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Who's Piling On? Procrastinators May Make or Break New Exchanges

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At least two million people have signed up for health insurance in the last month on the new online exchanges, according to the federal government. It’s a huge last-minute flood, one the Obama administration is hoping will make up for the dismal roll-out that kept people from enrolling last October when they opened.

And the government's woes continued - the federal website crashed again on Monday morning.

Charlie Elizondo is one of the procrastinators. He got signed up on Friday afternoon, just three days before the deadline. "I am signing up for the one month because my employer is going to have enrollment for May," Elizondo, a 28-year-old nurse, told NBC News.

Elizondo has never had health insurance before, even though his employer offers it. "I'm in pretty good health. I wouldn't say I have very extensive health issues," said Elizondo, who lives in San Antonio, Texas.

So why sign up for just a month? Why not wait until his employer's open enrollment period?

"I do not want to take the penalty, which is I believe is $95 or one percent of your income, whichever is greater," Elizondo said. "I am in that one percent." So he got one month of catastrophic-only coverage, which will cost him $112.

"I am happy that I have insurance and I have that burden off my shoulders," Elizondo said. "But I am not happy my enrollment through work was so close."

Insurance companies are hoping the last-minute enrollees are like Elizondo — young and healthy, so they’ll pay premiums without making much use of medical care.

The administration hopes so, too, just for the success of the exchanges. For the idea to work well, insurers must be able to keep premiums as low as possible. They can’t do that if they get a stack of customers who are all sick and go to the doctor or to the hospital a lot in the first months they have insurance.

"I think both opponents and supporters of the law agree that the people who have health conditions, the people who need insurance the most, are the people who signed up first," said Jay Angoff, who once headed the agency that set up the exchanges and who is now at law firm Mehri & Skalet, PLLC. "I would think that the people signing up at the end are overwhelmingly in pretty good health."

The standard equation is for 40 percent of new enrollees to be between 18 and 34. The latest statistics show only about 25 percent of new signups are in this age group. It may be a few weeks before there is a breakdown of the two million-plus who have signed up in this final month, and it’s likely to vary from state to state.

"I would think that the people signing up at the end are overwhelmingly in pretty good health."

But be assured that insurance companies offering policies on the exchanges are checking those statistics right now. They are already trying to figure out what kind of policies to start offering in November, when open enrollment starts for 2015.

“It’s going to rush right to the end,” said Susan Millerick, a spokeswoman for Aetna, which is offering plans on 17 of the exchanges.

While the health law covers the whole country, the exchanges themselves are specific to each state. The federal government is running the exchanges for 36 states via HealthCare.gov. But each exchange must follow the insurance laws of the state it is in, and the insurance companies enroll customers from a statewide pool.

And the pools and policies will be different in the 14 states running their own exchanges, plus Washington, D.C., which is, too.

It’s especially tricky for them because 2014 is the first year insurers have had to take all comers. In years past, insurance companies could turn people down if they had pre-existing conditions, or they could refuse to cover care for a disease, condition or injury that someone had before they had the policy. Not any more.

Nor can they cap coverage. These were business methods insurers used to keep their costs down. But the Obama administration calls them abusive practices, and the 2010 Affordable Care Act was designed to put an end to them.

In return, the insurance companies demanded, and got, the individual mandate. So while plenty of people are getting exceptions this year — people who couldn’t get signed up in time, who have incomes too high to qualify for Medicaid but too low to get subsidies, who have encountered other difficulties — they won’t continue indefinitely. The insurance companies and the administration want to maximize signups so more people are paying premiums.

The first few weeks of data showed that most people signing up for health insurance on the exchanges were middle-aged. Karen Ignani, of America’s Health Insurance Exchanges, hopes that will change.

“What we hope we see on April 1 is a large number of individuals who are healthy joining in March," Ignani said in a recent interview on C-Span.

“We won’t really know that until after April,” Ignani added. “We had expected that the healthier people would probably wait until the last bit of time to sign up and join the health insurance pool, so we have to see now what happens.”

It’s not helping that the federal government and some, but not all, of the states are letting the March 31 deadline slip a bit. “I think that what the company is really after is just to have clarity around, these are the dates, these are the rules,” Aetna’s Millerick said. “We do want a firm cutoff date for the special enrollment.”

And once coverage starts, consulting firm Avalere Health says people may get some unpleasant surprises. While the federal government is heavily subsidizing premiums for many, if not most, enrollees, other charges may be higher than people expected. “Consumers may be surprised to face significant cost-sharing and may learn their doctors and pharmacies are considered out-of-network,” Avalere advises.

"We do want a firm cutoff date for the special enrollment.”

But it also notes that the Centers for Medicare and Medicaid Services, which is running the exchanges, is taking notes and may tweak some of the regulations.

It’s important for people to like the health exchanges. More than 45 million Americans have no health insurance at all now. Even if all 6 million new patients came from this group (and they clearly do not) that would make only a small dent in the number of people who are uninsured. And the main goal of the 2010 Affordable Care Act was to get more people covered.

But surveys show it isn’t popular. An Associated Press-GfK survey finds only 26 percent of Americans support the Affordable Care Act. But a different survey by the Rand Corporation found people have changed their minds just over the past week. Their survey of 5,500 people who have been answering questions week after week shows that 39 percent have a favorable view of the law, and 51 percent an unfavorable view.

That compares to 53 percent who said they had an unfavorable view the week before, and just 32 percent who said they had a favorable opinion. So things may be shifting.

One thing everyone can count on is hearing a whole lot more about the law and the exchanges over the next few months. It’s an election year, and the Republicans have promised to campaign against Obamacare.

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