Which each passing day, we learn how much worse Obamaware is than advertised. In Thursday's Wall Street Journal.
Insurers say the federal health-care marketplace is generating flawed data that is straining their ability to handle even the trickle of enrollees who have gotten through so far, in a sign that technological problems extend further than the website traffic and software issues already identified.
Emerging errors include duplicate enrollments, spouses reported as children, missing data fields and suspect eligibility determinations, say executives at more than a dozen health plans. Blue Cross & Blue Shield of Nebraska said it had to hire temporary workers to contact new customers directly to resolve inaccuracies in submissions. Medical Mutual of Ohio said one customer had successfully signed up for three of its plans.
HHS is saying that they're working on it, and they're also ordering insurers to shut their pie holes about how bad Obamaware is.
Health-department officials have pressured insurers to refrain from commenting publicly about the problems, according to executives at four health plans, who asked not to be named. The HHS declined to comment.
CBS News confirms the bad data flowing through Obamaware.
As Taranto notes, if insurers have to expend additional resources to correct Obamaware flaws, then they may run into an 80-20 problem, among other things.
The heart may not bleed for insurance executives burdened with administrative costs, but this is actually a serious threat to the ability of Americans to get insurance. Under a provision of ObamaCare known as the "Medical Loss Ratio," insurers in the individual marketplace are required to spend at least 80% of all premium dollars on medical care. If the exchanges are "fixed" so that many more faulty applications get through, the new administrative costs will have to come out of the insurance companies' bottom line, making it harder for them to stay in business.
The Journal article notes that the largely nonfunctional exchanges may also worsen the "adverse selection" problem that comes with redefining insurance as a redistributive scheme:
As consumers struggle to navigate healthcare.gov, some health-plan executives worry that only the sickest--those who most expect to need insurance--will persist in seeking coverage. If younger consumers who are on the fence about buying coverage find the process too onerous, insurers may end up with too few healthier members to offset the costs of less-healthy enrollees.
The folks at CMS whom Yuval Levin spoke to are in a state of "restrained panic". More below.
If the problems now plaguing the system are not resolved by mid-November and the flow of enrollments at that point looks like it does now, the prospects for the first year of the exchanges will be in very grave jeopardy. Some large advertising and outreach campaigns are also geared to that crucial six-week period around Thanksgiving and Christmas, so if the sites are not functional, all of that might not happen—or else might be wasted. If that’s what the late fall looks like, the administration might need to consider what one of the people I spoke with described as “unthinkable options” regarding the first year of the exchanges.
All of the CMS people I spoke with thought the state-run exchanges are in far better shape than the federal system under their purview. But the insurers do not seem that much happier with many of those state exchanges. Back-end data issues seem to be a problem everywhere, and some of the early enrollment figures being released by the states are not matching up with insurance company data about enrollments in those states, which suggests a breakdown in communication that is only beginning to be understood. The insurers believe that only Nevada, Colorado, Washington state, and Kentucky have what could reasonably be described as working systems at this point. Still, there is no question that on the whole the states with state-run exchanges are in better shape than those with federal ones.
The tone of the CMS officials who spoke with me was a kind of restrained panic. Among the insurance company officials (who, I should stress again, work in the Washington offices of some large insurers, and so are basically policy people and lobbyists), there was much less restraint. The insurers are very, very worried about the viability of the exchange system—especially but not exclusively at the federal level.
One key worry is based on the fact that what they’re facing is not a situation where it is impossible to buy coverage but one where it is possible but very difficult to buy coverage. That’s much worse from their point of view, because it means that only highly motivated consumers are getting coverage. People who are highly motivated to get coverage in a community-rated insurance system are very likely to be in bad health. The healthy young man who sees an ad for his state exchange during a baseball game and loads up the site to get coverage—the dream consumer so essential to the design of the exchange system—will not keep trying 25 times over a week if the site is not working. The person with high health costs and no insurance will. The exchange system is designed to enable that sick person to get coverage, of course, but it can only do that if the healthy person does too. The insurers don’t yet have a clear overall sense of the risk profile of the people who are signing up, but the circumstantial evidence they have is very distressing to them. The danger of a rapid adverse selection spiral is much more serious than they believed possible this summer. They would love it if the administration could shut down the exchange system, at least the federal one, until the interface problems can be addressed. But they know this is impossible.
And they believe, as the CMS officials I spoke with do, that all of these problems will not be addressed immediately. No one wants to say how long it might take, and no one would share with me what estimates they might be getting from their contractors (whom they no longer trust anyway), but there has so far been relatively little progress and it seems like everyone involved is preparing for a process that will take months, not weeks. An extension of the enrollment period for coverage, now set to end on March 31, seems to be almost taken for granted. A delay of the individual mandate penalty—which effectively begins in the middle of February—is not thought to be a crazy idea (though the people I spoke with said they have not seen internal preparations for such a move at this point).
The nightmare scenarios, the “unthinkable options,” involve larger moves than that—like putting enrollment on hold or re-starting the exchange system from scratch at some point. No one seems to know how this could work or what it would mean, but everyone involved is contending with a far worse set of circumstances than they were prepared for. This is a major disaster from their point of view, not a set of glitches, and they simply do not know how long it will take to fix. They dearly want to see progress day by day, but they are generally not seeing it.
The fate of these sites is the fate of Obamacare, for reasons that may not be immediately obvious. Health insurance is highly sensitive to the integrity and robustness of the market in which it is sold: though we don’t often think of it this way, health insurance is a financial service, a protection against risk, so the nature and structure of a given insurance plan is highly responsive to the scope and the character of the demand for it at any given time. It is in this sense rather different from most consumer products. This means it is not possible to think of the exchange websites as just sites where products are sold, and to believe that the product is fine but the site has some glitches. If the site doesn’t work, the product cannot work, and the insurance market created by the law cannot be sustained. So a great deal is at stake here, and it now seems a great deal is at risk.
So...how are things in South Dakota? They suck!
Right now the Obama administration appears to only be looking at this through a political lens: How do they minimize the political fallout?
There are two things wrong with that perspective.
First, the politics of this can't get any worse. This is now a political joke. Republicans can make lots of snarky comments about Obamacare and they won't be able to do more damage to Obamacare than the administration is doing to itself. Any Republican reaction to taking the system down won't last more than a couple of news cycles. More, the President would never lose politically by making a decision about every American already knows he has to make.
Second, the Obama administration, by keeping this computer system up and so far not being able to fix it, is not only wasting people's time they are on their way to destroying Obamacare.
As I have repeatedly said on this blog, the real longer-term threat Obamacare faces is that not nearly enough healthy people will sign-up for coverage in order for the program to be able to pay the medical costs for the sick people who enroll.
Left as is, I have to believe that the only people willing to put up with the repeated attempts and frustration with the Obamacare website and call centers are people so sick and in need of health insurance they have no alternative.
The greatest threat to Obamacare right now is a computer system the Obama administration continues to defend. And maybe their inability to understand how much damage they are themselves doing to the President's signature domestic accomplishment.
When these computer problems are finally fixed, then we can move onto the main event: Can Obamacare work?
This bears repeating. Obamaware is Obamacare. The main vehicle--actually, the only vehicle--for signing up seven million previously uninsured people is this crappy, piece-of-s**t, out-of-date, untested software. If the Obamaware fails, so does Obamacare.
Of course, these problems just apply to those folks who know enough about Obamaware to use. The other 71% of the uninsured are saying, "On-line exchanges? What's that?"
Sebelius found the time to appear on The Daily Show but just can't find the time to appear before Congress. Lower-level HHS officials are also not available. Oh, and Sebelius also has time in her buys schedule to attend glitzy galas in Boston.
The folks who continue to defend this debacle increasingly sound like Chip Diller.
At MSNBC, its producers would do better eating crayons than using chyrons.
Okay, enough with healthcare debacles. The other debacle in DC is the GOP. At FreeomWorks, Matt Kibbe is talking about splitting from the GOP. I know it's a big tent and all, but does the GOP really want a guy with that eyewear and facial hair?
Tea Partiers misunderstand that it wasn't compromise that failed the Bush 43 presidency, among so many other things they misunderstand. Come to think of it, Ted Cruz is a walking, talking, breathing misunderstanding. Sometimes even douchebags are right.