1, when the marketplace opens.”
Doubt over main goal: Curbing costs
The longer-term question is how much good the insurance exchanges will do.
David P. Lind, a Clive health care consultant, supports the idea of the exchange, but warns that it can’t be seen as the full answer to the country’s rising health care costs.
“I am somewhat skeptical that having more carriers will somehow miraculously keep our health premiums down,” he said. “The premiums we pay for health insurance is nothing more than a derivative of health care costs. As health care usage and costs by procedure increase, so will the premiums we pay for health insurance, regardless of the number of carriers in the market.”
To really tackle the cost, he said, the health care system must become better organized and more efficient, and the American people must adopt healthier habits. Both of those goals are included in the overall health reform program, but it could be years before their success or failure can be fairly judged, he said.
— Carol Hunter, interim editor