9-30-13 8:05 AM EDT | Email Article

In a recent speech, Georgia Insurance Commissioner Ralph Hudgens said that to "solve" the "problem" of Obamacare, officials in his state are doing everything in their power "to be an obstructionist." The first part of that strategy? Refusing to run Georgia's exchange altogether. It's a tactic adopted by 34 states -- most of them led by Republicans -- often to express their opposition to the ACA. Instead, federal health officials took over in those states (plus in two others that asked for extra help their first year), hurrying to set up exchanges in hostile territory. As a result, those exchanges generally have fewer resources supporting enrollment and have encountered more setbacks than exchanges run by their own state, exchange analysts say. Politicians opposed to the health law have also created "new roadblocks to enrollment," says Melville of HealthLeaders-InterStudy, which published a report card for the state exchanges, assigning lower marks to states that have enacted anti-exchange regulations. In a recent survey by the Pew Research Center, 23% of Americans said elected officials "should do what they can to make the law fail."


By contrast, Democratic states running their own exchanges have invested more in marketing and supporting them, Tolbert says. Connecticut, for example, sent enrollment representatives to the state's public beaches over the summer, while Maryland partnered with the Baltimore Ravens to promote its marketplace. "That's a kind of readiness you can't get necessarily if the federal government is running the exchange," Melville says.


See also: The 50 states of Obamacare

-Jen Wieczner; 415-439-6400; AskNewswires@dowjones.com


6. "Abuse our honor system at your peril."


A key component of the Affordable Care Act is the ability for lower-income people to receive subsidies on health insurance they buy through the exchanges. People up to 400% of the federal poverty level are eligible. But after the Obama administration announced that it would delay till 2015 certain verification processes to determine whether people are eligible for the health insurance subsidies, analysts speculated that exchanges would rely on the honor system to calculate the subsidies for 2014. And of course, if people lie to receive money they don't deserve, experts say, that could make the ACA much more costly to implement.


But legal experts say that dishonesty is risky on the exchanges because the actual checks in place may be far more rigorous than an honor system. And besides the federal penalty for perjury, which is up to three years in prison, the ACA outlines additional consequences for falsifying income, with fines ranging from $25,000 for negligent misrepresentation to $250,000 for intentional misrepresentation, says Timothy Jost, a professor at Washington and Lee University School of Law who is studying the marketplaces and calls the idea of an honor system "nonsense." Even without the fines, people will owe the money back after they file tax returns.


See also: Before delay, most firms were ready for Obamacare


Of course, a few fraudsters may still get away unscathed, especially in 2014 before all verification mechanisms are in place, Jost says. After all, the IRS loses hundreds of billions of dollars every year to tax cheats. But the ACA may have even more safeguards than the IRS -- requiring verification of tax forms, Social Security data, and electronic wage information, according to the Centers for Medicare and Medicaid Services. "It's more likely someone is going to get caught cheating on this than on their small business taxes," Jost says.

-Jen Wieczner; 415-439-6400; AskNewswires@dowjones.com


7. "You'll still pay for this, even if you don't use it."


Americans who receive affordable health benefits through their employer aren't eligible for health insurance subsidies on the exchanges, so the company plan is almost always going to be a better deal than individual policies, just as it is today. But that doesn't mean people won't pay for the plans sold on the marketplace -- at least indirectly. A lesser-known ACA provision requires employers to pay fees that will go toward the cost of covering Americans who were previously uninsured -- often people who have chronic health conditions that will be very expensive to insure. "The assumption is, people who will be taking the coverage first are going to be the ones who are the sickest," says Helen Darling, CEO of the National Business Group on Health, which represents large employers.


That tax is known as the Transitional Reinsurance Program, and will charge health insurers and self-insured employers (that is, companies that provide their own insurance) $63 per person covered on their plans, with payments eventually tapering off as the exchange plans collect enough premiums to be self-sufficient. Employers and insurers, already saddled with their own rising health care costs, are likely to pass those fees on to consumers in the form of rate increases, Darling says.


See also: Why your boss is dumping your wife

-Jen Wieczner; 415-439-6400; AskNewswires@dowjones.com


8. "We're a magnet for hackers and con artists."


Government officials are cautioning consumers to beware of threats when attempting to buy insurance in the marketplace: Con artists attempting to swindle their money or steal their identity. "At the FTC, we know all too well how scammers invariably try to take advantage of developments in the marketplace and new government programs," Federal Trade Commission chairwoman Edith Ramirez said in a statement. While officials say they are not yet seeing large-scale fraud surrounding Affordable Care Act programs, previous federal benefits initiatives, including Medicare, have attracted criminals.


The concerns range from the security of the exchange websites to unscrupulous staff who may come into contact with consumers' information, to potential scams asking people to pay, say, $200 in order to sign up for health insurance. Scammers have already targeted the elderly with false Obamacare pitches by email or telephone.


Administration officials, however, say that the federal exchange website has advanced security systems to prevent breaches and punish unacceptable behavior. Officials are also telling consumers to know the rules, so criminals can't manipulate them: "If you have Medicare, you don't need to sign up for one of the marketplaces. You should not be asked to pay any advance fees in order to enroll in the marketplace."


See also: Have Medicare? Don't worry about Obamacare

-Jen Wieczner; 415-439-6400; AskNewswires@dowjones.com


9. "You might not be able to keep your doctor."


When the health law was being debated in Congress in 2009 and 2010, President Obama said that people buying insurance through exchanges would be able to keep their doctor. It turns out, though, that many plans strictly limit the network of doctors they pay for. Consumers can try to stay on their same plan or look for one that covers their doctor, but this might not be possible in some marketplaces, especially if their current insurer is not participating there. (Many uninsured people, of course, will be able to see a doctor for the first time as they gain health coverage.)


"The narrow-network plans are kind of the name of the game in health exchanges," Melville says. An analysis of exchange plans in 13 states by McKinsey & Co. found that nearly half of them had limited networks. Some people who currently have individual insurance and stick with their current policy may find that it becomes more restrictive after the insurer enters the exchange. Wellpoint's Anthem Blue Cross and Blue Shield has been criticized by state senators and consumers in New Hampshire, Indiana and Maine for excluding major hospitals from coverage, but a spokesman says the "narrower network" products, available on exchanges in 14 states, meet or exceed the ACA's standards for "convenient access," while also being affordable. Centers for Medicare and Medicaid Services official Gary Cohen says that many insurers are taking this tack because the limited-network plans can lower costs -- and are a "positive development" for health care.

-Jen Wieczner; 415-439-6400; AskNewswires@dowjones.com


10. "Competition is for the greater good -- except when there aren't any competitors."


Government officials have said that the exchanges will keep insurers' prices down by making them compete with each other. Prices on the exchanges have been lower than government forecasts, partially a sign of "healthy competition," Cohen says, and are generally lower in more competitive markets. So far, though, the marketplaces seem to be having another effect on major insurance companies, too: Scaring them away.


Large insurers like Cigna and UnitedHealth have abstained from many states' exchanges this year; Aetna has backed out of seven exchanges it originally applied to, instead "focusing on the markets where we can be most competitive and deliver the greatest value to our customers," a spokesperson says. In Mississippi, 36 counties would not have had any plan options if Humana had not joined at the 11th hour, Melville says. "There were concerns there would be coverage deserts, there would be places that you wouldn't be able to get a policy." This hasn't happened, but some states have so few carriers offering plans in the marketplaces that the lack of competition has kept rates high. West Virginia and New Hampshire, for example, currently have only one carrier for their entire states, respectively. Wyoming only has two, after most of the state's insurers skipped the exchange, and has the highest rates in the country. Analysts, however, say that there is likely to be more competition in future years: Insurers will wait and see how 2014 plays out and re-evaluate their strategies. Aetna, for one, says it is "taking a measured, multiyear approach to exchanges."

-Jen Wieczner; 415-439-6400; AskNewswires@dowjones.com


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09-30-13 0805ET

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