Obamacare’s Federal Exchanges are Failing at Every Level

Healthcare.govHealthcare.govThe technical troubles with Obamacare’s exchanges
are bad enough that even supporters are turning
critical. The Washington Post’s Ezra Klein, a
longtime champion of the health law, has
declared
the launch so far a “failure” and a “disaster.” Former
White House press secretary Robert Gibbs is
asking
whether anyone will be fired over the botched
rollout. 

But here’s the thing: The serious problems that have gotten the
most attention so far may only be the beginning of the headaches
for the exchanges.

Right now, the most visible problems are concentrated on the
user end, in the registration and enrollment process. Lots of
people still can’t create accounts in the federal exchange system
at all. Others get error messages or hang-ups within the
application process. It seems pretty clear that, roughly two weeks
after launch, most potential users are effectively locked out of
the federal exchange system—and most of those who aren’t actually
locked out aren’t able to complete the transaction process.

But as I
wrote
last week, there also appear to be serious back end
problems as well. On Friday, insurance consultant Robert Laszewski

noted
that the enrollment system is sending lots of junk
information through to insurers.

Here is one example from a carrier–and I have received numerous
reports from many other carriers with exactly the same problem. One
carrier exec told me that yesterday they got 7 transactions for 1
person – 4 enrollments and 3 cancelations. 

For some reason the system is enrolling, unenrolling, enrolling
again, and so forth the same person. This has been going on for a
few days for many of the enrollments being sent to the health
plans. It has got on to the point that the health plans worry some
of these very few enrollments really don’t exist. 

The reconciliation system, that reconciles enrollment between
the feds and the health plans, is not working and hasn’t even been
tested yet.

A
separate Washington Post article
seems to confirm
Laszewski’s diagnosis. The Post says that Cigna, which is
selling health insurance through the federal exchange system in
four states, has “seen ‘multiple enrollments’ from the same
customer on the same day.” Another Blue Cross Blue Shield plan told
the Post it had also seen the error. The enrollment data
error is further complicated by the fact that the applications lack
a crucial detail: a time stamp. 

And then there’s the subsidy calculator that is at the core of
the exchange system. The exchanges are not only supposed to allow
individuals to compare the sticker prices for insurance available
in their area, they are also supposed to allow people to see, in
real time, if they qualify for a subsidy—and how much that subsidy
is worth.

But even before the exchanges opened for enrollment there were
reports that the subsidy calculator was not working correctly. That
still seems to be the case. Cigna is so uncertain about the subsidy
calculator in the federal exchange that it has issued an official
warning to brokers not to attempt to enroll anyone who might
qualify for subsidies until November, according to the
Post. Cigna isn’t alone in its worries either. Jonathan
Gruber, an influential Massachusetts Institute of Technology health
policy wonk who helped design Romneycare and consulted on the
federal health care overhaul,
tells Politico
that he expects that problems with the
subsidy calculator could well last into next year. That’s a long
time for key functionality to remain broken. 

So two weeks in, here’s where we’re at: Many and perhaps most
users can’t even get into the federal exchange system. Those who
can are often stymied by errors, and can’t trust that any
subsidized insurance prices they see will be accurate. And then,
even if they do manage to get all the way through the system, their
applications may not transmit properly to the insurers from whom
they are trying to purchase insurance. In short, nothing works.
It’s a failure at every level.

The administration says it’s working on fixes. But the clock is
ticking.

Whitehouse.govWhitehouse.govObama administration officials
are downplaying problems, and framing current troubles as a rocky
start that won’t necessarily doom a six-month enrollment project.
Open enrollment, they note, doesn’t actually end until March 31 of
2014.

But in order for Obamacare to have any chance of success, the
exchanges will need to be functional long before then. In order for
coverage to start on January 1, individuals will have to complete
applications by December 15. And in order to avoid the law’s
penalty for remaining uninsured, they’ll have to be
enrolled by February 15 of next year
—not the end of March.

In other words, the administration doesn’t really have six
months to fix problems with the exchanges. Political pressure will
build well before the end of March. If there isn’t significant
progress in a fairly short period of time, I suspect we’ll start to
see a lot more supporters begin to question the law, or at least
start to wonder aloud about what to do with a health care overhaul
that simply doesn’t work.Â