Meanwhile, Back In The Real World

This week Aetna announced that it would be withdrawing from many of the states in which it offers health care plans on the Affordable Care Act exchanges.  Aetna participated in exchanges in 15 states, and it will be withdrawing from 11 of those 15.

mw-de672_aet_20_20150202162433_zhIt’s more bad news for “Obamacare,” which has seen other major insurers back away from offering plans, too.  Aetna says its decision is prompted by substantial losses it is experiencing on the exchanges, all of which arises from the fact that the pools of covered individuals has turned out to be sicker than was originally forecast — and therefore more likely to need expensive care.  If fewer insurers offer plans on the exchanges, there obviously will be less competition, and less choice.  As Aetna’s decision reflects, however, the effect will vary on a state by state basis.

In the meantime, premiums on the exchange plans are going up — and the “individual mandate” penalty for not having health insurance is ratcheting up, too.  In 2017, the average penalty will be $979 per household.  The question is whether the threat of having to pay a $1000 penalty will drive more people to enroll, and whether those currently uninsured people who do enroll will be healthier and therefore help to hold down the costs of the plans for the insurers who offer them, so more even insurers don’t exit the plans.  Ever since the Affordable Care Act was passed, the question has been whether the exchanges can avoid the “death spiral” in which enrollment shrinks, leaving only sick people in the plans, causing ever-greater losses and ever-increasing premiums that simply can’t be sustained.

The Affordable Care Act is unquestionably the signature domestic policy achievement of the Obama Administration.  It’s also another huge government program seeking to force behavioral changes that is anathema to both fiscal conservatives and social libertarians.  In any rational world, a presidential election would be a forum for discussing whether, and if so how well, “Obamacare” has worked — and what alternatives would be.

Of course, we don’t have such discussions about actual policy issues or the real-world performance of important initiatives like the Affordable Care Act in this election.  No, we’re too busy talking about Donald Trump’s latest idiotic foot-in-mouth-episode, or Hillary Clinton’s health issues, or other extraneous topics.  This is the most content-free presidential election in my memory.

We need to remember that the real world is still out there.

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Adding Up The Obamacare Tab

When the Affordable Care Act was passed, its drafters contemplated that states would design their own health care exchanges, with the federal healthcare.gov website serving as a kind of backstop.  That turned out to be a miscalculation.  More than 60 percent of the states — 36 out of 50 — elected not to create their own health care exchanges.

At the time, some critics argued that the decisions of states with Republican governors to refrain from building their own websites was politically motivated.  In retrospect, however, the decisions to eschew developing state-specific health care exchanges seem more like a wise recognition of the limitations of state capabilities, because the experiences of states that did attempt their own websites have been decidedly mixed.

Six of the 14 states that chose to create their own exchanges — Masschusetts, Oregon, Nevada, Maryland, Minnesota, and Hawaii — have had severe functionality problems and have become tremendous cash drains and political albatrosses.  In Massachusetts, Oregon, Nevada, and Maryland alone, the federal government has paid at least $474 million to support the establishment of non-functional exchanges, and that cost total seems certain to increase significantly.  In those states, Democratic politicians are blaming the website contractors and threatening litigation, and Republicans are saying that the states never should have attempted to build the exchanges in the first place.

Obamacare has become such a political football that every fact and development gets spun to death — but if we can’t learn from the current reality, and recognize that mistakes were made in the legislation and its conception, then we are just compounding our problems.  In all, the Kaiser Family Foundation estimates that about $5 billion in federal funds that have been shelled out to states to allow them to assess whether to create state-specific exchanges and then, in some cases, to support their creation.  That’s an enormous sum of money, and it is becoming clear that a significant part of it has been wasted.  Whatever happens with Obamacare, let’s at least hope that in the future we refrain from enacting statutes that require states to develop large-scale, complicated technological systems, on their own, with the federal government picking up the tab.  As the mounting Obamacare costs demonstrate, that approach is fraught with peril.

Consumer Reports Meets Healthcare.gov

When Kish and I need to buy a car, a major appliance, or some other significant product, we typically consult Consumer Reports.  There we find objective evaluations of our potential purchases by knowledgeable analysts, written in plain English accessible to the non-gearheads and non-techies among us.

So, I was interested when Consumer Reports tackled the process of trying to use Healthcare.gov, the federal government’s health exchange website.  It makes sense when you think about it.  One of the primary goals of the Affordable Care Act is to get uninsured consumers to buy insurance, so why not have one of the country’s preeminent consumer publications take a look at the process from the consumer’s standpoint?

Unfortunately, the Consumer Reports review of the Healthcare.gov process isn’t very encouraging.  It notes that of the nearly 9.5 million people who apparently tried to register on Healthcare.gov in the first week of its operation, only 271,000 — about 1 in 35 — were successful.  The article then provides tips about how to increase your chances of successfully navigating the website, offered by a software pro who has taken a careful look.  (You can find the software pro’s blog, which addresses some of the problems he has found with the website, here.)  Among other issues, he finds the instructions “garbled” and “needlessly complicated,” advises that you should simply ignore error messages that do not match reality, recommends that you immediately try a new user name, password, and security questions if “anything at all doesn’t go right,” and suggests that you check your e-mailbox frequently for a confirmatory e-mail, because Healthcare.gov will time you out if you don’t respond promptly.  The software guy also notes that many people are experiencing problems because of a crucial design error on the website:  it loads “cookies” and other code onto user computers during the registration process that prove to be too large for Healthcare.gov to accept back.

Consumer Reports also recommends that potential users “[s]tay away from Healthcare.gov for at least another month if you can,” because “[h]opefully that will be long enough for its software vendors to clean up the mess they’ve made.”  This advice is particularly interesting, because Consumer Reports also believes that the best source of information about healthcare options for consumers who are looking to buy health insurance themselves is through the health insurance marketplace in their state and Healthcare.gov — if it could only be made to work.

 

The “Glitches” Continue And The Concerns Grow

The continuing saga of the federal government’s Affordable Care Act website is worth following, because it is telling us a lot about how modern government works, and doesn’t work, and what we should believe.

Most people, including me, have focused on the access issues with the Healthcare.gov website — that is, the fact that there are ongoing reports that people simply cannot get on the website and use it as intended, and whether the design of the system in fact works against that.  But there are other issues, too.

For example, how complete and accurate is the information the website is collecting?  Anyone who has filled out a health-care application knows that a mass of information must be provided.  A recent article quoted industry sources who estimated that only one in 100 applications completed on the website contain enough information to actually enroll someone in a plan — which of course is the entire point.  As the article notes, much more serious problems could be coming if people believe they have successfully enrolled, only to be told later that the information they provided was insufficient or lost.

And speaking of information — how secure is the data those lucky people who have been able to use the website have provided?  Health care information and financial information is extraordinarily confidential.  Given the apparent design flaws with the website, why should anyone have great confidence that the designers at least got system security right?  Given the coverage of the problems with the website, are legions of hackers around the world targeting it as an easy potential source for personal information, like Social Security numbers and credit card data?

And finally, there is cost.  Some sources have tried to piece together government contracting data to determine how much the Affordable Care Act websites have cost the taxpayer.  The Washington Post says about $400 million has been committed to the health care exchanges.  The Digital Trends website estimates the cost so far is more than $500 million, with a total cost of more than $2 billion expected.

With costs like this, it’s fair to ask whether we are really getting our money’s worth.  On Thursday, Secretary of Health and Human Services Kathleen Sebelius visited Pittsburgh as part of a nationwide campaign to tout the exchanges.  She assured the audience that the “glitches” were being addressed and the system is getting better every day.  Event planners had brought more than 20 certified health care application counselors to meet with uninsured people, but even the certified counselors couldn’t access the Healthcare.gov website.  So, who do you believe — the bureaucrat who says the system is improving, or the fact that even computer geeks can’t get it to work?

Questioning The Architecture Of The “Obamacare” Websites

The Affordable Care Act health care exchange websites continue to be plagued with problems, beyond the first-day “glitches.”  The Obama Administration says it’s due to heavy traffic.  Now Reuters has published an interesting article suggesting an alternative explanation.

Reuters interviewed IT experts who question the very architecture of the federal health care exchange website.  They believe that the website simply requires computers to load too much software and information, overwhelming the system.  One expert found that clicking “‘apply’ on HealthCare.gov causes 92 separate files, plug-ins and other mammoth swarms of data to stream between the user’s computer and the servers powering the government website,” including 56 JavaScript files and plug-ins that allow data to be uploaded.

As one expert explained it, the massive volume of data moving between computers and servers resembles a computer hacker attack on a website — except this attack is self-inflicted, as part of the website’s basic design.  If the experts are right, the website designers made a very fundamental, almost amateurish blunder.

The bottom line from these experts is that the solution is not simply adding more servers, but reconfiguring the system.  That possibility would involve more expense, and delay, and frustrations for people who are just trying to comply with their legal obligation to obtain insurance.

First-Day “Glitches”

Today was the first day Americans could try to access health care exchanges under the Affordable Care Act — known to some as “Obamacare.”

It’s fair to say that the process didn’t go smoothly.  The Chicago Tribune reported, for example, that consumers seeking information encountered “long delays, error messages and a largely non-working federal insurance exchange and call center Tuesday morning.”  It’s not entirely clear how widespread the problems were, and are, but the prevailing theme of the news stories was about difficulties, failures, and frustrations.  As the video above shows, one MSNBC anchor tried to obtain information about options on-line, to try to help viewers understand how the process worked, and was hit with error messages, inability to resolve the issues through an on-line chat session, and finally being put on hold for more than 30 minutes before hanging up because her patience was exhausted.  

The President says there will be problems and “glitches” because we are trying to do something that hasn’t been done before.  I’m not sure that is quite right — there are commercial websites that handle significant volumes of traffic without problems — but his reaction, I think, misses a fundamental point that would not be lost on a businessman.  One of the selling points for the Affordable Care Act was that people could quickly and easily get information about competing health insurance options with a few clicks of a mouse.  Given that pitch, a business would never roll out a website without being absolutely certain that it worked well, because businesses know that consumers can quickly become frustrated — and a frustrated consumer is one that is not likely to come back.  It says something about the government mindset that they would go live with websites that clearly aren’t ready.

The people implementing the Affordable Care Act missed a real opportunity today.  The negative publicity about the websites and their problems are the kind of thing that could become fixed in the minds of the American public, with people coming to accept as conventional wisdom the notion that the websites, and exchanges, are an enormous hassle fraught with delay and failure.  When you’re trying to convince people who aren’t insured to become insured, and you’re trying to overcome the drumbeat of Republican criticism of “Obamacare,” a disastrous first-day roll-out just makes your job immeasurably harder.