Why Should You Consider Delaying Enrollment In A Health Exchange?


Click the graphic for a larger view.
Click the graphic for a larger view.

This question was asked, by an Obamacare supporter, in a not-so-friendly manner last week.

I must admit that the argument that was made was compelling.  It would have caused me to change my mind if I did not think for myself.

Unfortunately, much has been said about the good things behind the new health exchanges.  The problems that they are having are not getting the same amount of attention.

The fact is that while the intent of the PPACA may have been good, in theory, the practical implementation has not been as smooth.

When the PPACA was passed, amid great partisan protest, it was assumed that the individual states would buy into the new law.  They would spend their time and treasure to set up complicated systems known as health insurance exchanges.  Those who supported the PPACA anticipated that fewer than 6 states would rebel and the federal government would have to build health insurance exchanges for them.

Unfortunately, things did not turn out the way they were anticipated.  Rather than the federal government having to build only 6 exchanges, they have had to build 34.  The result is that they are significantly behind schedule.

In spite of the fact that the Obama White House has postponed enforcement of the Employer Mandate for a year and will not offer S.H.O.P. exchanges for 2014 that give employees the choices that were mandated in the PPACA, they swear that the Federally Facilitated Exchanges will be ready to go on October 1.

Those people who live in the 16 states that have set up their own health insurance exchanges do not have as much to be concerned about as Americans who live in states that have a Federally Facilitated Exchange.

WHY

The main cause of concern is not political.  It is practical.  States that have “bought” into Obamacare early and have elected to build their own exchanges, have had sufficient time to test and make certain that their systems are working.

On the other hand, Americans in states that have elected to allow the federal government to build their exchanges need to be concerned with computer problems.

BUILDING A HEALTH INSURANCE EXCHANGE

The division of the Department of Health and Human Services that is building the exchanges, CMS, will probably have some sort of computer system running by October 1.

Unfortunately, the system that will be in place will have had very little testing.  It is almost certain that there will be “glitches” and delays in the system.

It is a matter of historical record that when the same department built the computer system for Medicare D, there were problems.  I had to deal with several upset senior citizens while CMS identified and solved problems.

The new health insurance exchanges are much more complicated than the one that CMS built for Medicare D.

MANDATED HEALTH INSURANCE

If you have “affordable” health insurance through your employer, are enrolled in Medicare or Medicaid, or otherwise are exempt from Obamacare’s Individual Mandate, you will not have to choose between purchasing health insurance through an exchange or directly from an insurance company.

However, if you are not part of any group mentioned above, you are required to have government approved health insurance by January 1.

EXCUSES AND DELAYS

If you do not wish to deal with the excuses and delays that come with computer “glitches” there is one strategy that you may want to investigate.

The PPACA has a provision in it that allows you to delay getting an “Essential Benefit Plan” until your current plan renews in 2014 if you do not have a “grandfathered” plan.

Those people who still have plans that started prior to March 23, 2010, who have not made significant changes, are not required to buy a government approved health insurance plan.

If you already have a health insurance policy with an effective date after March 23, 2010 but before December 31, 2013, you are able to delay buying an “Essential Benefit Plan” until your current plan renews in 2014.

That means that you will have more time for CMS to identify and correct computer problems before you enroll, if you elect to use a Federally Facilitated Exchange.

AVAILABLE OPTION

Most of the talk that you hear on TV imply that the health insurance exchanges will be your only option to buy government approved health insurance.  If that is your understanding, you are wrong.

The PPACA provides for another option.  You can purchase your government approved health insurance plan directly from an insurance company, if you already know what you want.

The rules are basically the same for you regardless of where you buy your health insurance with one major exception.  If you are wanting to enroll in a government sponsored health insurance program, like Medicaid or CHIP, or you want to claim a “subsidy” you will have no choice but to buy your government approved health insurance on the exchange.

If you currently have no health insurance or what you have does not meet the government’s standards, you will need to buy government approved health insurance by January.

However, if you already have health insurance that meets government standards, you can delay buying an Essential Benefit Plan until that policy renews in 2014.

Alternatives 2

 

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