Better But Nowhere Near Good Enough

I can provide you with an Obamacare federal exchange rollout update from two decidedly different perspectives:

  1. The website is working much better with enrollment increasing at least three-fold over just a few weeks ago with backroom error rates considerably improved; or
  2. The enrollment, to give you a general sense of what’s happening, for a health plan that might have to sign-up 100,000 people in order to get their share of the 7 million Obama administration’s national enrollment objective, has grown from perhaps 10-15 enrollments a day a few weeks ago to 40-50 a day now. If this new higher trend continues, such a plan would sign up only another 12,000 people toward the 100,000 objective by March 31. Backroom error rates being committed by Healthcare.gov, when enrollment data are transmitted to the health plans, are still far too high to transition to high volume processing without serious customer service issues.

So, pick your perspective. Most importantly, Healthcare.gov is not ready for what could come in just two weeks when, between December 1 and December 15, everyone expects massive pressure on the federal Obamacare enrollment and administration site so people can get coverage by January 1.

My independent survey of health plans also matches comments by CMS Deputy Chief Information Officer Henry Chao today at a House hearing that 30% to 40% of the IT systems needed to support Obamacare still must be built. He also said that, “We [CMS] still need to build the payments systems to make the [subsidy] payments [to the health plans].”

I have been hearing reports from plans that CMS has said that the enrollee subsidy information was going to be mailed to the plans but I frankly didn’t believe it. Chao went on to say that other backroom functions, including accounting systems, were not complete.

That would be like a bank starting business and attracting customers without finishing their ability to send their customers’ monthly statements.

Chao’s comments just underscore the risk for considerable backroom and therefore customer service issues when volume picks up.

We can all debate whether 2 million, or 7 million, or 12 million people would like to sign-up for Obamacare before the end of open enrollment on March 31. But, I think everyone can agree that hundreds of thousands, if not millions, of people urgently want to get signed up by January 1. Heck, at least 5 million people have already received cancellation noticeswith many still needing to purchase new coverage, or perhaps take an early renewal offer, by December 15 so as not to have a break in coverage.

That so many people have to re-up their coverage, having received a cancellation letter, is clearly driving much of the latest enrollment. Health plans are reporting as many as half of the latest enrollments, both through the exchange and direct to them, are current customers looking to purchase Obamacare compliant plans––and therefore not a net gain toward the 7 million objective.

Enrollment in the states that run their own exchanges also seems to be surging in November. Covered California, a state-run exchange, reported this week that its enrollment shot up in November. The Los Angeles Times reports that sign-ups nearly doubled in that exchange in early November from October’s 31,000.

One would expect such a surge since 1 million people in California’s current individual health insurance market have received cancellation notices and must change their coverage in the short-term to avoid becoming uninsured. Ironically, much of the latest interest in signing up for Obamacare is coming from people who have had their coverage cancelled because of the new law’s requirements.

One might argue that the appropriate enrollment goal for this first open-enrollment period might better be the 7 million the Obama administration has set for people now uninsured plus the 5 million that have so far been cancelled.

Robert Laszewski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. You can read more of his thoughtful analysis of healthcare industry trends at The Health Policy and Marketplace Blog, where this post first appeared.

8 replies »

  1. they’re going utilizing evrythng. All of my good friends outside with The country of italy require oreo 5s, hee hee ;. . .))

  2. Sign up problems aside BCBS of NC just announced premium increases due to, “you can keep your plan”. 16% to 23% on top of the higher premiums already in place due to Obamacare. NC has some of the highest rates in the country and this will just make things worse for residents – especially those not getting subsidies. The higher rates may push some additional people into subsidy if they mean more than 10% for individual income.

    Thank you Mr. President.

  3. You’re killing me, Bobby :(. We really don’t intentionally do this.

    Always an e-mail away (maithri@thehealthcareblog.com).

  4. 2 attitudes that fit the agenda here:

    1. The needs of the few screw the needs of the many.
    2. Decisions in haste almost always lead to outcomes of waste.

    There are your 2 campaign slogans for the Democrat incumbents for 2014.

    As I will say until sanity and responsibility return to public office as a whole, we have 40% of registered voters who extensively believe in either torture without accountability, or, taxation without restraint.

    They are your neighbors, your colleagues at work, your various business owners and their employees, and certainly your politicians. And they direct the public discourse, and you being silent or being apathetic only encourage and embolden deeper attitudes of an antisocial bent.

  5. “Is CMS Deputy Chief Information Officer Henry Chao STILL being required to testify at Darrell Issa’s monkey court hearing instead of being able to get back to his job of improving the above reported IT issues with Healthcare.gov?”

    My how Republicans are up in arms about consumers not getting the coverage they need from a program Republicans want to destroy so consumers cannot get the coverage they need.

    That said, we cannot let the administration off the hook for this Titanic incompetent cluster “F” of a needed program. The President continues to show his stupidity by the, “you can keep your plan” plan and if he were a real CEO his board would fire him with no golden parachute.

  6. Very nice write-up Robert. Based on your survey and Chao’s comments volume is going to create a real mess.

    I saw something to the effect recently that CGI had not paid enough attention to the subcontractors in terms of making sure all the components work together properly.

    Any idea if this is accurate?

    Someone also told me that there was no standard API for orgs (IRS, insurance, etc.) connecting to the back end of the hub and if so another big source of problems.

    Do you have any idea of how well the source code has been written and documented? If the code is poorly written, proprietary, etc. then it will be a nightmare to fix.

    Then there’s the issue of cybersecurity and it doesn’t sound like this is where it needs to be, which opens the site up to cybertheft/terrorism.

    In general, with poorly architected software you can patch bugs/make fixes, but new ones will keep coming up particularly with volume. Sometimes it’s better to start from scratch.

    I understand the need to get the site up and running quickly, but if the problems I mentioned above are accurate then it’s better to take the short-term hit from the right on not meeting the 11/30 deadline than a much worse hit if the website implodes in December from volume.

  7. Is CMS Deputy Chief Information Officer Henry Chao STILL being required to testify at Darrell Issa’s monkey court hearing instead of being able to get back to his job of improving the above reported IT issues with Healthcare.gov?

    I would have thought Issa had wrung out every bit of partisan bickering and snide remarks he could from the issue the last couple of weeks, now that he struck out with all his other witchhunts.