Insurers tire of 'frenemy' White House

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The health insurance industry can’t wait for ObamaCare’s first enrollment season to be over so that it can have a break from dealing with the White House, sources on K Street say.

Insurers feel that the administration has taken advantage of them by making repeated delays and changes to the law, even as they have gone above and beyond the call of duty to fix problems with the rollout.

The administration is nursing grievances as well, feeling insurers don’t have the best interests of consumers at heart and should temper their criticism as they do more to make the law work.

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The tensions between insurers and the White House were described to The Hill by five healthcare lobbyists, both Republican and Democrat, who requested anonymity to speak freely.

They said the constant back-and-forth between interest groups and the administration since last fall has left the participants tired and on edge despite outward signs of cooperation.

Insurers are said to communicate well with Medicare chief Marilyn Tavenner, an important official in the running of the exchanges, even as they disagree with her decisions. 

But ties with the White House apparently faltered somewhat after the January departure of Chris Jennings, a senior healthcare adviser to President Obama. 

The Obama administration  did not respond to a request for comment.

Prominent health insurance advocates are eager to highlight areas where the administration has worked with them, such as the recent adjustment to medical loss ratio rules.

But the latest extension of the enrollment period likely created new strain.

The Centers for Medicare and Medicaid Services (CMS) announced this week that people who tried but failed to obtain coverage on HealthCare.gov would be able to sign up past the current deadline of March 31.

CMS officials declined to say when the new cut-off date would be, adding to the frustrations of insurers that are trying to calculate rates for 2015. 

“They’re already doing it with limited information,” said Robert Zirkelbach, a spokesman for America’s Health Insurance Plans (AHIP).

“You’ve got to make sure that there is a firm end date for any special enrollment period. … Anything else creates greater uncertainty for health plans.”

The extension would also apply to people with special circumstances, like a medical emergency or domestic abuse.

To qualify, applicants would have to attest that they are eligible for an extension. CMS declined to state whether there will be a penalty for lying, or if the avowals will be audited.

Officials said the extension was designed to handle a late surge in enrollments around March 31. HealthCare.gov drew 1.1 million visitors on Monday, the second-most in a single day.

“Just like Election Day, if you are in line when the polls close, you get to vote,” a terse Julie Bataille, spokeswoman for CMS, told reporters Wednesday. 

“We won’t close the door on those who tried to get covered and were unable to do so through no fault of their own.”

Still, Health and Human Services Secretary Kathleen Sebelius had previously said that the six-month enrollment period was “extraordinarily long” and noted the importance of the deadline to insurers.

“It’s about six times as long as a typical generous open-enrollment period,” she told lawmakers in October at the height of problems with HealthCare.gov.

“And it’s important for the insurance partners to know who is in their pool so again they can stay in the market next year and know who they are insuring.”

Wednesday’s announcement of the extension garnered praise from consumer advocates and enrollment volunteers on the ground in the states. 

Ethan Rome, campaign strategist and former director for Health Care for America Now, dismissed insurers’ concerns as “absurd.” 

“It’s their job to roll with it,” Rome said. “This is a great law, it does great things for people, and when there have been challenges, they’ve been fixed. The insurance companies need to be part of the solution. That’s fundamentally the issue.”

Rome also noted the insurance industry’s projected earnings for 2014. 

While the ObamaCare rollout has made life difficult for insurance companies, major health insurance stocks have soared in recent weeks.

Wellpoint, one of the companies most involved in ObamaCare, raised its earnings forecast earlier this month from greater than $8 to greater than $8.20 per share. 

The company is participating in 14 of the insurance exchanges, more than many of its rivals. 

Other insurers stayed away from the ObamaCare exchanges this year, insulating themselves from the success or failure of the exchanges. 

For now, analysts estimate that revenue from the new federal system will account for less than 5 percent of insurers’ profits, on average. 

But experts said the last-minute changes from the Obama administration could drive up premiums for customers as insurers pass on the unexpected costs.

The industry consensus is that many firms will raise their rates by 10-12 percent next year to cope with the new market environment. 

One insurance industry official from a populous swing state recently told The Hill that his firm plans to triple its rates.

Nonetheless, experts note there are serious financial gains to be made for insurance companies in the ObamaCare marketplaces in the years ahead.

The Congressional Budget Office has forecast that by 2016, 6 million fewer people will obtain health coverage through their employer. 

While this figure includes people who simply turn down work-based health plans, it is likely to drive up enrollment in insurance through ObamaCare’s exchanges. 

Tom Scully, a former senior CMS official in the George W. Bush administration, said the marketplaces are not likely to drive profits in the short-term.

“But it’s dangerous not to get involved,” he said, pointing to companies that regretted their failure to participate in Medicare Part D at its inception. 

“It might take 20 years, but over time, most employers are probably not going to want to be in the health insurance business,” Scully said. 

“If you’re an insurer, you can’t afford to ignore that.”

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