Obama administration officials have delayed the open enrollment period for purchasing coverage through health insurance exchanges for 2015, according to a Bloomberg report.
The move, which would postpone the start of open enrollment to Nov. 15, 2014 from Oct. 15, has both political and practical implications.
Politically, it would minimize the public awareness of potential rate hikes until after the 2014 midterm elections.
Practically, it would allow insurers more time to set rates.
As I reported previously, under the existing timeline, insurers were expected to submit rates by April 30 for the following calendar year.
But insurers have to know what the final 2014 risk pool looks like before setting rates for 2015. And the current open enrollment period extends through March 31. So, as things stood, one month didn't really give actuaries much time to crunch the numbers for the current insurance year before setting rates for the next one.
Pushing back the start of next fall's open enrollment period would give insurers more time to set rates.
Alternatively, it could provide more leeway to extend the current open enrollment period past March 31, something that some Democrats have asked for given the technological problems that have plagued the rollout of President Obama's health care program. That would require an act of Congress, as I explained in an earlier post (though Obama has made a habit of taking administrative actions that aren't supported by the text of the law).
Enrollment in health insurance plans through the exchanges has been tracking much lower than expected, triggering fears that the risk pool will skew toward older and sicker Americans.
Though 2014 rates are already locked in, such a scenario could force insurers to jack up rates in 2015. That, in turn, could turn off even more young and healthy Americans, triggering even steeper rate hikes for 2016. Thus, the dreaded "death spiral" phenomenon would ensue that could eviscerate the insurance market.
Regardless of the delay, rates would still become public prior to the November 2014 midterm elections, providing fodder for Republicans. But given that the exchanges won't be open until after the election, the level of public awareness about rate hikes won't be as extensive as it otherwise would have been.