AP

Two developments today should make health insurers very worried.

First, Amy Goldstein, Juliet Eilperin and Lena H. Sun report in the Washington Post that the administration is unlikely to have the exchange website functioning for most Americans by December 1st. Jeff Zients, who took command over the site in October, emphasized that " Healthcare.gov will work smoothly for the vast majority of users." That seems unlikely at this point.

This is a big issue for insurers, because the worse the website is, the more susceptible they are to insurance pools composed mostly of high-risk beneficiaries. Old, unhealthy people, particularly those with pre-existing conditions, are most likely to spend hours on Healthcare.gov waiting for it to work. They are the ones who benefit most from the law and are eager to sign up for their new plans. Young, healthy people will see much less of a need to do so. They will wait until the site is working and can complete their signup in a few minutes.

The problem for insurers is if the site doesn't work for most users, then the majority of people signing up will be old and unhealthy. This will skew their risk pool towards more expensive customers and drive up costs. The law includes provisions to offset some of this risk, but it is still a major, unexpected headache.

Second, Sen. Jeff Merkley (D-OR) became the second liberal Democrat (along with Sen. Dianne Feinstein) to sign on as a co-sponsor to Sen. Mary Landrieu's bill to fix Obama's "if you like your health plan, you can keep it" lie. The legislation grandfathers in all health plans up until January 1st, 2013, as Rep. Fred Upton's bill in the House does, but it takes it a step further. Landrieu does more than just allow insurers to continue offering health plans to current beneficiaries. She requires them to do so.

Besides the fact that this plan is likely technically infeasible, it also is a massive government intervention into the insurance market. Many insurers cancelled plans because they were filled with high-risk people. They would now have no choice to continue offering them. Others, like United Healthcare in California, have pulled out of the state individual insurance market altogether; they would now be forced back in, unless they choose to also exit the much-larger group insurance market.

When Landrieu's legislation was supported by mostly red-state Democrats who were up for re-election in 2014, insurers had little to worry about. It was all politics. But now, with Landrieu and Merkley as co-sponsors, this bill just gained mainstream Democratic support. It's unclear what its chances are in the House, but its momentum is building.

Insurers have largely been quiet the past month and a half as the administration tries to get the website working. Everyone involved has the same goal so insurers have seen little value in publicly criticizing the White House. But it's becoming increasingly likely that insurers will face an unexpectedly expensive pool of beneficiaries in their plans and that any legislative fixes to the law will come at their expense. So far, they've stuck by the administration. That could change in the near future.





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