Today officially marks the one-month anniversary of the live launch of Obamacare's state and federally run health exchanges, and to say the least it's been difficult at times to separate Obamacare facts from political fiction.
Although it's not a perfect divisor, Republicans almost uniformly oppose the Patient Protection and Affordable Care Act, known affably as Obamacare, while nearly all Democrats support it. This ongoing partisan disagreement was one of the primary sticking points that pushed the government into a shutdown through the first 16 days of October.
Underneath the haze of the political bickering, though, we've been able to uncover 10 Obamacare facts that speak to both the success and failure of this new law in its early stages. Let's have a look at what really matters so far and how it may affect you and your investments.
No. 1: There have been numerous glitches with Healthcare.gov.
In President Obama's own words from a speech 11 days ago, "There's no sugarcoating it. The website has been too slow. People are getting stuck during the application process." The rollout of the federally run health exchange, Healthcare.gov, has been nightmarish, with multiple glitches ranging from incomplete applications received by insurers to users being unable to complete or access the application or identification process.
No. 2: The system wasn't tested enough prior to its launch.
According to Aetna (NYSE:AET) CEO Mark Bertolini in an interview with CNBC two-and-a-half weeks ago, "There's so much wrong [with Healthcare.gov], you just don't know what's broken until you get a lot more of it fixed." Bertolini and many of the software architects of Healthcare.gov, including the primary contractor CGI Group, have been openly critical of the government for not allotting enough time to test the system prior to its launch on Oct. 1.
No. 3: It's going to take multiple companies to fix the glitches.
Healthcare.gov's glitches are so complex and cumbersome that it's going to require the Department of Health and Human Services to go outside its list of contractors and bring in private help to fix the problems. Last week USA Today rumored that Verizon as a company that may be called upon for its networking expertise, but the only confirmed outside help we know of is coming from Google, Oracle (NYSE:ORCL), and Red Hat (NYSE:RHT). According to a spokesperson at the HHS via Reuters, "Individuals from Oracle and Red Hat have expertise in site reliability, stability and scalability."Based on Google's global network expertise and out-of-the-box thinking, I can see why it was called upon to assist as well.
No. 4: Everything should be running smoothly by the end of November.
The glitches may appear overwhelming, but Healthcare.gov spokesperson Jeffrey Zients has publicly placed the end of November as the deadline when the website will be running smoothly again for the majority of people in the 36 states relying on Healthcare.gov. What we don't know yet is if there will be repercussions if this date isn't hit, but we know for certain this is the target date you should be watching if you've had trouble accessing Healthcare.gov and you live in one of the 36 states that's reliant on the federally run health exchange.
No. 5: Enrollments are pacing below the targeted rate of signups.
Also according to Jeffrey Zients, approximately 700,000 applications across the country have been filled out -- including both the state and federally run health exchanges – through the first three-and-a-half weeks. But we have no clue how many of those applications have resulted in actual health insurance enrollments. With HHS Secretary Kathleen Sebelius targeting 7 million enrollees by the coverage cutoff date on March 31, 2014, we know that early stage signups are tracking well below this level. One thing to keep in mind, though, is that signups are expected to be very much back-loaded, with people waiting to enroll to the last minute (i.e., February and March) to pay for their policy.
No. 6: State-run exchanges are outperforming Healthcare.gov in enrollments.
The state-run health exchanges haven't been glitch-free by any means, but in the early going they are handily outperforming Healthcare.gov. Although we have no official enrollment figures to compare against for the federally run site, just two weeks after the 14 state-run exchanges opened roughly 115,000 Americans had signed up, led by New York and Washington state with 40,000 and 24,949 enrollments, respectively.
No. 7: Sentiment toward Obamacare is improving.
You're probably well aware of the vocal opposition against Obamacare, but interest and sentiment toward Obamacare is improving. According to Jeffrey Zients, through three and a half weeks there were 19 million visitors to the Healthcare.gov website, obviously signaling that there's interest by Americans in obtaining affordable health insurance. In addition, an aggregate of seven polls by The Huffington Post last week also shows that the favorability of Obamacare is improving, most likely because of increased familiarity with the law and how it will affect the polled individuals.
No. 8: Private exchanges are flourishing.
Healthcare.gov's pain has been private health insurance platforms' gain. No company has been a bigger beneficiary than Aon (NYSE:AON) subsidiary Aon Hewitt, which has landed at least 18 new corporate clients with 5,000 or more employees, including Walgreen with 120,000 eligible employees, as a direct result of corporations shifting away from managing their employees and retirees health insurance. Similarly, eHealth (NASDAQ:EHTH), which has run a private insurance platform for years has seen membership surge year over year and clocked a 24% gain in membership in its latest quarter.
No. 9: There are other ways to sign up for health insurance.
Healthcare.gov may be riddled with issues and a few state-run exchanges aren't even off the ground yet, such as Oregon, but there are other ways you can go about signing up for health insurance other than by using the website. Call centers have seen their staffing increased by 50% to handle an influx of calls from people wishing to apply over the phone. Also, people can return to their pre-Internet roots and apply for health insurance with a pen and paper and mail their application in.
No. 10: The individual mandate isn't going anywhere.
Perhaps the most important and overlooked fact of all is that Obamacare is here to stay and so is the individual mandate, which requires individuals to have insurance by Jan. 1, 2014, or face a penalty of the greater of $95 or 1% of their income in 2014. Speculation has been that regulators would at least push back enforcement of the individual mandate a few weeks or months until Healthcare.gov was fully functional, but that has not been the case. This means that if you don't currently have health insurance, you should be planning to get insurance before the coverage cutoff period passes on March 31, 2014, or be prepared to pay a penalty.