Last week the Administration issued a dubious Obamacare progress report claiming HealthCare.gov now “runs smoothly for the vast majority of consumers.” Just 10 weeks after the website’s disastrous rollout, President Obama declared victory – suggesting that the worst of HealthCare.gov’s problems are fixed. In fact, the Obama Administration’s eight-page progress report, comprised mostly of charts, makes unsubstantiated and often vague claims, while leaving key questions unanswered.
Obamacare Website Still Falls Short
For 10 weeks the Administration prioritized people’s “front end” experience, such as navigating the website and filling out an application. The Administration did not prioritize the site’s “back end” systems, which provide specific enrollment data and premium payments to the insurance companies. Even if the Administration gets the front end of HealthCare.gov working, much more serious problems are lurking beneath the surface. This is just the tip of the iceberg.
HealthCare.gov User Capacity Still Underperforming
According to the White House health care fixer, Jeffrey Zeints, HealthCare.gov is “a much more stable system that’s reliably open for business.” But White House officials privately begged liberal allies not to launch public enrollment campaigns. Clearly the Administration wants to avoid a full court press because it must keep the website’s user traffic manageable.
Scared that the retooled website is too fragile, the Obama Administration implemented a virtual waiting line. The website now asks people who are locked out of the system to provide an email address so HealthCare.gov can notify them once the website is available. This is not a feature any private sector online retailer would consider creating today – effectively asking shoppers to return when it’s free to serve them. The Administration claimed the website could handle an estimated 50,000 users at one time, but reports indicate HealthCare.gov’s queuing feature engaged at only 35,000 users, as the website’s carrying capacity maxed out.
The Administration claims to have processed 18,000 insurance enrollments on December 2 – Cyber Monday. This may or may not be accurate, but compare that figure to Amazon’s Cyber Monday activity in 2012, when the site filled 26.5 million orders. It is way too early for President Obama to take a victory lap.
834 Transmission Form Errors
For decades, insurers have used what’s called an “834” electronic form that tells the company’s computer system who a person is and what product they purchased. In October, reports surfaced that the Obama Administration is sending health insurance companies both faulty and incomplete 834 enrollment application data.
Nightmare 834 Scenarios
The President says HealthCare.gov is more stable and user-friendly, but he isn’t telling people that signing up for health insurance on the website doesn’t guarantee they are actually enrolled in a plan. According to one report, 834 errors currently impact one-third of all people who signed up on HealthCare.gov since October 1. Facing tough questions about the website’s back-end system readiness, Administration officials disputed the figure, but spent days refusing to provide specific data contradicting the report. Eventually CMS issued a statement claiming the 834 error rate reached a high of 1 in 4 enrollments in October, but has since fallen to 1 in 10.
Last month, Jeffrey Zients identified 834 transmission rates as a key measure of the health care law’s success. The Obama Administration says it implemented an 834 system fix clearing 80 percent of the file transmission errors. But as one cyber-security firm CEO explained: “Eighty percent success rate is a really bad number … It’s as if you go on Amazon and you buy a product and you only receive it 80 percent of the time.” Apparently the insurance industry didn’t believe the news either. An industry spokesman countered that “health plans continue to experience significant problems with the 834 enrollment files.”
The Administration isn’t telling people the magnitude of the 834 transmission problem. Until people pay their first month’s insurance premium, they do not have coverage. The White House refuses to quantify exactly how many people successfully completed the HealthCare.gov application process but failed to pay the first month’s premium. This is an important metric. People who do not pay may show up at their doctor’s office in January and discover not only that their coverage isn’t valid but also that it is void. That person then must re-enroll on HealthCare.gov. How will the website user experience be for thousands of people who revisit the site again in January because of transmission or premium problems?
Administration Bombshell: Key “Back End” Systems Not Built Yet
Testifying before the House Energy and Commerce Committee in November, CMS Deputy Chief Information Officer Henry Chao acknowledged that 30 to 40 percent of the IT systems needed to make HealthCare.gov work haven’t even been built yet. This includes financial management tools like accounting and insurance company payment systems. In order for insurers to enroll people in the correct plans, a process known as reconciliation, CMS must have the insurer payment system in place. HealthCare.gov was supposed to calculate premium subsidy and cost-sharing allotments in real time as people signed up for an insurance plan. The government subsidy would then be electronically sent directly to the insurer, not the patient, to help pay for the coverage.
Because HHS has yet to build the insurer automated payment system, recent reports suggest HHS may temporarily shelve the program – requiring that the companies manually submit payment requests starting next month. Subsequently, HHS plans to verify subsidy amounts and pay the insurance companies electronically using Medicare’s automated payment system. How effective is this work around going to be? What if a private insurer does not offer Medicare Advantage plans or retain a Medicare contractor? Will HHS be able to incorporate these companies into the Medicare automated payment system? Can the American people trust that the Obama Administration will make their subsidy payments on time, and without any complications, ensuring coverage will start January 1? When does the Administration plan to complete the original automated insurer payment system?
HealthCare.gov “Fixes” May Cause More Harm
Credit agency Moody’s now warns that the Obama Administration’s relentless rule changes and eleventh-hour delays could “negatively impact business for health insurance companies.” In just the past few weeks, the Administration:
- Announced the Department of Health and Human Services will use its dubious administrative “enforcement discretion” to allow some people buying health insurance in the individual market to keep their current plans.
- Delayed the 2015 open enrollment period for one month, until November 15, 2014 – after the midterm elections.
- Extended the 2013 enrollment deadline one week to December 23.
Moody’s, in its bi-weekly credit outlook, asserts that these unilateral, last minute Administration actions are “credit negative” for health insurance companies and may “expose the sector to additional financial and operational risks.” The company also cautions that the Administration’s claims about the HealthCare.gov user capacity remain “untested.”
More Speeches Won’t Fix Obamacare
The Democrats’ health care law is on extremely shaky ground. Four years after the President sold Obamacare by making one promise after another; the percentage of Americans who want the law repealed continues to rise. Washington Democrats are running out of time to convince the American people that this law isn’t a lemon, so the President and his team are going back to what they do best – campaigning. Rather than admit his law costs too much and fails to work the way he promised, the President just keeps trying to sell it.
Regardless if or when HealthCare.gov becomes fully operational, the bad news for the American people will keep coming. Obamacare is too big and complex. No small fix changes the fact that Americans are losing the plans they had and liked, they are losing their doctors, many are paying more for their coverage, and some are being forced to buy policies that they simply don’t want or need. Starting over is the only answer.