Obamacare's first month signup target could fall short

WASHINGTON For the first month alone, the Obama administration projected that nearly a half million people would sign up forthe new health insurance markets, according to an internal memo obtained by The Associated Press. But that was before the markets opened to a cascade of computer problems.

If the glitches persist and frustrated consumers give up trying, that initial goal, described as modest in the memo, could slip out of reach.

The Sept. 5 memo, for Health and Human Services Secretary Kathleen Sebelius, lists monthly enrollment targets for each state and Washington, D.C., through Mar. 31, 2014, the last day of the initial open enrollment period under President Barack Obama's health care overhaul.

The new online insurance markets, called exchanges in some states, are supposed to be the portals to coverage for most of the nation's nearly 50 million uninsured people. Middle-class people without job-based coverage can shop for subsidized private plans, while low-income people are steered to an expanded version of Medicaid in states that have agreed to expand that safety net program.

Although the Oct. 1 launch of the markets was a top priority for the White House, the rollout was quickly overwhelmed by computer problems, and many potential customers still have not been able to enroll. Insurers say signups are coming through, but slowly.

A surge of interest by consumers going online appeared to trigger the problems, which also seem to involve underlying software flaws and design shortcomings undetected or overlooked in testing. The administration is holding the explanation close, while working feverishly to fix the glitches - with incomplete results so far.

In the memo, officials estimated that 494,620 people would sign up for health insurance under the program by Oct. 31. And that was portrayed as a slow start.

"We expect enrollment in the initial months to be low," said the memo, entitled "Projected Monthly Enrollment Targets for Health Insurance Marketplaces in 2014."

A big jump was expected after Thanksgiving, since Dec. 15 is the last day people can sign up so their coverage will take effect Jan. 1. Starting in the new year, the health care law requires virtually all Americans to have insurance or face fines. At the same time, insurance companies will be forbidden from turning away people in poor health.

The memo projected enrollment would reach 3.3 million nationally by Dec. 31.

Signups were expected to spike again in March, as procrastinators noticed the approaching end of open enrollment season. "We anticipate a surge of enrollment in December and March," the memo said.

By the end of March, total enrollment through the markets was expected to surpass 7 million, an estimate originally from the nonpartisan Congressional Budget Office and then used by the administration as the foundation for its projections.

With 15 days to go this month, the Obama administration has not released any enrollment numbers for the 36 states where the federal government is taking the lead in running the markets.

The 14 states running their own markets, along with Washington, D.C., have released some data. But it's hard to discern a clear pattern, since the reporting dates are different from state to state.

California reported 16,300 applications processed as of Oct. 5. The memo projects 91,000 people will enroll in the state by the end of the month.

Kentucky reported 18,351 applications processed as of Oct. 9. That would exceed the memo's projection of 15,400 for the month.

Washington state reported 24,949 applications processed as of Oct 14, a little more than the memo's October projection of 23,800.

Maryland reported 566 applications processed as of Oct. 6, compared with 10,500 projected for the month by the memo.

Like all projections, the HHS estimates come with a caveat: They represent an educated guess, and reality could turn out differently. They were arrived at by taking the congressional estimate, breaking it down by state, and then applying an expected monthly signup rate.

There are several reasons why enrollment numbers are important for the overall success of the law.

Most people spend relatively modest amounts on medical care each year, and a small proportion of patients accounts for the overwhelming majority of costs. Since older, sicker people are expected to enroll as the law lifts barriers that now keep them from getting insurance, premiums from lots of younger, healthier people are needed to help offset those costs.

Also, state numbers are as important as national totals. That's because each state's insurance market will remain separate under the law. "Obamacare" doesn't create a one-size-fits-all national program - like Medicare - but a bunch of state programs. That means lots of young healthy people signing up in California, for example, cannot cross-subsidize older, sicker people in another state.

"You can bust through these targets, but if it's mostly older and sicker people, then you are not in good shape," said Larry Leavitt, a health insurance expert with the nonpartisan Kaiser Family Foundation.