| NEW YORK
NEW YORK Oct 25 Americans hitting roadblocks on
the new U.S. government-run healthcare website have been
contacting insurers directly and enrolling in plans away from
the federal marketplace, representing a lost opportunity for
President Barack Obama's landmark reform.
Since its launch on Oct. 1, technical problems have stalled
Healthcare.gov, the website meant to help millions of uninsured
Americans sign up for coverage as part of the biggest U.S.
social program since Medicare plans for the elderly launched in
Nearly a dozen insurance companies offering plans on the
exchange who were interviewed by Reuters say they have received
at most a trickle of enrollments through the federal marketplace
serving 36 states, some of them with errors that require the
insurers to separately verify information about applicants.
At the same time, consumer inquiries at insurance company
call centers and websites are up, in some case even double the
amount of normal traffic. When they hear from potential
customers who appear to qualify for government subsidized plans,
they take phone numbers, create shopping baskets for the plans
they like and send them to Healthcare.gov to verify eligibility.
But if the shoppers do not qualify for a subsidy, insurers
say they sell them a plan directly. More often than not, those
plans are individual policies that are not available on the
PHONES RINGING 'OFF THE HOOK'
Health First Health Plans in Florida, one of nine insurers
selling individual plans in the state through Healthcare.gov,
has sold only a handful of exchange-based plans through the
But its phones have been ringing "off the hook" since Oct.
1, said Jason Alford, director of individual and marketplace
sales. Many of the sales are for plans that extend coverage from
2013 into 2014 and that do not include many of the government
program's most significant benefit requirements.
"We have begun taking a number of off-exchange
applications," Alford said.
A chain of five Blue Cross Blue Shield insurance plans,
including BCBS of Texas and BCBS of Oklahoma, said it is also
sending buyers who qualify for subsidies to the exchange, while
those who do not qualify for subsidies have been buying off
exchange plans more often.
"I'm very hopeful that individuals will come back and
purchase the product," said Kurt Kossen, vice president of
retail at parent company Health Care Service Corp, referring to
customers who get information about a plan but do not buy it on
The move off exchanges is another way in which the
Healthcare.gov problems may jeopardize the administration's
efforts to sign up as many as 7 million Americans for coverage
on the exchanges in their first year, including an estimated 2.7
million young and healthy members needed to make the system work
The administration and the contractors it has hired say they
are working around the clock to fix the problems. The government
said on Thursday that about 700,000 applications have been
submitted so far for coverage through Healthcare.gov and 14
insurance exchanges run by states.
The loss of potential customers could become more critical
if the federal exchange is not fixed in time for an expected
influx of enrollments by Dec. 15, the last day to sign up and
have benefits available on Jan. 1.
Dan Mendelson, Chief Executive Officer at Avalere Health,
which has been tracking the exchanges closely, said although he
expects the Healthcare.gov problems to be solved, "There is a
void right now and the void is being filled in many cases by
insurers engaging directly with patients."
He said that "ultimately there will be a modest uptick in
the off-exchange products as a result of this."
WHITE HOUSE PROMISES FIX
White House officials on Wednesday met with chief executives
of 12 leading insurance companies, including Aetna Inc,
Humana Inc and WellPoint Inc. The administration
promised to fix problems with enrollment data sent to the health
plans and address issues that have prevented insurers from
directly enrolling consumers who are eligible for subsidies.
For some small insurers selling only on the exchange, the
technology issues have affected all of their business. Community
First Health Plans in San Antonio, Texas said that it was still
experiencing technical problems and that the volume of sales was
small. Community Health Choice in Houston, Texas said sales from
the federal exchange had been slow.
"I see that every day the system is getting a little bit
easier," said Daisy Morales, vice president of marketing and
Some insurers are selling 2013 plans that extend into 2014
and do not have all the benefits required by the 2010 Affordable
Care Act, commonly called "Obamacare," making them less costly.
As a result, a shift to off-exchange products could signal
that more healthy consumers will not be part of the Obamacare
In the first year of the exchanges, insurers are reimbursed
by the Obamacare risk adjustment program if they enroll very
sick people. The more people in the pool, the lower the risk,
and in the health insurance market, lower risk has meant more
competition and lower premium prices.
"I can't give you a magic number, but insurers need a big
enough pool of risk," said Jay Angoff, a former official at the
U.S. Department of Health and Human Services who now works as a
lawyer at Mehri & Skalet in Washington DC.
Jefferies & Co analyst David Windley said that a weaker
enrollment in Obamacare exchanges, with a final tally of a few
million consumers, could mean the risk pool has a higher
concentration of sick consumers.
It would mean "that the healthy ones tried and gave up (on
enrollment) and the sick ones were the persistent ones that
actually got through the process," Windley said.
In 2014, risk adjustment payments would help cover any hit
that insurers take because of the sicker population. After that,
it could mean higher premiums and therefore more government
spending per person on subsidies.
WellPoint Chief Financial Officer Wayne DeVeydt said in an
interview that the company, which has the largest presence on
exchanges among health insurers, is selling both exchange-based
products and off-exchange products from its websites. It sends
people eligible for subsidies to Healthcare.gov.
"It messes the timing up a little, just because those off
exchange can get in a little bit sooner," DeVeydt said. "It
doesn't change the outlook. None of these policies start until
Jan. 1 anyway."
At the same time, WellPoint on Wednesday told investors it
would not yet give a forecast for 2014 financial results due to
uncertainty over how the Obamacare exchanges will work next