WASHINGTON, D.C. — Even with its health insurance marketplace floundering for the fourth week, the Obama administration is resisting what some Democratic allies contend is the most logical response to the problem: giving consumers more time to sign up.
According to insurers and the White house, delaying the deadline could undermine efforts to lure a broad, young and healthy mix of consumers to the market. That would end up costing insurers, and possibly taxpayers, money.
The case against delay was outlined in a memo circulated to lawmakers by the insurance lobby last week. The document from America’s Health Insurance Plans warned that delay could have a “destabilizing effect on insurance markets, resulting in higher premiums and coverage disruptions for individuals and families.”
For now, the administration is sticking with the insurers. Health and Human Services Secretary Kathleen Sebelius on Wednesday called delaying the tax penalties for those who miss the deadline premature. Testifying before a House committee, Sebelius said she was confident the site would be running smoothly by the end of November, giving consumers four months to enroll easily online before the deadline of March 31.
President Barack Obama made the case in Boston, where he argued that the model for his health care law — the 2006 Massachusetts law that then-Gov. Mitt Romney pushed through — experienced a similarly slow rollout and went on to success.
There is more than policy keeping the administration from pursuing what some contend is a simple fix. House Republicans have long pushed to delay the mandate. Any concession on the point would hand another “I told you so” moment to the GOP only weeks after the White House and Democrats watched the government shut down rather than agree to Republicans’ demands to suspend the mandate for a year.
Still, the politics of the issue could change quickly as Democrats face pressure to show they are responding to public frustration with the website. Ten Democratic senators have signed a letter asking the White House to extend the date beyond March 31 — six of those are up for re-election in 2014.
Sen. Jeanne Shaheen, D-N.H., said an extended enrollment was merely a fair way to make up for a website rollout she labeled a “disaster.” Millions of people have been shut out of the site intended to link consumers with private health plans. “That is unacceptable; consumers should not pay a penalty because a website did not work,” Shaheen wrote in an op-ed published Wednesday in USA Today.
Advocates for the extension note that the administration has already pushed back the date by six weeks in an attempt to align mismatched deadlines outlined during the rule-making process.
Another limited extension is unlikely to change consumer behavior much, some experts opposed to a delay concede.
“To change sends a message: Don’t worry about signing up quickly. So there is an impact, but it depends a lot on how long an extension it is,” said Linda Blumberg, a health policy expert at the Urban Institute.
Blumberg said it was too soon to know whether an extension was necessary. Any decision should come only after insurers know who is signing up and whether they are seeing too many sick customers to deliver on the premiums they’ve promised. There are two major provisions already built into the law to help insurers adjust for risk pools, she said.
Obama advisers made similar arguments. Extending the enrollment period by a few months or a year increases the possibility that people won’t sign up until they’re too sick, increasing the costs for everyone else, said Chris Jennings, a former adviser to President Bill Clinton now working on Obamacare implementation.
Enforcing the requirements for insurers without enforcing those for individuals would compound the destabilizing effect, Jennings said.
“No one will sell you house insurance when your house is on fire,” he said. “If you want to ban discrimination against people with pre-existing conditions, then you have to have everyone in the pool. That’s why you need the individual responsibility requirement.”
Critics of the president’s law are reviving the push to undo the mandate. Romney issued a statement Wednesday suggesting a number of changes, including “carefully phasing it in to avoid the type of disruptions we are seeing nationally.”
In support of the Obama plan, some former Romney advisers have stepped forward to counsel patience through what they suggest is just a rocky beginning.
The law ramped up slowly in Massachusetts, said Jonathan Gruber, a Massachusetts Institute of Technology economist who has advised Romney and Obama on health care reform.
In the first month of enrollment in 2006, he said, only 123 enrollees from the premium-paying population — comparable to the group using the marketplaces created by the Affordable Care Act — signed up. That represented fewer than 1 percent of those who eventually signed up within the enrollment period.
“The fact that people aren’t signed up now for a policy they can’t even get until January, and which they’re not mandated to have until March, is not at all interesting or important,” Gruber said on a White House conference call held as Obama prepared to travel to Boston. “What matters is the fact that it will ramp up, and it will ramp up over time.”
The arc of enrollment in Massachusetts suggests that the deadline itself plays an important role, he said.
As the program neared the deadline, he said, “you saw an enormous increase in healthy people signing up.”
In their push on Capitol Hill, insurers are arguing that the March 31 date is crucial to the assumptions they used in developing the premiums they are offering at healthcare.gov.
According to America’s Health Insurance Plans, the industry group, changing these “vital enrollment incentives” would mean the premiums that health plans filed for next year would have to increase to account for fewer young and healthy people signing up for coverage. Insurers must determine the premiums for 2015 in April, a deadline that would be hard to meet without knowing who had signed up in 2014.
“Extending the open enrollment period would also drive up the 2015 premium rates,” the group’s document says, “as health plans would have to start submitting premiums to regulators before knowing who is enrolled in their insurance plans.”