The Perils Of Overpromising

In a memorable episode of the classic TV sitcom 3rd Rock from the Sun, Sally the alien and Officer Don are discussing becoming intimate for the first time.  The straightforward Sally asks:  “Well, Don, are you ready to rock my world?’  And the nervous Officer Don gulps and responds:  “Well, perhaps jostle it a little bit.”

Officer Don clearly understood the perils of overpromising.  It’s a lesson that President Obama and his administration are learning the hard way these days.

Hundreds of thousands of Americans have been receiving cancellation notices from health insurers that are discontinuing existing coverage because it doesn’t satisfy all of the requirements of the Affordable Care Act, or “Obamacare.”   It’s not clear how many people ultimately will receive cancellation notices, but experts predict that a significant percentage of those who currently buy individual coverage — between 7 and 12 million people — will be affected.  Under the Act’s “individual mandate,” all of those people will need to find new insurance that complies with the requirements of the Act, either through the dysfunctional Healthcare.gov website or some other process.  News sites are filled with stories about people who have found that they will need to pay much more each month for coverage, often with higher deductibles.

These people are upset because they remember President Obama’s repeated promise that, under the Affordable Care Act, if you like your insurance, you can keep it.  But the statute and its regulations were written to prevent that pledge from being honored, by requiring that all insurance plans include certain forms of coverage, such as maternity care, mental health benefits, and prescription drug benefits, that were not offered by many stripped down, inexpensive plans.  The inevitable result was that those plans would end and the new options, all of which include the mandatory coverage, would be more expensive for many people.  Of course, when you hit people who are trying to live within their means with monthly insurance costs that are significantly higher than what they had budgeted, you’re bound to make those people angry and bitter.

It’s a predicament that the humble Officer Don would have avoided.  Of course, few politicians seem to truly appreciate the perils of overpromising.

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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?

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.

Taking The “Affordable” Out Of The Affordable Care Act

This week, enterprising journalists discovered that the Obama Administration has delayed another key provision of the Affordable Care Act.

In this instance, the delay affects one of the core selling points of the Act — the provision that capped the total amount of out-of-pocket expenses, in the form of deductibles and co-payments and other contributions by the insured toward health care.  It was supposed to take effect in 2014, but the newly discovered ruling gives insurers a one-year extension.

The delay wasn’t exactly announced in a way that befits an Administration that President Obama recently described as “the most transparent Administration in history.”   The New York Times article linked above describes the relevant ruling as follows:  “The grace period has been outlined on the Labor Department’s Web site since February, but was obscured in a maze of legal and bureaucratic language that went largely unnoticed. When asked in recent days about the language — which appeared as an answer to one of 137 “frequently asked questions about Affordable Care Act implementation” — department officials confirmed the policy.”  I guess “transparency” means burying the bad news in an avalanche of regulatory drivel and minutiae, rather than being honest about the many delays and snags that have affected legislation that was passed three years ago amidst confident predictions about its implementation, enforceability, and impact.

And speaking of impact, Forbes has a very interesting article about the impact of the Affordable Care Act on, well, getting affordable care.  It discusses the inevitable effect of caps on out-of-pocket expenses like co-payments and deductibles.  Because they don’t have anything to do with the cost of health care, that just means more of the cost will be paid through premiums imposed on everyone, rather than through contributions by the users (and, often, overusers) of health care.  The article notes that some colleges that used to offer cheap plans to their healthy students have had to drastically increase the premiums and other schools have stopped offering health care plans altogether.

Of course, the whole notion of burden-sharing underlying the Act means that some people will pay more — the question is, how many people, and how much more?  What we’ve seen of the Affordable Care Act so far doesn’t instill great confidence that we know the answers to those two important questions.

Congress Gets Special Treatment, Again

For years, Congress enacted laws that did not apply to Congress.  The Affordable Care Act was supposed to be different, however.  It provided that members of Congress and their staffs would not receive gold-plated coverage through the Federal Employees Health Benefits Program and instead must purchase insurance through the on-line exchanges.  Notably, the law made no provision for taxpayer subsidies of the cost of such insurance.  In short, Congress and its staffers would have to pony up for insurance just like the rest of us schmoes.

DSC04196Then Congress had second thoughts.  Without subsidies, Representatives, Senators, and staffers would face “sharply increased costs.”  That, in turn, might cause a “brain drain,” as dedicated public servants left for more lucrative private employment.  Those considerations, at least, were offered as justification for a new proposed rule promulgated by the Office of Personnel Management after intervention by Congress and President Obama.  Under the proposed rule, taxpayer contributions will be allowed to continue for exchange-purchased plans for lawmakers and their staffs.  The taxpayer contributions will cover about 75 percent — 75 percent! — of their health care costs.

It’s a mystery how the OPM can conclude that taxpayers must pay for a subsidy when the Affordable Care Act says nothing about it.  More basically, though, the justification for the subsidy is laughable.  What is the evidence that there are any brains, among members of Congress or their staffs, that we should worry about being “drained”?  How much thoughtfully crafted legislation has come out of Congress lately?  The last I checked, members weren’t even bothering to read the voluminous bills that get written and voted on at the eleventh hour.  And there is no sign of brilliance in the legislative maneuvering, on both sides of the aisle, that has produced nothing but pointless bickering and idiotic solutions like “supercommittees” and “sequestration.”

In reality, members of Congress aren’t worried about brains — they are worried about protecting their own little fiefdoms, where they are treated like royalty by staffers who are prized not for intellect, but for loyalty and a laser-like focus on the crucial, ultimate goal of getting their member reelected at all costs.  If the loss of a 75 percent subsidy that most private employees could only dream of will cause those staffers to look elsewhere for employment, Congress has only itself to blame.  The alternative jobs undoubtedly will be lobbying and consulting and NGO jobs, where the former staffers will trade on their government experience and ability to obtain “access” to their former bosses and others on Capitol Hill.  If Washington, D.C. were not an insiders’ heaven, lucrative outside employment opportunities for the staffers who are pure political hacks would be non-existent.

Members of Congress are elected to represent us; they don’t thereby become an elite class.  They shouldn’t be treated any differently than the rest of the country, and neither should their staff members.  Shame on us if we let this latest outrage pass without recognizing, and acting on, the fact that Congress has once again immunized itself from the pain and aggravation that we will experience as a result of laws that Congress and the President have enacted.

Do The Affordable Care Act Delays Mean Anything?

In recent months the Obama Administration has announced the postponement of a number of provisions of the Affordable Care Act.

In April, full implementation of the Small Business Health Option Program was delayed.  On July 2, the Administration stated that the employer penalty provisions of the Act would not be applied until 2015.  And, only a few days ago, the Department of Health and Human Services gave notice that still other provisions — in this case, dealing with health insurance verification and income reporting requirements for state health insurance exchanges — will be delayed.  The latter delay means that, in 2014, state exchanges will be allowed to accept an “attestation” of projected household income to determine whether the individual seeking insurance is eligible for certain tax credits and cost sharing reductions.

Do these delays mean anything?  Are they simply what we should expect when any brand-new federal program takes effect?  Or, do they signify something deeper and more significant?

In announcing these postponements, the Administration cited considerations like “complexities” and “operational barriers.”  That may simply be CYA bureaucratic jargon devised by a regulator who dropped the ball.  Or, it may mean that the health care and health insurance markets in our country are a lot more complicated than proponents of the Affordable Care Act thought.

I’ve always been skeptical of the bold promises made by the President and congressional advocates of the Affordable Care Act, so take this with a grain of salt — but it seems to me if straightforward things like income verification and employer insurance verification haven’t been resolved in the years since the statute was enacted, much more complicated provisions of the Act might be in even greater jeopardy.  I know that the Administration and regulators are confidently telling us that the system will work fine once it takes effect . . . but then these same people assured us that the provisions that have now been delayed would be readily achievable.  Why do we think the “complexities” and “operational barriers” that are supposedly preventing some requirements from taking effect will be resolved in a year’s time?

As I mentioned, I was not an advocate of the Affordable Care Act, but it is the law of the land and therefore I hope it works.  With health care and health insurance being such huge elements of our economy, heaven help us if it doesn’t.