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On October 1st, the federal government launched healthcare.gov, which allowed for Americans in 36 states to find healthcare policies that were congruent with the requirements of the Affordable Care Act, also known as Obamacare. By March 31st, all Americans are required to purchase health insurance or pay a fine. Although conservatives challenged this individual mandate in court shortly after the Affordable Care Act was signed into law in March 2010, the Supreme Court found it constitutional last summer as a tax. President Obama hoped that the national exchange would lead to millions of Americans signing up for health insurance and that it would generate good press for his landmark achievement. However, the website has been riddled with problems, ranging from individuals being unable to create accounts to access the exchange to time outs to slow browsing speed. States that are running their own exchanges, like Washington, Kentucky, and California have also experienced some technical difficulties. Conservative critics have seized on the problems of healthcare.gov to bolster their political fortunes after the government shutdown and if these problems are not fixed it could imperil the Affordable Care Act.
Extemp Central has broken down the politics of healthcare reform in the past and extempers are urged to check out our previous briefs on healthcare reform. This brief will dive into the current controversy by breaking down the problems of healthcare.gov, the impact these problems could have on the success of the Affordable Care Act, and the potential political fallout in Washington D.C. if these problems are not fixed.
Readers are also encouraged to use the links below and in the related R&D to bolster their files about this topic.
Website Flaws
The federal healthcare exchange launched on October 1st in the midst of the government shutdown, which was predicated in part because of Republican opposition to Obamacare. Republicans initially sought to defund the measure and then wanted to delay the individual mandate. All of this was broken down in two briefs over the last month by Extemp Central. The reason that the federal government is running a national exchange is because thirty-six states, mainly those led by Republican governors, refused to set up their own health insurance exchanges. The result is that the federal government had to create a website (healthcare.gov) that could handle massive amounts of traffic. Democrats have already blamed Republicans for causing the problems on healthcare.gov because of their refusal to handle their own healthcare marketplaces. When the website launched, millions of Americans were eager to see what it would cost them to purchase health insurance and the Guardian of October 25th reveals that healthcare.gov received 14.6 million visitors in its first days of activity. However, those using the website soon experienced errors that prevented them from creating accounts to access the prices of different health insurance plans, frozen webpages, and error messages.
The website was initially handled by the Centers for Medicare and Medicaid Services (CMS), which is an agency within the Department of Health and Human Services, with the help of some private subcontractors. The Washington Post argues on October 25th that this was a recipe for disaster because CMS did not have experience in managing large information technology because it was a federal agency that was relatively inexperienced in these matters. During hearings last Thursday, those private subcontractors that worked with CMS revealed to Congress that the website did not go through enough rigorous testing to ensure that it could handle sizeable amounts of traffic. Instead of testing the website over the course of months, contractors allege that CMS only did two weeks worth of tests, which was not enough to work out glitches with the website. On Friday, President Obama announced that one of the subcontractors used for the project, Quality Software Services, Inc. (QSSI) will take over the website and Jeffrey Zients, a former director of the Office of Management and Budget (OMB) will supervise the effort. QSSI handled the account registration setup of the website and some of the data hubs to connect federal, state, and insurance company databases. Since it worked on the website, they were chosen to handle the fixes since they know more about the website’s infrastructure than an outside agency. Zients is a troubleshooter for the Obama administration when handling bureaucratic problems, so his entry into the healthcare debacle has been well received.
Zients argues that healthcare.gov is fixable, but that there are significant issues to work out. A separate article in the Washington Post of October 25th has a nice chart for extempers files that shows how the data processes on healthcare.gov work and where some of the problems exist in the system. The article goes on to say that Zients mentioned dozens of issues that need to be fixed, but that some are getting better, like the account registration process. On healthcare.gov, an individual has to create an account in order to view healthcare prices. This was not how the original website was supposed to be set up, but the Christian Science Monitor on October 24th reveals that this “window shopping” choice was taken out of the website. Critics allege that the government required individuals to set up an account before looking at healthcare plans so that they were not shocked at the high prices of insurance, some of which may not be so high in reality because the individual may qualify for subsidies to reduce the cost. Helping people avoid this “sticker shock” was seen as a way to maintain positive feelings among consumers about the Affordable Care Act. Zients argues that 90% of the people trying to create an account are now able to do so, but bigger issues remain. One of these issues is that insurance companies are getting erroneous reports from the website about those who have enrolled. Insurance companies are receiving duplicate information, incomplete enrollment forms, incorrect information about enrollees, and conflicting reports that say people have signed up and/or cancelled their coverage. This points to larger errors within the website as information is not being shared effectively between the federal government’s website and the insurance industry. There have also been reports that the government website is telling some consumers that they qualify for subsidies when they do not and is not enrolling the proper people in Medicaid-type plans. The result is a headache for insurance companies, delays for consumers that have managed to get through the website, and is creating a backlog on giving people timely coverage.
Conservatives and privacy advocates have also warned that the website is not secure enough from hackers and that the information individuals provide about their income, marital status, health issues, and other issues will be compromised. The Christian Science Monitor explores this issues in two articles on October 14th and October 24th. Technology experts allege that the website is vulnerable to attackers looking to access cookie information about users, that there are very few protections against automated programs that can keep trying to enter a website if they get login information incorrect, and that there are vulnerabilities that may let hackers direct people to renegade websites that will steal their personal information. Republicans last week raised the issue of whether information solicited through healthcare.gov has a reasonable expectation of privacy for consumers and if the website violates the Health Insurance Portability and Accountability Act (HIPAA) that is meant to safeguard American’s digital information. While most Democrats were hostile to this line of attack, at few have also echoed similar concerns, especially after reports that some sensitive healthcare information has already been accidentally e-mailed to third parties, which included Social Security numbers.
Extempers should keep in mind that just because the website is not working does not mean that Obamacare has ground to a standstill. President Obama in the Rose Garden last week urged Americans to call 1-800-318-2596 (which right-wing forces have made sure to note spells a curse word that starts with the letter “f”) or show up in person to enroll. The New York Daily News on October 20th explained that the White House has increased the staffing at healthcare call centers by 50% to cope with people using a phone option to register for insurance instead of online marketplaces. The Los Angeles Times on October 21st argues that these forms of purchase can help boost the enrollment numbers for Obamacare and it also criticizes some of the right-wing stories that have been perpetuated about Obamacare pertaining to its impact on small business and regular consumers. The Times is correct in explaining that there are other ways for people to access healthcare, but it is highly likely that only the very sick are going to use these objections and jump through these hoops to access insurance coverage. Healthcare experts fear that younger, more healthy Americans may not have the patience to put up with this system and may not enroll.
Impact of the Website’s Problems on the Affordable Care Act
The Guardian previously cited argues that 700,000 applications have been started nationwide for health insurance through the Obamacare exchanges, of which 50% have gone through the website. The problem is, though, that not all of these people have enrolled for coverage due to website errors or they have reasoned that the costs of purchasing health insurance are too high. Reporters from all ends of the political spectrum were highly critical of the White House last week for not releasing numbers on how many Americans have enrolled in coverage. The Obama administration has argued that people are getting through the website and acquiring coverage, but by refusing to release hard data they are creating a devastating media cycle where their estimates do not correlate with reality. The administration has announced that they will release enrollment numbers at the end of November, with the goal of getting seven million Americans signed up for coverage, but the delay in releasing those figures is not helping the administration from a public relations standpoint.
One of the biggest problems with the website delays it that is it going to create a nightmare for insurance companies that may have to cope with a backlog of enrollments if the website begins working properly. For those that want to obtain healthcare coverage by January 1, 2014, they will need to enroll in a policy by December 15th. The administration expected many Americans to enroll late, but since sizeable numbers of Americans cannot register right now with the website down, this is going to make that late rush even bigger. As the Washington Post of October 25th explains, significant delays may occur as insurance companies file forms, send out payment notices to new customers, and make insurance cards.
The Economist on October 5th provided a great overview of Obamacare and its functions, so extempers should read and print this article for their files. The Economist also published an article on October 22nd that compares the American healthcare system with the Dutch healthcare system, which is a great article to have if you want to make a comparison argument in your speeches about healthcare. These two articles aside, the prices of health insurance plans on the exchanges has drawn criticism from some Americans. Those that do not qualify for subsidies through the exchange, which go up to $46,000, or 400% of the poverty level, will have to pay for their insurance, but some Americans are complaining about higher premiums, which are their monthly payments for coverage, and higher deductibles, which is the amount that a consumer pays in medical costs before insurance covers the rest of the tab. There are stories circulating that an individual might pay more than $200 a month for a health insurance package that has a $7,000 deductible, meaning that this insurance is virtually worthless barring a catastrophic accident where an individual incurs more than $7,000 in medical costs. Some states are seeing insurers cancel policies for existing customers because of the legislation and the new policies on the federal and state health insurance exchanges have a set number of things that must be covered in the insurance policies, which has the effect of raising the prices for some younger, healthier Americans that do not need all of the coverage that these policies offer. Since each state has different insurance plans offered based on doctors availability, expectations of how many pre-existing sick people will enroll (because Obamacare prevents insurance companies from rejecting those with these conditions), etc. there are variations in how people are impacted by the pricing of their plans. The Economist on October 5th explains that a 27 year old in Wyoming will pay $286 a month for a health insurance policy, but a 27 year old in Kansas will pay $130 a month.
The way that all of this links to the website is that younger, healthier Americans that rarely need medical care and constitute a good chunk of the nearly fifty million Americans that lack health insurance may feel that this program is not worth their time. These Americans may opt to pay the fine, which will be $95 this year or 1% of their income, whichever is greatest, instead of participating in the exchanges. Since those reading this brief are likely teenagers, you are aware that your peers in school have short attention spans and do not like delays. Teenagers and younger Americans do not like buffering on their YouTube videos and they do not care for slowing browsing speeds. This low tolerance to put up with technical errors may result in younger Americans, who are not covered by their parents health insurance until they are twenty-six, deciding to give up on participating in the exchanges, at least in the short-term. This would be catastrophic for the law because insurers are banking on younger Americans paying into their plans to make up for those with pre-existing conditions that are sicker and will go to the doctor more often. The entire idea for the Obamacare plan is to have these younger workers subsidize the care of sicker individuals and broaden the risk pool in health insurance plans. If this does not happen within the first year, premiums will rise even further because of the lack of health people in these insurance plans, and that will cause even more Americans to pay the fine rather than pay for an expensive health insurance plan that they do not feel they need. For example, a 27 year old may opt to pay a $95 fine, which will rise to $695 by 2016 and will be indexed to inflation thereafter, instead of paying for an insurance plan at the level of a new car payment each month. This entire situation would create a “death spiral” in the insurance markets, as premiums skyrocket, people flee the exchanges, and the number of uninsured Americans rises instead of going down. All of this would signal the death of the Affordable Care Act and would be a disaster for President Obama’s legacy, which is why his administration has put an emphasis on enrolling young people in the insurance marketplaces. This is the real benchmark for success, so extempers should carefully watch the administration’s report on enrollment figures in late November because that will identify if this program is working or not.
Therefore, the website’s difficulties may only be temporary, but they may drive younger Americans out of the healthcare exchanges and this could create higher premiums later. These problems may also cause middle-class Americans and others in different age brackets that are relatively healthy to avoid the system entirely, at least for the first year, and that could result in higher premiums as well. The longer the delays in the system, the harder it will be to implement the Affordable Care Act on time, and this could spell disaster for its long-term viability.
Political Impact of the Website Errors
The website debacle puts President Obama in a difficult position opposite Congressional Democrats, who fear taking a beating in the 2014 midterm elections if the website’s errors cannot be fixed. The website’s problems appear to justify latent American suspicions of big government, as they view it as wasteful, inefficient, and inept. The website’s errors also justify Republican critiques that there should be a delay in implementing the Affordable Care Act, critiques that produced the government shutdown. Since President Obama held firm, with the assistance of Congressional Democrats, against these demands, they are now on the defensive in explaining why a delay on the individual mandate is not necessary. After all, how can the administration justify that Americans purchase health insurance when the infrastructure to help millions of Americans purchase insurance is not working?
Democrats are unified after the government shutdown and Republicans appeared to be on the defensive, but as Politico explains on October 21st, all of that might be changing because Democrats own the Affordable Care Act after passing it on a party-line vote. The Christian Science Monitor reveals on October 24th that Democrats in vulnerable states for the 2014 midterms are already calling for the administration to delay the individual mandate. Ten Democratic senators in vulnerable areas, which include Mark Begich (Alaska), Kay Hagan (North Carolina), Mark Pryor (Arkansas), have rallied behind Senator Jeanne Shaheen’s (D-New Hampshire) call for an extension of the individual mandate. Senator Joe Manchin (D-West Virginia) has proposed to delay the mandate as well. The administration appears to be waffling on this issue, as they announced last week that people had until March 31st to purchase health insurance. Observers of the law originally felt that the March 31st deadline meant that an individual had to have a policy that was in effect by March 31st, which means that they needed to sign up for coverage by February 15th. If the website problems persist, President Obama may be forced to delay the individual mandate, which would significantly weaken the Affordable Care Act, put insurance companies finances in jeopardy, and that would constitute a propaganda victory for the Republicans. The delay, though, would still have a constitutional question about how the executive can delay parts of legislation by fiat.
The Chicago Tribune explains on October 20th that members of the Obama administration will be touring the country in recent weeks to encourage people to register for insurance, but this tour could run into problems if the website’s problems are not resolved. The administration is amazed that there are many Americans that are not aware of the legislation’s benefits. The Los Angeles Times explained on October 21st that a recent Gallup poll found that seven out of ten Americans that were presently uninsured were not familiar at all or not too familiar with the online marketplaces. This could create a public relations disaster for the administration if these individuals do not sign up because it would lead Republicans to charge that Obamacare is not significantly reducing the numbers of uninsured Americans.
There is also the question of who should be held responsible for the website problems. Republicans have directed more of their ire at former Kansas governor Kathleen Sebelius, the secretary of Health and Human Services. Sebelius is set to testify before Congress over the website flaws next week, but Republicans were infuriated that she did not testify in the House hearings on the website glitches last week. The National Journal of October 26th provides an entertaining, yet insightful article about who should be fired over the website debacle, listing pros/cons for figure figures involved in the process: Sebelius, Marilyn Tavenner, administrator of the CMS, Gary Cohen, direct of the Center for Consumer Information and Insurance Oversight (CCIO), Henry Chao, Chief Information Officer of the CMS, and Jeanne Lambrew, Deputy Assistant to the President for Health Policy. There is the chance that President Obama will not fire anyone over the website flaws, as he has been fiercely loyal to his cabinet through problems. For example, he named Susan Rice as his National Security Advisor when she did not have enough votes to become the Secretary of State. He has also stuck by Attorney General Eric Holder in the midst of vicious Republican attacks against the way that Holder has managed the legal activities of the Justice Department. Nevertheless, by not firing anyone over the issue, President Obama runs the risk of appearing weak and insulated from events surrounding him, which may reflect poorly on his leadership abilities to the American public.
CBS News in an article republished from Slate on October 21st concluded that the website problems might be a sign of bigger problems within the administration and that President Obama could become a victim of his own spin. The rollout of the Affordable Care Act has failed to validate President Obama’s early promises about his healthcare reform effort. For example, he pledged that Americans could keep their health insurance if they want to, but thousands, if not millions, of Americans are finding that some of their health plans are being cancelled and they have to search for new policies on the exchanges. The President has also insisted that the plans on the exchange are good, but critics argue that the plans are outrageously priced for those that do not qualify for subsidies and do not provide the same quality of care as pre-Obamacare plans. The President is also under attack from labor unions, who do not want to see their generous healthcare plans taxed and fear that Obamacare may be eroding the forty hour work week as employers refuse to hire more than fifty full time workers to avoid having to offer health insurance. CBS and Slate conclude that President Obama’s gifts of rhetoric and political skill may not get him out of this problem, which requires organizational leadership that he has shown to be deficient in thus far in his presidency. They argue that he cannot blame this problem on Republicans, George W. Bush, or a rich corporation. I would say that this assessment in unduly harsh on the President, but President Obama does face a crisis here that will test his leadership ability and his ability to immediately correct problems that jeopardize his most significant legislative achievement. The Democrats lost their House majority in 2010 over this legislation, as well as state governor’s mansions and state legislatures which, as the National Journal of October 24th writes, paved the way for the worst redistricting map for Democrats in modern history, so President Obama must make the legislation work to ensure that this sacrifice was not in vain.