Wednesday, October 16, 2013

What if Does Not Work by January?

We saw the headline in the Sunday Detroit Free Press that 146,000 Michigan residents will lose their health insurance coverage come January.    This includes about 140,000 Blue Cross Blue Shield of Michigan members, including my wife.  If you've been following along here at, you would have known about this back in August.

I was at a seminar yesterday put on by the Saginaw Chamber of Commerce featuring an excellent panel.  Once again, I found myself surrounded by baffled and scared businesspeople.  They really don't know what they are going to do.  Also, given that the just does not work, they will face obtaining insurance and complying with the law without the options the law envisions.

Some Republicans have called for a delay of the individual mandate in light of the fact that the President suspended the employer mandated.  I think there is a good chance a court would not enforce the penalties against someone who does not obtain insurance next year, especially if the exchanges don't work.  That's doubly true in states without the Medicaid expansion.  But it misses an important point.

For people who are losing coverage through their employers or are being dropped by their current insurers in the individual market, will coverage be available if the technical challenges facing the exchanges can't be overcome by January.  Some Democrats have pointed out that open enrollment goes through March, but what if you get sick or injured in January or February?  Also, for people who could buy insurance but decide to go without for part of 2014 will have to pay a penalty for the months they go without coverage.

I spoke with a representative of BCBSM and it is possible to buy a policy through a broker or directly from them, bypassing the exchange.  She said that the subsidies and tax credits would not be available and I believe that is correct.  It's not clear to me whether one can similarly go through a navigator and obtain a policy outside of the exchange and still get assistance to pay for the policy.

If you can afford to pay full price, it appears that coverage will be available despite the problematic rollout.  But this will cost a pretty penny as the premiums are high and the deductibles outrageous.  Perhaps a partial solution would be to allow people to buy the approved policies directly outside the exchanges and then allow them to claim the tax credit on next year's tax return.  That won't work for many who will not be able to front the money for the premiums, but it would help some.

Time for Today's Obamacare Headlines.

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