November is the New October

Many health care experts and journalists, including me, felt that the month of October would be the key barometer of the success of Healthcare.gov, the online health insurance marketplace that is a cornerstone of the Affordable Care Act.

But as days became weeks, and the problems plaguing the website stubbornly went unfixed, the question now is whether the administration can make the website work well by the end of this month and salvage the president’s signature achievement. If Healthcare.gov, which handles health insurance enrollment for 36 states, is working well at the end of this month, it will leave consumers just two weeks to choose plans if they want them to take effect on Jan. 1, 2014.

In other words, November is the new October.

The din of partisan accusations and counter-accusations is deafening and only getting louder. But in the interest of finding out what’s really happening on the ground, I consulted Kip Piper, who advises large health care organizations on Medicare, Medicaid, and health reform policy, finance and business strategy.

Piper has served as senior advisor to the administrator of the Centers for Medicare and Medicaid Services (CMS), Wisconsin state health administrator, director of the Wisconsin Medicaid program, a senior Medicare budget officer at the White House Office of Management and Budget, among other roles. He is articulate and clear-headed.

Q. So Kip, here we are a month into the rollout of the insurance marketplaces. Is it as bad as we’ve been reading?

A. Actually, it’s far worse.  The system was not ready for October 1, nor was it likely ever going to be ready by then given the cascade effect of earlier decisions, such as the delay in issuing rules during the election, the decision to manage the project in-house without a systems integrator, the delay in hiring contractors, the lack of genuine testing, the decision to not allow window shopping, and the sheer mind-numbing complexity of a law that’s a veritable minefield of controversies and tricky problems requiring solutions.

The big factors would have doomed an October 1 launch regardless how well the project was planned or staffed.  Indeed, for all we know, the work of CMS and the contractors may have been fine after considering the disastrous constraints they had to live with.

Launching – if that’s the right word, since it wasn’t working – on October 1 can only be understood as a political decision.  Externally, delay would have been ridiculed by the GOP and stress-inducing for the Democratic base and insurers.  Internally, no one was in a position to prevail upon the White House to delay the launch.  It now appears they needed a least a two-month delay.

We should also remember that several key policies and functionalities required by the Affordable Care Act are still not implemented, some not even designed yet.  They made decisions to delay parts that could not be done by October 1.  So, on the bright side, it could have been even worse.  It appears, once they decided on July 3 to delay the employer mandate [requiring companies with more than 50 full-time workers to purchase insurance or pay a penalty] until 2015 and weathered that storm, they were bound and determined to move ahead as if they were Admiral Farragut entering Mobile Bay.

Q. What are you hearing from your clients?

A. A mixture of amazement and frustration peppered with anxious laughter and wrapped within hopeful but cautious questions.  Their questions for me focus on what happened, what will likely happen next, whether CMS will get it fixed by December 1, whether the individual mandate will get delayed or open enrollment extended, when they’ll get correct data in mass, and how this affect marketing and enrollment projections.

The health plans are in a holding pattern.  Most know that the original strategic reasons for entering the exchange market still apply – assuming CMS can get it working this month.  If they are in Medicaid, they are also anxious to see how Medicaid enrollment goes and when data issues will be resolved.  The overall situation does complicate strategy, business planning, and forecasts.  It’s tough because they know they may need to adjust expectations and plans somewhat but are operating with little information from the federal government.  It’s made worse by the larger unknowns like how consumers will react to the new plan, choices, and prices.

Health systems are worried but are happy to see the early Medicaid enrollment figures.  They know they may need to rejigger their 2014 budgets to assume more Medicaid and fewer with commercial or exchange coverage than originally expected.  This also varies by state, of course.  Providers in states seeking waivers are generally anxious to see those get approved and implemented.

Q. Is the month of November more important than the month of October in terms of the law’s success?

A. Ultimately, each month is more important than the last, especially for enrollment during the open season [which ends March 31].  The Affordable Care Act is a giant social experiment with few precedents.  It’s impossible to predict with any precision what will happen next or how consumers and employers will act in the post-Obamacare world.  Predicting behavior of and the impact on health insurers and providers is easier but still complex.  Americans and the media have a short attention span.  Plus the law is so complex that few have the patience to understand even parts of it.

So we come back to optics and the power of large numbers and simple stories.  Since CMS and the contractors will spend most of November getting the system fixed, the first big influx of exchange enrollment will likely come in in early December, as earlier enrollment applications are fixed and consumers sign up to meet the December 15 deadline for coverage starting January 1.  The first two weeks of December and those enrollment figures will be critically important to assessing how well the federal exchange is working – and how the public is responding to the repaired healthcare.gov.

From past expansions of government benefits, we know that most people signup in the second half of an initial open enrollment period.  Many outreach and marketing campaigns are in stasis pending repairs to the federal exchange.  Presumably those will ramp up in early 2014.  So signups in January through March will be important to watch.

Enrollment numbers are not enough.  We also need to know what plans people are choosing and what types of people are signing up.  Volume by itself is not enough information.  To assess the law’s success we will need to know, for example, impact on uninsured rate, the age and health risk characteristics, the benefit design choices, the amount of crowd out, the Medicaid woodwork effect, and so forth.

Q. It seems the administration is well on its way to fixing the front-end problems that have prevented people from applying for coverage and enrolling on Healthcare.gov. But what about the back-end systems, the ones that transmit the data to insurance companies. Is that getting better?

A. Unfortunately, no.  The data transfers from the federal marketplace to health plans for new exchange enrollees and to states for new Medicaid applicants are not reliable yet.  Small data transfers to insurers were happening in a trickle but the data transfer process – critical to actually enrolling consumers – remains riddled with problems.  Medicaid data transfers to states were in worse shape and therefore suspended completely.  Tests are underway to get that working.

All this is why healthcare.gov is not merely a website.  Considered as a whole, none of the key functions work properly as intended or needed.  Some functions work alone but not with other dependent functions.  Other aspects, like the data transfers, really didn’t work at all yet.  It’s all fixable, however.

Q. What are the signals and signs you’re looking for to gauge improvement?

A. There are several things we should be looking for:

  • CMS regularly releasing detailed, comprehensive statistics on applications and enrollment, with specific breakdowns and released at least weekly.  This must be devoid of spin, duplicitous omissions, or other gaming for the benefit of the optics.  Clear, complete, timely, consistent, and credible numbers are essential – and will go a long way to establishing credibility of the federal marketplace.
  • There should be a substantial increase in enrollment in the last three months of open enrollment – January through March.  If that does not materialize, if the pace remains flat, alarm bells will go off.
  • The quality, completeness, and timeliness of the data transferred to the health plans and the state Medicaid agencies are a critical indicator.  In the end, healthcare.gov is about people applying for taxpayer subsidies and buying coverage, whether newly insured or moving from other insurance.  The data transfers must work seamlessly for that to happen.  At this point, we will have to rely on what the states and insurers say about the data transfers.
  • Another key indicator is the performance of the website all the way from simple window shopping through account creation, identify verification, subsidy eligibility, Medicare screening, plan and product selection, and enrollment – with no error messages or time outs and with a smooth, fast response.
  • The presence of a fully functioning window shopping feature – where consumers can anonymously receive subsidy estimates and view health plan products – will also be a good sign.

Next, we’ll discuss Medicaid, transparency and the contractors behind Healthcare.gov.

Charles Ornstein is a senior reporter at ProPublica and past president of AHCJ. An earlier version of this post originally appeared on his tumblr, Healthy buzz.

7 replies »

  1. The new enrollments in Medicaid are a good thing, not a bad thing. It means low income people who were suffering now have insurance. I don’t expect a lot of “young invincibles” to enroll until the second year and that’s not a problem. The insurers will have an incentive to keep rates low because most of the sick population will have signed up in the first year, and the insurers will will want to capture the young, healthy crowd as long term customers in the second year. We should expect to see a lot of insurers advertising heavily to capture that market in year two. There are reinsurance features in the ACA to protect insurers from an initial flood of sick patients and should rates be raised the subsidies are indexed so that the low price to the consumers is maintained. In addition, mandate penalties increase in year two which will further encourage young people to sign up. While the ACA is not perfect, it is not a haphazard piece of legislation. A great deal of thought and planning by healthcare experts went into its design, despite the partisan rhetoric to the contrary.

  2. A good interview with many well stated ideas. The complexity, roll out problems and far reaching consequences are massive. It is an ambitious undertaking but there are many challenges some of which could make the site issues look small.

  3. I think there are going to be far-reaching consequences (despite fixing the website) as this continues to rollout.

  4. Little discussion and resolution to the problems of health insurers cancelling policies and plans and cutting physicians from their networks portends even greater problems. And no one has see the fee schedule reimbursement rates to physicians, especially those expected to do the bulk of the work in primary care.

  5. The website issues, while telling of the incompetence of those running this program, are not the real issue. The real problems will start once the enrollment numbers and which programs they enter into are revealed. It is already becoming apparent that most of the new enrollments are to Medicaid. Of those who hit a private plan, I predict we will see that most of them will have projected costs that greatly exceed their premiums. The young invincible crowd will be nowhere to be found. This thing was fatally flawed from the start, and don’t even get me started on the perverse incentives involved in the subsidies and for business coverage.

  6. If Healthcare.gov, which handles health insurance enrollment for 36 states, is working well at the end of this month, it will leave consumers just two weeks to choose plans if they want them to take effect on Jan. 1, 2014.

    Has anybody heard the official response to why this date cannot be moved back?