It's Too Late to Delay Obamacare

The website is riddled with glitches—why not just postpone the launch? Because doing so could increase customer costs or deprive citizens of coverage entirely.

Jason Reed/Reuters

Delay is in the air.

Marco Rubio on Monday introduced the “Delay Until Fully Functional Act” to postpone the Affordable Care Act's individual mandate until six months after the government could certify "that the exchange website is fully functional." Ten Democratic senators have now signed on to a letter, drafted by New Hampshire Senator Jeanne Shaheen, asking the president to extend the open-enrollment period beyond March 31. West Virginia Democratic Joe Manchin called for a "transition period" in Obamacare and some mechanism to prevent costs to people already in the individual market from going up. "Nobody should be forced to buy a policy that costs more than what they had and is inferior to what they had," Manchin said Sunday on ABC News's This Week. An individual-mandate-delay bill already passed in the House in July 2013, with 22 Democrats joining Republicans to vote for it, and then again right before the government shutdown in September. Several Republicans have called for a halt in the whole system while is fixed. "Congress should press 'pause' on the tech surge and figure out what went wrong first before throwing good money after bad and forcing the public to use a broken site," said Pennsylvania Rep. Tim Murphy at a hearing in October.

But it is too late to delay Obamacare. The private health-insurance market is in the throes of major changes, and there is no going back. Anyone who is calling for the system to be put on pause at this point is calling for the millions of people being moved out of existing private-market plans to have fewer options for new coverage, instead of more, and for them to be denied opportunities to find subsidies for plans. And anyone calling for a significant delay in imposing the individual mandate is putting at risk the affordability of the entire private individual-insurance market as it's been shaped to meet the law's requirements over the last three years, insurers warn.

“The individual mandate is inextricably linked to the insurance-market reforms included in the health-care-reform law," said Robert Zirkelbach, a spokesman for the industry group America's Health Insurance Plans. There are historical precedents for trying to overhaul the insurance system without mandates in the states, and those precedents are failure.

"In the 1990s, several states enacted insurance-market reforms without achieving broad participation and it failed," Zirkelbach said. "Premiums increased dramatically, consumers and employers had fewer coverage choices, and the number of uninsured increased." To avoid "repeating the state experience," the 2010 health-insurance overhaul mandated that everyone purchase coverage and established a long initial open-enrollment period "to incentivize young, healthy people to purchase and maintain health insurance rather than waiting until after they get sick or injured to sign up." Without these young people purchasing insurance in the markets, the whole pricing structure of the private health plans in the new markets goes haywire.

Even delaying the mandate past the March 31 deadline, which may sound intuitively like a fair thing to do, would fundamentally disrupt the markets in a way that increases costs, insurers warn. Everything insurers have done was designed around a fixed plan, and any significant changes in mid-course—and we are now in mid-course—will destabilize what's being rolled out this year and for 2015 (open enrollment for 2015 will take place in late 2014).

“The administration’s proposal to align the individual-mandate penalties with the open-enrollment sign-up period ending on March 31 is consistent with what health plans assumed in their premiums for next year. Going beyond this proposal by delaying the individual mandate and/or extending the open enrollment period past March 31 could have a destabilizing effect on insurance markets, resulting in higher premiums and coverage disruptions for individuals and families," Zirkelbach said.

“Moreover, if these vital enrollment incentives were to change, the premiums health plans filed for next year would have to increase to account for fewer young and healthy people signing up for coverage.”

Health and Human Services Secretary Kathleen Sebelius pointed out during the House Energy and Commerce hearing Wednesday that the open-enrollment period being offered consumers by the exchanges is already "extraordinarily long."

"It's about six times as long as a typical generous open-enrollment period," she said. "And it's important for the insurance partners to know who is in their pool so again they can stay in the market next year and know who they are insuring."

If is fixed by November 30, the administration's stated target, customers will have four full months to enroll, she noted.

"We think it's important for everyone to understand that the individual mandate is critical to making the insurance reforms work and to ensuring affordable coverage for consumers," the Blue Cross/Blue Shield Association told TPM. "Unless everyone is covered, the reforms included in this law fundamentally do not work. An extension of the open-enrollment season is effectively a delay of the individual mandate, with the same serious consequences for consumers."

This is something especially for Democrats calling for delays and extensions to consider: Rather than fixing a political problem for themselves and a practical enrollment problem for their constituents, delaying the mandate and extending enrollment would provoke a fresh round of problems with the exchanges during the fall of 2014. A fresh round of open enrollment is set to begin on October 15—just weeks before the midterm elections.

This would be great for Republicans, politically. But it's hard to imagine it working out better for Democrats than focusing on making the process the nation is already in the middle of a success.