Obama healthcare law faces big challenges on third anniversary

Three years after President Obama signed his signature healthcare law, his administration is facing big challenges to make sure it works.

{mosads}Health and Human Services Secretary Kathleen Sebelius spent the past week touting the law’s benefits ahead of its third anniversary on Saturday. But HHS still faces a steep climb to fully implement the law — and sell it to a skeptical public.

HHS officials say they absolutely will meet the biggest and most imposing deadline — having new insurance exchanges up and running in 27 states by Oct. 1, to begin enrolling people in coverage that will take effect Jan. 1.

Building an exchange, even in one state, is an incredibly complicated task. It has to have a user-friendly website for consumers to compare complex insurance plans, and the back-end mechanics involve pulling together reams of data from several federal agencies.

Jay Angoff, a former director of HHS’ implementation office, said the system probably won’t be perfect by the Oct. 1 deadline.

“Something will be ready by Oct. 1,” Angoff said, but it might take longer for the federal exchange to become as fast or thorough as HHS would like.

The health law initially envisioned each state setting up its own exchange, under the assumption that states would want to retain control over their own healthcare markets. But Republican governors have resisted exchanges, forcing HHS to step in and handle the task in more than half the states.

Angoff said the heavy federal workload wasn’t a huge surprise, and that once HHS builds one exchange, it’s not especially hard or expensive to scale up to 26.

“No one ever knew the exact number, but we always knew there were lots of states that would not be operating their own exchanges,” he said.

What makes the job complicated is money. The healthcare law provides unlimited grants to help states set up their own marketplaces, but didn’t set aside any money specifically for the federal fallback.

HHS has had to scrape together funding from other sources, and the department had requested almost an extra $1 billion this year to help start up exchanges. But neither the House nor Senate included the additional funding in their spending bills.

Although the law’s basic survival was ensured by President Obama’s reelection, Republicans are still adamant about trying to repeal certain provisions. They demonstrated last week that more targeted votes can succeed, when the Senate voted along bipartisan lines to repeal the law’s tax on medical devices.

The repeal effort failed, but it’s a sign that the tax could be vulnerable if the GOP can demand another vote in the future. Repealing the device tax would take away about $30 billion in revenues to help pay for the cost of expanding insurance coverage.

Backed by the National Federation of Independent Business, Congress previously repealed a tax reporting provision that was also designed to raise money to cover the costs of the coverage expansion.

The law lost about half of its total deficit reduction thanks to a self-inflicted wound. HHS determined that it could not responsibly implement the CLASS program, which was intended to provide coverage for long-term care, such as nursing home stays. It gave up on the program, erasing billions of dollars CLASS was projected to bring in.

The Congressional Budget Office still projects that the health law, overall, reduces the deficit. But if Congress chips away at its new revenues while more benefits kick in, the math could begin to look worse.

The administration is also facing a public-relations problem. A Kaiser Family Foundation poll last week found not only that the law remains unpopular, but that people don’t understand what’s in it.

Fifty-seven percent of those surveyed said they don’t have enough information about how the law will affect them personally, and awareness is lowest among the people the healthcare law will benefit most.

Among the uninsured, 67 percent said they don’t have enough information about how the law will affect them, as did 68 percent of low-income respondents.

That’s a problem for the administration not just politically, but practically. It wants the law to work, and that will only happen if people take advantage of it.

Similarly, if unhealthy patients eagerly jump into new insurance plans that can’t deny them coverage, but young and healthy people don’t comply with the law’s individual mandate, premiums could rise and new protections would be undermined.

The administration and its allies, including a coalition group known as Enroll America, are planning a major publicity blitz this summer to raise awareness of exchanges, as well as the law’s Medicaid expansion, and encourage people to enroll.

State exchanges are also mounting their own publicity operations.