Published December 12, 2013
Another Obamacare deadline was pushed back on Thursday and now the White House is asking insurers to accept late payments and still give individuals coverage in the interim.
The Department of Health and Human Services extended the deadline for individuals who want to be covered on the first of the year to Dec. 31 from Dec. 23.
HHS is asking insurers to accept payments through this extended date and give consumers additional time to pay their first month’s premium while still offering coverage starting on Jan. 1
The department also said more deadlines could be bended later and it is “considering moving the deadline to a later date should exceptional circumstances pose barriers to consumers enrolling on or before December 23.”
Under the ACA every individual in the country must have insurance by the end of open enrollment period, on April 1, 2014, or they will face a fine of $95 a year, or 1% of their annual income for failing to comply with the law.
The announcement comes a day after the administration announced 364,682 Americans had selected an insurance plan on the marketplaces since Oct.1. far below initial enrollment forecasts. The number includes people who may or may not had yet paid their monthly premium. It’s standard practice in the insurance industry to only consider a person as covered once he or she has paid the first month’s premium.
Of the total amount of enrollees, 227,478 had enrolled via the 16 state-based marketplaces and 137,204 on the federal exchange on Healthcare.gov, which serves 36 states. The figures were far off base from the 3.3 million the administration projected in September it would have enrolled by the end of December.
The Obama Administration also originally aimed to have seven million people enrolled in year one of the ACA, 2.7 million being young and healthy policyholders that are needed to keep premium costs down.
Yevgeniy Feyman, Manhattan Institute scholar, says that while the pushback is not shocking, it could be risky for both consumers and insurance companies.
“The administration needs this [law] to work, so they want to give it as much time as humanly possible,” he says. “Whether that means people have coverage or not, is something else. If someone goes on the exchange on Dec. 31 and signs up for coverage at 11 p.m., I find it hard to believe that on Jan. 1 they will have coverage.”
Under the ACA, the enrollment requirements had previously been that individuals had to enroll in a plan by the 15th of a month in order to have coverage kick in by the 1st of the next month.
The latest pushback also comes after a glitch that was confirmed last week by CMS, that the back-end mechanism that allows the government to pay insurers for subsidized and cost-sharing plans had not yet been built. Insurance companies will have to bill the government for these premium tax credits, and the government has announced it will act in a timely manner.
Feyman doesn’t rule out another delay in the future, and that this latest postponement undoubtedly puts insurance companies in a precarious position.
“This screws insurers,” he says. “I don’t know any insurer that can get coverage ready to go in one day.”