Anyone who has been following closely the development of health insurance exchanges knew that setting Oct. 1 as the launch date for HealthCare.gov was an incredibly ambitious, if not entirely unrealistic, goal. But for an entire month to pass and the site be largely unavailable to millions of Americans? Not even a panel of industry insiders could have predicted that.

Speaking last week to members of the Nashville Health Care Council, representatives from the payer, provider, vendor and government sectors said that, despite a plethora of problems, there is still time for the U.S. Department of Health and Human Services to get the site up and running. But that time is running short. If HealthCare.gov is not working by the end of the month, the consequences could be devastating?not only for the exchanges, but for foundational elements of the Affordable Care Act.

?If it's not up and running by Nov. 30, I think we?re in trouble,? said Charles Kahn III, president and CEO of the Federation of American Hospitals. It was one of the few times during the hour-long discussion that Kahn's fellow panelist and natural adversary, America's Health Insurance Plans Executive Vice President Daniel Durham, nodded in agreement. ?The product is ready. It's on the shelf. The problem is enrollment,? Durham said.

Why Nov. 30? That's the self-imposed deadline set by Obama officials for having HealthCare.gov functioning ?smoothly? for the vast majority of users. But it's not an arbitrary date, a neat spot on the calendar that rolls off the tongue in speeches and media reports. Nor is it a reasonable amount of time to correct what we now know are widespread problems embedded in the site's core program, not mere technical glitches in need of a reboot. In fact, Nov. 30 holds important and long-term implications for consumers, payers and providers.

Here's why: The ACA requires individuals to have health insurance beginning Jan. 1, 2014, or pay a penalty. It also requires health insurance companies issue policies to anyone who applies, even those with pre-existing, potentially expensive medical conditions. For the math to work, large numbers of young, healthy, previously uninsured individuals must sign up for coverage, since their premiums will help cover the claims of individuals whose income or health status currently puts insurance out of reach.

But these ?Young & Healthies? don?t have much incentive to purchase health insurance. Generally speaking, their medical costs are low, as is the penalty for not having coverage. (For 2014, the penalty is $95 or 1 percent of income, whichever is greater, although it increases over time.) Assuming you can convince a Young & Healthy to even go to HealthCare.gov, what are the chances they?ll go back a second time, or a third time, or a fourth time, until the site allows them to take an application to completion?

?Young and Healthies don?t have a lot of patience for technology that doesn?t work,? said Julie Mix McPeak, commissioner for the Tennessee Department of Commerce and Insurance.

Rates for health plans offered on Tennessee's federally facilitated health insurance exchange are among the lowest in the country, but those rates were calculated based on enrollment starting Oct. 1, 2013, for coverage that takes effect Jan. 1, 2014. If HealthCare.gov is up and running by Nov. 30, those calculations could still hold up. Beyond Nov. 30, the projected risk pool not only gets smaller, but also older, sicker and more expensive as only those individuals with chronic or severe medical conditions persevere through the obstacles to obtain coverage. Insurers will be forced to raise their rates for 2015, making coverage even less attractive to Young & Healthies, creating potential solvency issues for insurers and what McPeak calls a ?death spiral? for rates.

At the very same time, the first wave of cancellation notices is hitting individuals who currently have insurance, but their plans don?t meet the minimum requirements of the ACA. Insurers now have a narrow window of time to get those individuals into alternative plans. But with HealthCare.gov not functioning, it's difficult for individuals to know exactly what those alternatives are. Some currently insured individuals may decide to forego coverage and pay the penalty, increasing the number of uninsured in direct contradiction to the key tenant of the ACA.

So why not just delay the requirement that individuals have health insurance beyond Jan. 1, 2014? Or better yet, extend the open-enrollment period for the exchanges beyond March 31, 2014? Again, the math doesn?t work, according to the American Academy of Actuaries. In a letter last week to members of Congress, the academy warned that either approach could mean premiums will be insufficient to cover claims and lead to higher premiums in 2015.

?The adverse selection as a result of delaying these provisions could affect not only the risk pools and claims in 2014, but also the premiums for 2015, since enrollment information from 2014 would factor in to the development of 2015 rates,? said Cori Uccello, the academy's senior health fellow.

Even before the HealthCare.gov debacle, insurers were already at a disadvantage in setting 2015 rates, which must be submitted to state insurance departments for review in early April. That means insurers will be calculating their rates in February and March, before the open enrollment period for exchange plans is set to close. If the site isn?t functioning by Nov. 30, insurers will have an ever more narrow and lopsided sample to use in calculating their 2015 rates.

Taking all of these factors into consideration, Nov. 30 is less of a target for having HealthCare.gov up and running and more of a deadline. And the consequences of not meeting that deadline are severe.

Follow April Wortham on Twitter @aprilworthamHL

What drives the therapy selection test market?

View Now