“Americans with higher medical costs are more likely to endure an arduous enrollment process than healthier individuals”

From “Behind the curtain, more red flags:”

“This doesn’t even get to the broader health policy issue. The success of Obamacare hinges on the exchanges being able to enroll enough young and healthy individuals to offset the cost of covering older and sicker patients, particularly those with pre-existing conditions.

Given that Americans with higher medical costs are more likely to endure an arduous enrollment process than healthier individuals, sustained technological problems could be devastating to the program.

Right now, there isn’t enough data available to say whether insurers are achieving the right mix of enrollees. In the past, administration officials have said that roughly 40 percent of the expected seven million enrollees need to be from the young and healthy demographic.

But they have been mum about how many people have successfully enrolled through the federal website so far, saying that they won’t be able to make that information available until the middle of November.

For now, insurers are waiting for the federal system to start sending them a more robust stream of applicants so that they can begin to comprehend the scope of the problems.

But, if the technological issues don’t get cleared up in the next month (looking less likely) or if new problems arise once applicants get further along in the process (more likely), ObamaCare could turn out to be a bigger disaster than even its most ardent critics predicted.”

Assessing the Exchanges:

“The insurers are very, very worried about the viability of the exchange system—especially but not exclusively at the federal level.

One key worry is based on the fact that what they’re facing is not a situation where it is impossible to buy coverage but one where it is possible but very difficult to buy coverage. That’s much worse from their point of view, because it means that only highly motivated consumers are getting coverage. People who are highly motivated to get coverage in a community-rated insurance system are very likely to be in bad health. The healthy young man who sees an ad for his state exchange during a baseball game and loads up the site to get coverage—the dream consumer so essential to the design of the exchange system—will not keep trying 25 times over a week if the site is not working. The person with high health costs and no insurance will. The exchange system is designed to enable that sick person to get coverage, of course, but it can only do that if the healthy person does too. The insurers don’t yet have a clear overall sense of the risk profile of the people who are signing up, but the circumstantial evidence they have is very distressing to them. The danger of a rapid adverse selection spiral is much more serious than they believed possible this summer. They would love it if the administration could shut down the exchange system, at least the federal one, until the interface problems can be addressed. But they know this is impossible.”

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