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The Law Ain’t Done Until The Election Is Won

No matter what other news occurs today, the American news media today will deliver a breathless report on whether a graduate student in Ames, Iowa, can successfully sign up for health insurance on the HealthCare.gov website.

Today is the first business day after Dec. 1, the magical date on which the problem-plagued federal insurance exchange was supposed to be working better for the “vast majority” of users, whatever that means. Not necessarily working perfectly for anyone, nor working reasonably well for everyone, but working reasonably well for most of the people - like that hypothetical Midwestern grad student - that the Obama administration desperately wants to enroll in what the president once proudly called Obamacare.

As with many things, the data you seek is the data you are likely to find. Backers of the Affordable Care Act will certainly be able to claim that the website is working far better than when it first opened two months ago. Of course, back then the website essentially did not work at all, so almost any measure of change would be a vast improvement. Still, unless things go horribly wrong yet again for the site’s operators, by day’s end they ought to be able to report that the site now allows most users to compare available health plans, compute their net cost after any available federal subsidy, and sign up for coverage that will take effect by Jan. 1. By any definition, that is progress.

On the other hand, the law’s many critics will be able to point out that allowing people to sign up for coverage may be just a gateway to even larger and more intractable problems down the line. For one thing, a large part of the website’s back-end functionality either is not working very well or does not yet exist. These are functions that consumers never see, such as accurately conveying to insurance companies which customers have signed up for what sort of coverage; ensuring that there is no confusion over the identities of the customers who have signed up; keeping customers’ personal data secure; and, vitally important to the insurers, verifying that subsidies have been accurately computed and transferring the requisite federal dollars from the U.S. Treasury to the insurers in a timely way.

This infrastructure is essential for the new insurance markets to function. But like a big-city water main, the average citizen never even notices it until something breaks and suddenly nothing comes out of the tap. Regardless of how today’s headlines play out, we are going to hear much more about HealthCare.gov’s shaky structure in the weeks and months to come. The next big date will be New Year’s Day, when people who think they have coverage start showing up in emergency rooms and doctors’ offices, only to discover they do not. (Tip: If you signed up for coverage but have not received a new insurance card by Christmas, call your insurance company. I am not promising you will get through the hold queue, but at least you will have a chance to find out where you stand.)

Things should get really interesting later this month, thanks to President Obama’s declaration that Americans will have until Dec. 23 - rather than Dec. 15 - to sign up for coverage that will take effect at the beginning of January. The original deadline was already a fairly tight squeeze for insurance companies to process paperwork, issue insurance cards and - crucially - collect premium payments from consumers for coverage to take effect on Jan. 1. With the new Dec. 23 deadline, and subtracting a day for Christmas (though I suspect a lot of insurance company workers will spend the holiday at their desks), that leaves only seven days from signup to checkup. Good luck, folks.

That part about collecting premiums is vital, because insurance companies do not commence coverage until a premium has been paid. This prevents people from accidentally buying duplicate coverage, or from applying for insurance, receiving treatment and then defaulting on their premium. I imagine the feds will lean on insurers to be lenient about this, but it is not clear whether state regulators will allow a lot of leeway. Most likely, it will vary from place to place.

Other parts of the Affordable Care Act are getting pushed back too. On Thanksgiving Eve, the administration dribbled out the news that small businesses will not be able to arrange coverage through the exchanges until next year. Meanwhile, the Spanish-language version of the site is little more than a billboard at this point. It is unable to process applications until a so-called soft launch, to occur on an unannounced date later this month. By not calling attention to the soft launch, the administration avoids further embarrassing publicity over the site’s shortcomings.

But the more substantial delays will create the biggest problems in the long term. The president’s decision last month to allow insurers to renew, for one additional year, insurance policies that do not meet the new law’s broad coverage mandates is expected to keep many younger and healthier customers out of the new insurance exchanges. If consumers take advantage - which depends on whether insurers offer the renewals on policies that were being canceled and whether state regulators permit such renewals - then the new exchanges will attract a disproportionately older and sicker population. Insurers would have to respond by considering large price increases to take effect next year.

Obama has a delay in mind for that, too. Just 10 days ago, the White House declared that insurers will not begin offering policies for 2015 until Nov. 15, 2014, a month later than planned. That month gives insurers some extra time to evaluate the pool of customers they attracted this year, and it gives the administration more time to lobby against major price hikes. More importantly, at least according to cynics and administration critics (who are often one and the same), it means the new signups will not occur until after next year’s midterm congressional elections. Voters will still know that price hikes are coming, but individual citizens probably will not see how their particular rates change until after the balloting is over.

Still, the one-year reprieve for pre-Obamacare plans will be pretty much over by Election Day. Another round of cancellation notices will be going out. Democrats who are hoping that voters will fall in love with their legislative opus by next fall are, I suspect, in for another disappointment.

Then again, we ought to know by now that whenever part of this ill-considered law draws attention to itself, the administration simply rewrites the legislation’s terms and deadlines to suit the politics of the moment. To call this a health care system is to believe that a system can be utterly unsystematic.

Or to paraphrase an old canard from the early days of personal computing, this law ain’t done until the election is won.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us,” and Chapter 4, “The Family Business.” Larry was also among the authors of the firm’s book The High Achiever’s Guide To Wealth.

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