Top U.S. insurer sees weak Obamacare sign-ups, prepares for delay


(Adds UnitedHealth Group comment in 5th paragraph)

By Caroline Humer and Susan Cornwell

Nov 6 (Reuters) - A top U.S. health insurer gave the firstdetailed view of how the problem-plagued rollout of PresidentBarack Obama's signature healthcare law is affecting theindustry, saying on Wednesday it had cut its enrollmentforecasts by at least a half and expected the government todelay the sign-up deadline.

Humana Inc said that because of technical problemspreventing millions of Americans from accessing the website since it opened on Oct. 1, the companyhad slashed its expectations of signing on 500,000 new planmembers to an estimate of closer to 250,000.

The open enrollment period ends on March 31, and Republicanand Democratic lawmakers are asking the Obama administration togive people more time to sign up for plans offered in onlinemarketplaces. U.S. Health and Human Services Secretary KathleenSebelius rejected the idea at a Senate hearing on Wednesday.

"We are still at the beginning of a six-month openenrollment that ends at the end of March, and there's plenty oftime to sign up for the new plans," she said.

UnitedHealth Group, the largest healthcare insurerin the United States, said on Wednesday it would work with thefederal government "if a decision is made to allow individualsmore time to sign up."

The insurance industry has lobbied against an extension thatwould include delaying the law's penalty for Americans who donot obtain coverage by the end of March, saying it would leavethem with a heavier concentration of sicker, costlier patients.That would create even greater business losses and higher pricesfor consumers down the road, and could require the federalgovernment to come in and cover some of the damage.

But Humana said on Wednesday it was assuming a delay at thispoint, and that it already cut its view for profits from the newbusiness that it had expected from healthcare reform.

"We're waiting for guidance from the government aroundwhether they are going to change mandates and whether they aregoing to do things to extend the enrollment period," HumanaChief Operating Officer Jim Murray said during a call withinvestors to discuss quarterly results.

"Given where we're at today, our assumption is that therewill be an extension to the open enrollment period," he said.

The 2010 Affordable Care Act, also known as Obamacare,mandates that everyone have health insurance coverage or pay afine. It also set up online exchanges, or marketplaces, formillions of uninsured Americans to enroll.

Sebelius said that the agency was updating enrollmenttargets, one of which called for about a million people to signup through December. "I can tell you, our early enrollmentnumbers are going to be very low."

The Obama administration has not made enrollment data publicsince the new insurance marketplaces opened, but is expected toprovide figures next week. As many as 7 million Americans wereexpected to sign up for coverage, according to the CongressionalBudget Office.

The problems at, which serves consumers in 36states, have cast doubt on whether enrollment will come close tothat forecast, or include some 2.7 million young and healthyAmericans that the government says are needed to offset the costof sicker beneficiaries and keep Obamacare financially viable.

The administration says it is working around the clock tohave working smoothly by Nov. 30 so that peoplecan sign up in time for coverage on Jan. 1. Humana is offeringplans through the site in 12 states, including Florida andTexas, home to a large concentration of the uninsured. It alsosells coverage on state-run exchanges in Kentucky and Colorado.


While Republicans have opposed the healthcare law all alongas an unwarranted expansion of the federal government andcriticized the website rollout, some Democrats are also callingfor a delays in aspects of the law. They include Senator JoeManchin, a Democrat from West Virginia who wants a delay in thesign-up penalty in 2014 and Senator Jeanne Shaheen of NewHampshire persuaded nine fellow Democrats to join her in urgingthe administration to extend the enrollment period.

"We think that the administration has the authority to act(to extend the deadline) without additional legislation, butthat's always an option," Shaheen told a Reuters reporter in aCapitol Hill hallway earlier in the week.

Robert Zirkelbach, spokesman for industry's main lobby groupAHIP, said this week that a delay of one year "could have adestabilizing effect on insurance markets, resulting in higherpremiums and coverage disruptions."

This would mean a smaller and sicker insurance pool for thehealth plans being offered, increasing the costs to insurers andresulting in them raising rates for 2015 or dropping out. Itcould also put the federal government on the hook for coveringsome insurer losses under the law.

Paul Ginsburg, president of the Center for Studying HealthSystem Change in Washington, said that the administration'sinsistence against a delay "means that they appreciate thedamage that such a delay would do, and don't want to do itunless it's necessary."

Douglas Holtz-Eakin, president of the American Action Forumand former advisor to Republican Senator John McCain, saidincreasing delays could also work against the goal of signing upmore people.

"It sends the signal that this isn't working," he said."That's not an appealing reason to go sign up." (Additional reporting by Lewis Krauskopf, David Morgan andRoberta Rampton; Editing by Michele Gershberg and Grant McCool)

View Comments (7)