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Is America Ready for Obamacare?

Another sizable group of uninsured are illegal immigrants, estimated at five million or more. These individuals would not be eligible to participate in the exchanges under Obamacare, and would continue to be ineligible even under the Senate’s version of immigration reform. However, immigration-reform advocates are now pushing hard to get that provision changed.  Even if they fail, the president has shown recently that he can change immigration policy by executive order.

Overall, the number of uninsured who were locked out of the insurance market because of denial of coverage or high-priced policies was only a fraction of the total uninsured population -- probably less than 20% of the total uninsured, and less than 3% of all Americans.

Because this number was so small compared to the total population, the bill was sold as insuring coverage for 50 million Americans, even though 80% of this group, if not more, could already obtain insurance either through government programs or the insurance market. Many without insurance were simply unwilling to buy insurance.

That history of non-purchase decisions is a threat to the success of the Obamacare initiative, especially with regard to the new state exchanges. Those with incomes above the Medicaid eligibility limits can now purchase policies on the exchanges with guaranteed issue, and in many cases, with a partial subsidy from the federal government.

The big question: how many who have not bought policies in the past will choose to do so starting in October?

A second question: how many individuals now provided health insurance by corporations will soon find themselves needing to navigate the exchanges as a result of decisions made by their companies? Will their employers look to reduce their hours below 30 per week, or to terminate a corporate policy and dump all employees onto the exchanges?

The Obama administration recently announced that the employer mandate to provide health insurance for full-time workers (defined as those working over 30 hours per week) for companies with 50 or more employees would be waived for a year. As a result, the next year will be an opportunity for companies to move employees from company coverage to the exchanges, since the individual mandate to buy insurance is still scheduled to begin with the exchanges opening on October 1.

The  exchanges will likely offer attractively priced policies for those with pre-existing conditions who were denied coverage, or for those who could only buy very expensive policies or were stuck in group insurance plans whose cost increased rapidly from year to year. This is also likely to be true of older individuals too young to qualify for Medicare who have seen their health insurance costs rise rapidly in the individual market.