Obamacare: What Could Go Wrong Next?

April 7, 2014 — -- intro:After a remarkable last-minute surge, the Affordable Care Act open-enrollment period closed last week, topping out at more than 7 million enrollees.

But even as a triumphant White House celebrated surpassing its enrollment goal, Republican strategists were downplaying its significance.

Though Obamacare undoubtedly hit a major milestone March 31, the path ahead could still be a rocky one.

Here’s a look at the challenges that remain for the president’s signature health care reform law.

quicklist:1title:DEADBEAT ENROLLEEStext:The 7.1 million number the White House has been touting includes individuals who have signed up to purchase health care but have yet to pay the premium.

If they don’t pay, they’ll be dropped from their plans.

Predictions about the number of enrollees who have actually completed the process by paying the premium run the gamut. One major insurer estimated that as few as 80 percent of enrollees had coughed up the cash. Department of Health and Human Services Sec. Kathleen Sebelius suggested that the number may be as high as 90 percent.

Of course, the most recent enrollees, whose coverage won’t kick in until May 1, haven’t received their bill, so it’s likely that at least some of the people who haven’t yet paid still will.

The White House seemed confident that the overwhelming majority of enrollees will follow through on their decision to purchase health insurance.

“Long before the Affordable Care Act ... a lot of people bought health insurance and the overwhelming majority paid for their health insurance on time. There will be nothing different about this,” White House press secretary Jay Carney told reporters.

Most insurers also believe that the patients who’ve signed up will pay up. Republican lawmakers have been less optimistic.

“Those numbers are a bit of funny math,” Tea Party darling Sen. Ted Cruz, R-Texas, said on Fox News. “At this point, it is abundantly clear this thing isn’t working.”

According to the White House, the current total does not include enrollees who signed up through the state-run exchanges on March 31 or individuals who purchased insurance directly from insurance companies. It also excludes people who will sign up during the special enrollment period, a second chance for those who encountered glitches on the site or underwent major life events like divorce or the birth of a child.

Of course, the total number of enrollees isn’t the only statistic that matters; the ratio of healthy to sick enrollees will also be critical.

quicklist:2title:GEOGRAPHIC LOPSIDEDNESS text:Political pundits have long pointed to the total number of young people enrolled -- and that number as a percentage of the entire marketplace -- as important indicators of the law’s success.

Thing is, the total number doesn’t really matter.

Risk pools are aggregated on a state-by-state basis. So what really matters is the mix in each state.

It’s possible that some states may have a disproportionately high percentage of healthy, young people while others will have a disproportionately low percentage.

Since premiums are also calculated geographically, next year’s premiums could rise in some areas and fall in others.

Nonpartisan healthcare policy experts estimate that for premiums to stay constant, youths need to constitute about 40 percent of each risk pool.

A Department of Health and Human Services report – which didn’t include a geographic breakdown – revealed that as of March 1, only about 27 percent of enrollees were youths. However, some areas experienced millennial surges in the final month of enrollment. We won’t know the percentage in each state until the backlog is cleared and the final numbers are released.

Regardless, experts believe that even if millennial enrollment remains at about 30 percent, next year’s premiums will rise by only about two percent.

quicklist:3title:UNHEALTHY YOUNG PEOPLE text:We all know that for the plan to work, Obamacare needs young people. But actually, that’s “young people” with an asterisk.

The percentage of young Americans, even when broken down geographically, doesn’t mean much if they aren’t, by and large, healthy.

Of course, young people, on the whole, are less likely to develop costly medical conditions.

But it’s possible that the overwhelming majority of the so-called “young invincible” demographic who have actually enrolled in the law did so because they know they’re not invincible – because they’re already sick.

The Affordable Care Act forbids insurers from rejecting patients based on pre-existing conditions, which means that it’s possible even younger enrollees already have costly medical problems.

Next year’s premiums will be calculated, in part, based on average medical bills per person – the total cost of care divided by the number of people in the risk pool. If the pool doesn’t have enough healthy people (young or not), premiums will rise.

quicklist:4title:A FLOOD OF ROUTINE MEDICAL PROCEDURES?text:Some previously uninsured patients (or those with sub-standard plans) have been putting off routine tests -- such as colonoscopies and pap smears -- that they will now be able to obtain at a fraction of the price.

(The Affordable Care Act’s essential health benefits requirement stipulates that all non-grandfathered plans must offer preventative care.)

An unusually high number of routine medical procedures could artificially inflate the per-person health care costs -- but only for this year.

Still, because average medical bills are used to calculate next year’s premiums, higher-than-average health care costs in 2014 could result in premium hikes next year.

quicklist:5title:TECH TROUBLES text:Just when we thought HealthCare.gov’s tech woes were over, the site crashed for a short period on the final day of enrollment. But that wasn’t the only -- or even the most-serious -- technical issue facing the site.

Fortunately for most consumers, the remaining roadblocks are likely to affect insurers, not the insured.

The mechanism to pay insurers the government subsidies -- the difference between the plan cost and the patient’s payment -- has yet to be completed.

It’s not yet clear when the so-called “back-end” mechanism will be completed. In the meantime, insurers have reportedly been manually billing the government for the subsidies.

But some believe manual billing will be riddled with errors and is likely to result in yet another administrative headache.

Republican lawmakers, now focused on efforts to “repeal and replace,” have been quick to call these challenges unsolvable. Democrats, on the other hand, are already labeling the law a success. But even as politicians trade barbs, insurers know the jury’s still out.

We’ll see.