Can An Army of Private Programmers Fix Obamacare?
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By Josh Boak and
The Fiscal Times
October 21, 2013

Over the past three weeks, Obamacare seems to have combined the annoyances of government bureaucracy and the health insurance industry to create a huge snafu that federal officials have only weeks to fix.

Multiple reports have documented a series of logistical absurdities with the federal online health insurance exchange. Badly built software causes browsers to crash, frustrating would-be applicants. The White House celebrated high traffic levels on Oct. 1, but just 0.4 percent of visitors successfully enrolled and traffic is now tailing off, according to the analytics firm Millward Brown.

A frustrated President Obama intends to discuss his plans to address these shortcomings on Monday, while Democratic lawmakers tout the web traffic as proof of public interest.

All of his rhetoric is meaningless unless—in the next 55 days—the $292 million federal insurance exchange attracts more applicants. The exchanges are scheduled to complete insurance registration by Dec. 15 for coverage starting on Jan. 1, although the exchanges would continue to accept applications through the end of next March. The exchanges so far have produced window shoppers, but not enough real insurance customers.

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“Actually getting them to pull the trigger and get it done is the hardest part,” Bill Hammet, president of the California-based Hammet Health Insurance Services, said Friday at an insurance industry conference in Washington

The Obama administration likes to highlight the millions of unique visitors to the online exchanges, but it only plans to disclose how many successfully applied and qualified for coverage on a monthly basis.

Treasury Secretary Jack Lew pledged on Sunday that the Health and Human Services Department “has to fix this.

“Let me say that the huge outpouring of interest shows how important it is that we get this right,” Lew said on NBC News’ “Meet the Press.” “There are millions of Americans who want health insurance. It's important for our economy for them to have health insurance. I think that there's no one more frustrated than the president at the difficulty in the website.”

Lew said that the real test is how many Americans have coverage by January, but he declined to specify what that figure would be. The administration has only released data saying that 476,000 Americans have applied in some form.

“That tells us no information for how many people have enrolled and that is a very relevant matter, because if enough people don't sign up for these exchanges, the rates on these exchanges are going to be astronomical and they're going to undermine the entire private health insurance industry in the country,” said Sen. Marco Rubio (R-FL) on “Fox News Sunday.”

The Congressional Budget Office established two simple benchmarks for Obamacare to meet in its projections last February: 1) 7 million Americans would receive private insurance through the exchanges; and 2) 8 million more Americans would enroll in Medicaid and the Children’s Health Insurance Program. That means 15 million Americans total would have health insurance coverage.

The administration is currently on pace to get a fraction of those projections.

Millward Brown estimates that just 36,000 Americans bought insurance through Obamacare during the first five days of the online exchanges. Just 2 percent of the 9.47 million unique visitors to the federal exchange during that period even began the application process. 

So this means that during the first week, a mere 19 percent of those who applied were able to complete the forms and qualify for coverage. There is no evidence as to what the ratio has been in the weeks since, but, at the pace of the first week, then the government will fail to hit the CBO estimates.

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An internal administration estimate obtained by the Associated Press had predicted that 500,000 Americans would enroll with the exchanges during October.

It’s also critical to note that the 476,000 figure released by the administration over the weekend was drawn from both the federal and 15 state online exchanges, including Washington, DC.

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According to The Advisory Board, a consulting firm, 130,000 people applied for coverage through the state-based exchanges through the middle of last week. Based on state data, 48,457 had picked an insurance plan.

That translates into 37 percent of applicants getting insurance, significantly higher than the 19 percent rate during the first week at the federal exchanges. Back of envelope calculations show that roughly 40 percent of applicants will need to buy insurance for the program to reach the CBO targets.

The state exchanges appear to be in much better shape than their federal counterpart, though some states have been more successful than others.

Kentucky’s online marketplace, for example, has been nearly glitch-free—with more than 10,000 people successfully enrolled on the first day alone. In Oregon, the state’s new marketplace managed to cut its uninsured rate by 10 percent in the first two weeks.

Other states, however, have not faired so well.

Hawaii’s marketplace opened two weeks late and was in such bad shape that it was using paper applications and referring people to insurers’ websites for pricing up until Wednesday due to a spate of technical errors. Its website was designed by Canadian-based CGI, the same contractor that built the federal exchange’s site.

The flawed website isn’t just causing headaches for consumers. Insurers say the problems go beyond software glitches, and traffic issues. The site has been generating inaccurate data, reporting spouses as children, duplicating enrollments and missing data fields--making it difficult for insurance companies to process enrollees.

In fact, Blue Cross & Blue Shield of Nebraska said it had to hire temporary workers to contact new customers directly to correct the inaccuracies in the submissions, according to The Wall Street Journal. Other insurers like South Dakota-based Avera Health Plans are calling each of their incoming customers to make sure the data are correct.

But it’s unlikely that these states can save a federal site that must enroll people living in states such as Texas, Missouri and Ohio that have actively fought the implementation of the law.

Health and Human Services posted a blog item on Sunday saying that it planned for a “tech surge” to improve its federal exchange that services a total of 36 states. 

“Our team is bringing in some of the best and brightest from both inside and outside government to scrub in with the team and help improve HealthCare.gov,” the agency said.