Health Insurance Marketplaces Open for Business

The federal government shutdown does not delay the health insurance exchanges from launching as scheduled. Health insurance coverage begins on Jan. 1, 2014 for those who sign up by Dec. 15.

The sun rose in the East this morning and health insurance exchanges opened for business, vacating predictions in some corners that this critical provision of the Patient Protection and Affordable Care Act would usher in The Apocalypse.

The six-month extended enrollment period runs until March 2014 and coverage begins on Jan. 1, 2014 for people who sign up by Dec. 15.

While the success of the exchanges has been the subject of widespread speculation, nobody really knows who or how many of the estimated 24 million eligible people will sign up for coverage.

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"It's a good thing that they have six months to figure it out," says Paul Lambdin, director of Deloitte Consulting. "We have to remember this is an outreach to a large part of the population that may be somewhat hard to reach given the demographics and [they are] very unfamiliar with the product."

A Commonwealth Fund survey released this week found that 76% of U.S. adults are aware of the PPACA's individual mandate, while only about 40% are aware that the health insurance marketplaces open today and that financial help for premiums is available. Commonwealth Fund vice president Sara Collins said the survey found that once people were made aware of the marketplaces, 61% of those who are potentially eligible said they would be likely to shop for coverage.

In addition, the survey found that only 32% of adults with incomes under 250% of the federal poverty level of $28,725 for an individual and $58,875 for a family are aware of the subsidies, compared to 47% of those with higher incomes.

"These survey findings demonstrate that people who need the health insurance coverage the marketplaces will offer want to shop for plans and find out if they are eligible for financial help," Collins said in prepared remarks.

"However, more work needs to be done to ensure that people who may be eligible are aware of the marketplaces and the subsidies. State and federal efforts to educate people about the marketplaces during the six-month enrollment period beginning in October need to be intensive enough to help close the information gaps this survey highlights."

Unfortunately for health insurance companies and the federal government, the Commonwealth Fund survey showed that only 55% of young adults ages 19 to 29 who are potentially eligible for the coverage said they would be likely to use the marketplaces, compared to 65% of those ages 30 to 49.

Adults with health problems were slightly more likely to say they would use the marketplaces than adults with no health problems (65% vs. 57%). Supporters of the exchanges are banking on a healthy mix of younger enrollees to offset the cost of care provided for older and sicker people.

Clare Krusing, spokeswoman for America's Health Insurance Plans, says the plans have focused on making the coverage affordable to attract younger enrollees, but it's not clear if they'll sign up.

"Experience in the states clearly demonstrates that enacting health insurance reforms without ensuring broad participation, particularly among those who are younger and healthier, will have significant unintended consequences for consumers and employers," Krusing says.

"The healthcare reform law will expand access to insurance and broaden insurance benefits. Everyone can sign up, including those with pre-existing medical conditions. These new benefits bring new costs. Financial assistance will be available to help qualifying individuals and families pay for coverage. Even with this new assistance, the new benefits will cause some people who currently have insurance to pay more than they do today. When faced with higher health care costs, many younger, healthier people may choose to forgo purchasing coverage until they need it, especially when the penalty for not having insurance is as low as $95.  If this happens, costs will go up for everyone, young and old."

To get the word out on the exchanges and help consumers find the right coverage, the Department of Health and Human Service has enlisted more than 900 volunteer "Champions for Coverage" across the nation. The champions include the American Academy of Family Physicians, American Nurses Association, Lutheran Services in America, and YWCA USA.

"We are both excited and thankful to have such a wide variety of businesses and organizations that want to get involved and help us spread the message about these new opportunities for people to access quality, affordable health insurance with open enrollment beginning tomorrow," Marilyn Tavenner, administrator for the Centers for Medicare & Medicaid Services said in prepared remarks.

The exchanges are not tied to annual spending bills, so they will continue to operate even in the wake of the federal government shutdown triggered by stalled budget talks in Congress.