Friday, November 29, 2013

A caveat for Ezra Klein

[updated, with a rather large caveat to the caveat...]

..who has a cogent set of questions about how well HealthCare.gov will be working as of Dec. 1 and going forward.  On one key question I think there's a moderating factor:
9. Where the Dec.1 deadline really matters is for people who've already had their plans canceled and who need to be able to sign up for a new one in time for it to start on Jan.  1. If the Web site isn't working smoothly for these people in the next week or so it'll be an utter disaster when 2014 comes and many of these people find themselves uninsured and some get sick.
Most people subject to policy cancellations in the individual market are probably not eligible for subsidies, since they've already found insurance affordable. That means they don't really need HealthCare.gov.  They can easily get complete information about their options on ValuePenguin and then sign up directly with an insurer. [UPDATE: I'm afraid my premise here is severely compromised; William Ocasio reminds me that a recent Families USA study found that 71% of those currently in the individual market are below 400% of the Federal Poverty Level, and thus potentially eligible for subsidies. In practice, though, many people above about 270% FPL are not subsidy-eligible -- you only get a subsidy if the full cost of the benchmark silver plan exeeds a benchmark percentage of your income, and plan prices vary pretty widely from market to market. Still, probably more than half of those subject to cancellation are in fact eligible for at least some subsidy.]

Those who have received policy cancellations and are eligible for subsidies will need to get a subsidy application processed by hook or crook (that is, by online, phone or print application to the federal government) by Jan. 1. If they can't, I would imagine that some kind of retroactive subsidy payment will have to be worked out, after a lot of angst. For what it's worth, the subsidy-eligible probably won't be subject to rate shock, unless they're at the very top end of the scale, where the subsidy can shrink to near nothing.

Related:
Bypassing HealthCare.gov, cont.
Who needs HealthCare.gov?

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