Obamacare Rebounds After Shaky Roll-out

Millions enroll as website glitches are fixed

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Despite the much-publicized, rocky roll-out of the Affordable Care Act, about 8 million people signed up for health-care coverage under President Obama's signature law by the March 31, 2014, open enrollment deadline, exceeding the initial administration's goal of 7 million. In addition, 35% of those who signed up are under age 35. A young pool of enrollees is critical to keeping premiums low, and preliminary figures indicated an older demographic had dominated the early phase of enrollment.

It was a moment of vindication for the Obama administration, and he took great pleasure in announcing, "Armageddon has not arrived. Instead, this law is helping millions of Americans, and in the coming years it will help millions more." Nevertheless, Republican detractors of the act repeated their pledges to repeal the law and make Obamacare a centerpiece issue of the 2014 midterm elections. House Speaker John Boehner (R-Ohio) said in a statement that the law has wreaked "havoc on American families, small businesses and our economy."

Under the law, most Americans are required to carry health insurance, and those who haven't enrolled must pay a fee. For the first year, the fee will be whatever is higher: 1% of yearly household income or $95 per adult and $47.50 per child under age 18 with a family cap of $285. Fees will increase each year and will be paid when submitting tax returns.

The next open enrollment period began on Nov. 15, 2014, and will run through Feb. 15, 2015. It got off to a markedly better start compared to the first open enrollment period. For the first week of open enrollment in November 2014, some 462,000 people signed up for health insurance on the federal exchange, compared to just 27,000 the previous year. The Congressional Budget Office predicts that enrollment will reach 13 million in 2015 and 22 million in 2016.

Changes in 2014

The Obama administration continued to extend deadlines and delay mandates to make implementation of the law smoother and more manageable. In February 2014, it delayed the employer mandate, giving businesses with 50 to 100 workers until 2016 to offer coverage. This mandate was previously extended to January 1, 2015. In addition, changes to the law phased in the coverage requirement for employers with more than 100 workers. These companies must offer insurance to 70% of full-time employees in 2015 and 95% in 2016 and after or face penalties. The deadline for people with serious pre-existing conditions who are covered in high-risk pools—the Pre-Existing Condition Insurance Plan (PCIP)—was extended twice, first to Jan. 31, 2014, then until March 31, 2014, so they wouldn't experience a gap in coverage while shopping for new plans in federal or state exchanges.

As written, the Affordable Care Act would only extend subsidies to people covered under an approved exchange. However, because of problems with the federal and several state exchanges, some uninsured people turned to private insurance companies for coverage. In February, administration officials said they would offer the subsidies to some of people who bought private coverage, and the subsidies would apply retroactively to when they applied for coverage on an exchange.

As many as 5 million people were informed in 2013 that their policies were being cancelled and had to buy new ones on either federal or state exchanges. Policies were cancelled mainly because they didn't meet minimum standards set forth in the Affordable Care Act. In response to bipartisan criticism, he announced in Nov. 2013 that the cancelled policies would be reinstated for a year. In March 2014, the Obama administration extended that deadline into 2017.

Sebelius Resigns as Secretary of Health and Human Services

In April—after the open enrollment deadline had passed, Kathleen Sebelius resigned as secretary of health and human services. Both Sebelius and the Obama administration insisted the move was voluntary, but administration officials have done little to hide their outrage about the many problems that dogged HealthCare.gov and how they will affect mid-term elections and public opinion of Obama. Sylvia Mathews Burwell, the director of the Office of Management and Budget, replaced Sebelius.

Obamacare Tested in Court

The Affordable Care Act suffered a blow in June 2014, when the Supreme Court ruled 5-4 in Burwell v. Hobby Lobby that some closely held businesses with religious objections cannot be forced to pay for insurance that covers contraception for female workers because doing so is a violation of the Religious Freedom Restoration Act of 1993.

Two conflicting rulings handed down on July 22, 2014, jeopardized a key component of the Affordable Care Act. Both cases centered on the Internal Revenue Service rule that makes some people who buy insurance on federal exchanges eligible for subsidies. The rule says that subsidies are offered in exchanges "established by the State." In Halbig v Burwell, a three-judge panel in Washington, DC, ruled 2–1 that the federal subsidies are illegal because they weren't explicitly mentioned in the law. Thirty-six states did not create their own exchanges, forcing residents to enroll through federal exchanges. In the other ruling, King v Burwell, the panel in Virginia unanimously upheld the rule. In the decision, Federal Judge Roger Gregory wrote that the panel would not "deny to millions of Americans desperately-needed health insurance through a tortured, nonsensical construction of a federal statute whose manifest purpose, as revealed by the wholeness and coherence of its text and structure, could not be more clear." The Supreme Court announced in November 2014 that it would hear a challenge to King v Burwell. About five million people are covered under the federal exchanges, and millions could lose coverage or pay more for it.

—Beth Rowen