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Contrary to popular belief, Obamacare enrollment didn’t end Monday. In effect, it’ll continue indefinitely for tens of millions of people.
The original law let people facing certain unmistakable hardships qualify for “special enrollment periods,” or SEPs, so they could sign up for Obamacare at any point during the year. This was meant for people who hit hardships that knocked them off their coverage, like a lost job, a divorce or the death of a spouse.
But, like a lot of other Obamacare provisions, the White House has contorted these rules, sharply expanding the number of people eligible to sign up after the open-enrollment period.
For Obamacare’s target customers, enrollment season never actually ends.
The reason for having a defined enrollment period is to give people incentive to buy insurance before they get sick. Otherwise, thanks to Obamacare’s other guarantees, there’s little reason to even shop for a health plan until you start accruing medical claims.
And if few healthy people sign up, the price of health insurance will skyrocket.
Nonetheless, the administration issued regulations that greatly increase the number of people who can ignore the open-enrollment deadline. Many can sign up whenever they want.
One key provision says that a person is entitled to a “special enrollment period” if he or she merely has a “change in eligibility for cost-sharing reductions.” This doesn’t mean you have to suddenly become eligible for Obamacare subsidies; it’ll suffice if your income changes enough that you qualify for a slightly different subsidy.
This could include anyone whose income makes him or her eligible for these cost-sharing subsidies, which kick in for people earning below 250 percent of the federal poverty level (for a family of four, that means less than $58,000 a year in household income): You’d just have to claim your income rose or fell, changing how much subsidy you’re entitled to. Under this rule “tweak” alone, enrollment season could extend indefinitely for more than 25 million households.
Other reasons for a special enrollment period are hopelessly vague: You’ll get one if your existing coverage at work “will no longer be affordable,” or if you can demonstrate “other exceptional circumstances.”
The drafters of that last exception hinted at some such circumstances: It might, they wrote, include someone enrolled in a catastrophic health plan who gets pregnant and thus wants more comprehensive coverage.
Analysts seem to be taking notice. A Morgan Stanley report last week notes that “we expect to see significant churn between eligibility levels throughout 2014 that could trigger SEPs.” A recent article posted to Health Affairs predicts that “about as many people will become newly eligible for marketplace coverage over the course of 2014 as are currently eligible.”
Once the deadline passes for “open” enrollment seasons, expect to see organized campaigns to sign people up through these special enrollment provisions. Providing these kinds of loopholes for more people to get coverage whenever they want to enroll might sound like a good idea, but it comes at a hefty price.
By systematically eroding the controls on its own insurance market, the White House has made Obamacare less attractive to all but the old and sick. Next year’s Obamacare premiums will be unveiled this month, and they’re going to spike as a consequence. The White House will surely fault insurers, its go-to bogeymen, but Obama health officials will have only themselves to blame.
Dr. Scott Gottlieb is an American Enterprise Institute resident fellow. He consults with health-care companies.
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