Individual Insurance Exchange Enrollment Penalty Delayed

Amid the havoc of a healthcare insurance exchange website overwhelmed with problems, many aired concerns as to whether the individual mandate penalty would be delayed. In addition to President Obama calling in reinforcements to address exchange technology problems, the administration announced Wednesday that it would extend the consumer enrollment deadline until March 31, 2014. This 6-week enrollment extension is meant to “align” healthcare processes, as the law previously required consumers to sign up by February 15 in order to avoid tax penalties.

“The administration is working to align those policies and will issue guidance soon,” an administration official said Wednesday. “This guidance will ensure that if you sign up for insurance by the end of March, you will not face a penalty.”

Kathleen Sebelius, secretary of Health and Human Services (HHS), said that “admittedly” the marketplace had some issues that needed to be fixed. She suggested that HHS is hopeful to implement greater server capacity, and to make system software changes that will make the site more accessible.

Delays and missed deadlines for such Affordable Care Act initiatives could mean that other areas of reform are also likely to be affected. Insurance companies, for instance, have set premiums based on the concept that young, healthy individuals would be enrolling into plans on the basis of facing a penalty, and that enrollment would occur within the original 6-month period. One insurance industry representative said that in order to compensate fewer young enrollees, payers will likely be forced into modifying policies. “If you change the rules, insurers are going to want to change their premiums,” he commented.

Cheryl Campbell, senior vice president of CGI Federal, said that majority of initial exchange issues have been pinpointed to require consumers to register before they were able to browse health plan options. The influx of curious browsers created a “bottleneck” that the system couldn’t handle.

“As more and more users have been able to proceed to the (exchange) over the past several days, more individuals have enrolled in qualified insurance plans,” Ms Campbell said. “However, the increased number of transactions in the (exchange) have caused system performance issues (such as slow response times or data assurance issues) that now need to be addressed through tuning, optimization, and application improvements.”

For now, White House officials are trying to focus on the long-term goals of the marketplace rather than the day-to-day enrollment numbers. The situation is being labeled as a DEFCON 1. “If it’s not running by Thanksgiving, that’s DEFCON 2,” said Jonathan Gruber, an economist at MIT. “It's a real problem because people want to get insurance by January, but it's not a crisis. The real crisis comes if people can’t get insurance until March.”

Of course, he adds, consumers still have the option to purchase exchange plans from insurance companies through the phone or paper application process.

Around the Web

HealthCare.gov’s Glitches Prompt Obama to Call in More Computer Experts

[The Washington Post]

White House to Tweak Tax-Penalty Deadline [The NY Times]

On the Road in Ohio [HHS Blog]

Why Postponing Insurance Mandate Is No Easy Fix For Obamacare [NPR]

Hot Seat for Healthcare Exchange Website Builders [USA Today]