The Health-Care Mess: More on What Went Wrong, and Why

"Trust me, we're not freaking out."

Following this item about the political, technological, and cultural factors that led to the problems of the Obamacare launch, readers weigh in.

1. The UK lesson: Government sites don't have to fail. An American-expat reader writes:

With respect to your recent post featuring commentary about the ability of the government to create useful, functioning websites, I would like to suggest the importance of stressing that this is not necessarily a problem for other large, developed countries elsewhere in the world. 

I have lived in the UK for more than six years, and although my sample size of experiences in both the US and the UK is small, I am frequently shocked at how much more useful UK government websites are than those I have encountered from the US federal government (as an expat, I now find myself needing to access US federal websites far more than I ever needed to as a resident citizen).

It is interesting that you cite EFTPS as an effective website. I tend to agree with you that EFTPS works well, but it appears to be the only useful website within the US federal tax regime. In the UK on the other hand, the entire HMRC (the equivalent to the IRS) website is quite useful and works well even for individuals. The IRS website, as far as I can tell, only works at all for tax professionals. 

I would not struggle to be able to suggest other contrasting examples, but for the sake of brevity I will not do so. However, I think this comparative failure of government in the US, relative to other developed nations, is yet another striking symptom of a liberal society that tends to view government more as a necessary evil rather than as a tool available, when employed properly, to assist individuals and improve society. 

PS—In the name of balance, I will offer up the PubMed database as another important and well executed website maintained by the US federal government. 

2. When competence really counts. A reader in the U.S. writes:

If Obama had run his campaign the way he ran the Obamacare rollout he would have been crushed. The Obamacare rollout worked/is working about as well as Romney's "Orca".

3. Oh calm down. A reader inside the industry writes:

It’s a bit strange to see all the hyperventilation and bloviation about the ACA rollout.  I work for a health insurance carrier that is participating in the marketplaces and trust me … we’re not freaking out.  We’ve always expected initial enrollment to be slow … we don’t expect it to pick up till Dec-Jan, and there are 3 separate federal risk mitigation programs that will back-stop our losses if the risk pool in year 1 skews more towards the sick.

This new transitional policy basically creates two choices:

1.   Choice # 1 – insurance commissioners (IC) now have the discretion to allow health plans in their states to sell non-ACA compliant policies in the individual market to only those customers who are already on such policies.  These decisions will vary by state.  For e.g. in NY, pre-ACA individual market rules already included protections for pre-existing conditions etc. and so prices were high because only the sick were signing up.  Marketplace prices are lower in NY because the mandate allows insurers to price in the effect of the healthy joining the risk pool.  So in NY, most likely, the IC will not allow these non-ACA compliant policies to continue.  In TX, the reverse scenario will most likely happen.

2.   Choice # 2 – if the IC in a state decides to allow insurers to sell non-ACA compliant policies, then insurers have to decide whether in fact they will continue to do so. 

a.      Insurers may decide it’s too big of a hassle to reinstate canceled policies.

b.      If some of the policies have not been cancelled yet, insurers may decide to renew them with price hikes or changes to benefits and coverage that the customer may not like and which could induce them to not renew the policy.

c.       If insurers continue selling these policies to existing members who have them, they have to inform them in writing about their non-ACA compliant features e.g. exclusions for pre-existing conditions, gaps between the benefits covered and essential health benefits guaranteed in the marketplaces, etc.  Some customers may decide its worth paying extra for protections for pre-existing conditions, more expansive benefits, lower and capped out-of-pocket maximums, etc.

d.      Insurers, it seems, have priced in the likelihood of moving a large portion of their individual market business to the marketplaces.  They may be loath to undermine this pricing strategy especially when they can get some extra premium from their currently healthy customer in the marketplaces (there are revenue goals to be met!)

As one of your readers has noted, filing insurance products is extremely labor intensive.  Insurers made the decision to cancel these plans a long time ago…that train has left the station, and it’s really hard to see them reversing course.  Remember also, the individual business forms a small slice of most insurers’ book of business (employer and Medicare/Medicaid dominate), so it’s hard to see them expending valuable resources on this effort.  Additionally, most state insurance departments run pretty lean too, so it would be impossible for them to have the bandwidth to review and approve these products in time for 2014. 

Bottom line, how much of the individual market risk pool is preserved by this policy or how much of the marketplace risk pool is undermined is far from clear and will be the eventual function of a combination of multiple decisions on the part of regulators, insurers, and customers, which are pretty hard to predict at this point.  In the end, the overall impact may be minimal.

Generally, this transitional policy seems like a “save face” measure by the White House that will end up having potentially the same outcome as if the transitional policy was never announced. 

4. Maybe it's all sandbagging:

I read the editorial [claiming sabotage of the law] you linked in your post about the failures of the AHA website.  It shouldn't come as any surprise if this is true, as the Senate Republicans have been publicly sandbagging the administration for some time now.  How different is this from the situation in Egypt, where President Morsi was essentially sandbagged by the deep state and infrastructure that was installed by the previous dictators?

5. Or maybe not:

I worked in state government for around 20 years. I finally decided that I'd rather die than keep working there, so I quit. That was in July of 2005, and I haven't worked again (or died, yet, as far as I can tell).

The fundamental problem must be the structure of It has to be typical.

Government is command-driven, top-down, laden with politics and middle managers, and oriented toward keeping up appearances. As the IT director of one agency told all of us employees in a quarterly meeting, "Our number one priority is keeping up appearances." This is true. I was there. He said it.

Software development is about intelligently and agilely blending technical expertise and creativity, and inventing whatever solution works. Solutions are created by defining success and working backward to find a route leading to that success.

In government projects, everything is overridden by expressing power, by back-stabbing, and by saving face. After setting an irrational deadline....

It is true that one woman can produce one baby in nine months. It is equally true that nine women can produce one baby in one month. Assuming 10 health plans per state for 50 states, and three shifts per day, that means the President needs 13,500 women sweating it out to meet his November deadline.

6. The offensiveness of "I don't write code."

I was a programmer, analyst, etc. for 45 years until I retired at the end of 2011, and the last several years of my career were spent to a large extent working out EDI [Electronic Data Interchange] communications between my employer and numerous vendors of our products (Amazon, Kohl's, WalMart, etc.), so I have somewhat an image of what is required behind the scenes. 

I know that every single transmission with every single insurance company would require personal communication and intensive testing, of both successful and unsuccessful transactions, to be sure everything is working on both sides.  And even though EDI forms are predefined, each customer may use them a little differently or may require additional information, so it's not a one-size-fits-all situation.  What with all the communication and testing required, it could be done in a week with one customer or take several weeks with another, depending on communication response on the other end.  It's clear not enough time was allowed for all of this to take place with every single insurance company, each state agency, etc.

But over and above that I am furious that Obama allowed this to be botched in the first place, and that now he is apparently "piling on" by announcing a fix that is unworkable (the extension of policies), apparently without running it past insurance companies first.

I even took the quote below (from a TPM post) personally.  Obama is almost implying that the programmers working on the job were incompetent, and that if he were a coder, he would be the super-duper kind of coder that would be able to fix all this up in nothing flat.  It really drove home to me his apparent arrogance in a way that all the right-wing rants I get from relatives and friends could not.  It brings back the quote from early on when he said he would think of himself as a better speechwriter than his speechwriters, etc.

"Now, we've had this problem on the website," he said after touring the Port of New Orleans. "I'm not happy about that. But we're working overtime to make sure that it gets fixed because right now, we've put in place a system, a marketplace, where people can get affordable health care plans.

"I promise you, nobody has been more frustrated," he added. "I wanted to go in and fix it myself, but I don't write code."

7. What's getting overlooked. From a reader in California:

The sad thing in all this is so little mention of ACA killing off the lifetime $1M cap on benefits that is so common now. 

My last boss's husband, a professor, average 60ish guy, not obese, daily walker at least, bent down to pet their dog, and something went so awry in his back that he faced paralysis, managed to dodge that, but I suspect a cane is permanent and they modified their bungalow to add a wheelchair ramp.  His tab went over $1M in about 3 weeks of the ultimate ~6 month ordeal.  Luckily the [place where he worked] had a better policy that did not have the $1M cap, or he'd have been f**ked.  So all these people wanting to keep their cheap policies are buying much less security than they think.

And in many less consumer-friendly states, individual policies can be dropped by insurer in the event of a "shock claim" such as an AIDS pneumonia - they'll cover the pneumonia then drop the insured like a leper.  This is all mooted by the guaranteed issue nature of post-ACA policies, but individuals are badly informed and, as per usual, being stoked along by Fx news and spineless Dems.