It has taken almost three full months, but Obamacare's state and federally run health exchanges are finally operating as expected. The road to this achievement, though, hasn't been easy.
Over the first two months since the federally run Obamacare website Healthcare.gov went live, and a handful of states ran into technical issues, the Department of Health and Human Services notes that fewer than 365,000 people were able to fully sign up for health insurance. An innumerable number of glitches made Healthcare.gov practically unusable before the tech surge fix, and only recently have residents in the 36 states covered by Healthcare.gov been able to fully access the site without problems.
The first Obamacare deadline passes
Even more recently -- just this past Tuesday, in fact -- we witnessed the passing of the very first Obamacare deadline. The December coverage cutoff date -- the last date to enroll by but still be covered by Jan. 1 -- originally had been Dec. 15, but was pushed back to Dec. 23 to accommodate the numerous citizens who were unable to access Healthcare.gov in the prior two-month period. With the HHS witnessing such strong website traffic over the previous weekend (nearly 2 million visitors per day) it decided to push the coverage cutoff date back once again, this time by one day, to Dec. 24. With that date having come and gone, and total Obamacare enrollments essentially tripling in a matter of days, we now have a slightly better understanding of where Obamacare stands on the success-versus-failure pendulum with regard to enrollments.
What we also have, though, is our first instance of a deadline that was stuck to which has come and gone. For some of you, it could also be your first instance of "what should I do now" because you either didn't sign up for health insurance, forgot to sign up, or had technical issues and couldn't sign up, by the Dec. 24 coverage cutoff date.
The good news is that there's still time to get covered without falling out of compliance with the actionable portion of the Patient Protection and Affordable Care Act known as the individual mandate. Moving forward, there are really only two deadlines that consumers and investors need to know.
The two Obamacare deadlines you need to know
The first date, March 31, is the official coverage cutoff date to enroll in health insurance under Obamacare and avoid the penalty for not having insurance on your 2014 tax return, which is the greater of $95 or 1% of your annual income. In other words, we aren't even to the halfway mark yet between the Oct. 1 kickoff of Obamacare's health exchange marketplaces and the point at which enrollments cease.
This date is particularly important, as I've stated previously, because many Americans are holding off on purchasing health insurance for as long as they can to avoid paying the monthly insurance premium. Because Americans are legally allowed to go without insurance for three months each calendar year without violating the individual mandate, some people will simply choose to bypass three months of premiums and pile into the health-care system at the last possible minute.
The other important date to keep your eyes on here is Nov. 15, which is when the next open enrollment period will begin for 2015. I know that seems like an eon from now, but it's notable for three particular reasons.
First, this open enrollment period is a full six weeks later than the Oct. 1 open enrollment kickoff this year. According to the HHS, the reason that's being done is to give insurers ample time to determine how effective Obamacare was in helping regulate their medical costs.
It's widely expected that the sickest individuals, or those most likely to be in need of care, will be among the first enrollees in Obamacare. However, insurers need healthy young adults to sign up as well to counteract the higher costs associated with accepting patients with pre-existing conditions (as part of the PPACA, insurers can no longer reject patients with preexisting conditions). This extra six-week period should be ample time for insurers to comb through their data and come up with competitive price points among all four pricing tiers.
The extra six-week period will also be ample time for insurers such as UnitedHealth Group (NYSE:UNH) and Aetna (NYSE:AET) to re-evaluate whether or not they want to reenter more populated, but competitive, marketplaces. Both insurers chose to stay out of California's market which is admittedly dominated by four individual market insurers, but has likely added more than 250,000 Obamacare enrollees since Oct. 1 thanks to open market pricing.
Another reason Nov. 15 is worth noting is that it's well after mid-term elections. Despite the HHS' insistence, politics was not the reason the open enrollment period was pushed back six weeks in 2014, it appears pretty obvious that elections would be a distraction to Healthcare.gov and Obamacare and only further complicate the open enrollment period.
Finally, we also have to take into account that the employer mandate will go into effect a year from now, so by Nov. 15 Healthcare.gov and state exchanges need to be able to cope with the addition of employers and/or small businesses to health exchange network. This extra six weeks should help accomplish that goal.