All in a New York Minute

Perhaps you are also struck by the irony of shutting down the federal government, in part, in an effort to derail the Affordable Care Act just at the time that the cannot-be-derailed opening of the ACA's health insurance exchanges is occurring.  That said, pretending the exchange openings are derailed may be an interesting strategy. Perception is everything, or so they say.

In light of that, I take an interest in very early reports that New York's Exchange has crashed — overwhelmed by demand. Now, it is an open secret that CMS has been, sotto voce, advising advocacy groups to steer eager exchange enrollees away from all trying to access the system the minute it opens. Of course, the system was not designed for everyone to crowd in at once. Seen from one perspective, this is a failure of communication.

Seen from another, we have a little evidence that New Yorkers know a good deal when they see it and that scarcity can produce extreme reactions in the face of plenty (as scholars of obesity and public health can tell you at length).  

Why the rush of the New York crowd to enroll in a New York minute?

First, New York has done extensive public outreach and education to publicize the exchanges, although counter-detailing has also been prominent. The press has also been vocal. You can see the Daily News' "how to" enrollment guide here: http://www.nydailynews.com/life-style/health/guide-obamacare-affordable-care-act-open-oct-1-article-1.1471102  And you can see the Heritage Foundation's Manahattan counter-advertising here:  http://www.chicagotribune.com/news/columnists/ct-reu-usa–jpg-20130920,0,1248662.photo.  Still, on the principle that all advertising is good advertising, anything that raises the profile of the ACA may serve, in part, to drive traffic to the New York exchange, though I am pretty certain whoever rationalized the cost of a billboard buy on 42nd street for counter-advertising had a different analysis.

Second, it is worth considering whether certain characteristics of the New York exchange have made it particularly attention-grabbing. To understand this, you need to know that for decades New York has had some of the highest individual market premiums.  (Indeed, to understand much of the ACA, it is useful to understand the status quo ante of health insurance in the United States.) This is because, since 1993, New York has had a mandate for guaranteed issue without an individual mandate.  A second important fact is that New York State requires full community rating, which means everyone buying the plan pays the same premium, regardless of age. This state option  is quite unusual.

So, who is crashing the system in New  York?  My guess is that refugees from the individual market — particularly older refugees from the individual market. They have much to gain from New York exchange pricing under the individual mandate.

If I am even remotely correct,  older New Yorkers under the age of 65  ( "non-elderly" to use insurance lingo where everyone over 65 is elderly) who have experienced scarcity by being priced out of the individual market are disproportionately  crowding forward today. Now, the system needs younger enrollees to balance them out.

It is, in short, significant that the system may have crashed under the weight of the long-excluded seeking to enter the system but it is the full scope of enrollment (through March of 2014) that will tell us if all New Yorkers are onboard.  This effort to achieve public buy-in is, from this perspective, a distance event and not a sprint.