Obamacare Enrollment Problems Might Be Blessing in Disguise

If front-end problems are fixed quickly, back-end issues will be more apparent.

US President Barack Obama speaks about immigration reform in the East Room of the White House in Washington, DC, October 24, 2013. The President renewed his call for Congress to pass sweeping immigration reform.
National Journal
Sam Baker
Oct. 24, 2013, 1:49 p.m.

Quickly fix­ing Obama­care’s most vis­ible prob­lems could be a dis­aster for the health care law.

By now, pretty much every­one knows that Health­Care.gov, the main portal to ac­cess the law’s new in­sur­ance ex­changes, doesn’t work. When the site first launched, hardly any­one could cre­ate an ac­count to be­gin shop­ping for cov­er­age. And though the re­gis­tra­tion prob­lems have got­ten bet­ter, en­roll­ment is still an up­hill climb.

The site’s dis­astrous front end has over­shad­owed an­oth­er set of ser­i­ous prob­lems on the back end. In­sur­ance com­pan­ies say they’re see­ing wide­spread er­rors in the trickle of ap­plic­a­tions they do re­ceive through the ex­changes.

And un­til those er­rors can be fixed, it might be best to leave en­roll­ment at a trickle.

“Is CMS stu­pid enough to fix the front end of this thing be­fore they fix the back end?” asked Bob Laszewski, a health care con­sult­ant who works closely with in­surers.

In Laszewski’s view—and he’s hardly alone—the fact that users can’t eas­ily log in to Health­Care.gov is a bless­ing in dis­guise. Sure, it’s a polit­ic­al and pub­lic-re­la­tions head­ache for the White House, but leav­ing the back-end prob­lems un­checked could be a big­ger one.

In­sur­ance com­pan­ies are see­ing a range of er­rors in the ap­plic­a­tions they re­ceive through Health­Care.gov. One an­ec­dot­al re­port said a man showed up as hav­ing three spouses, two of whom were ac­tu­ally his de­pend­ents.

In­surers also say they’ve got­ten an en­roll­ment, fol­lowed by a can­cel­la­tion, fol­lowed by an­oth­er en­roll­ment. They don’t know why, and in some cases, the vari­ous doc­u­ments don’t have time stamps—so the in­sur­ance com­pany doesn’t know which is the most re­cent and, pre­sum­ably, the ac­cur­ate trans­ac­tion to pro­cess.

CGI, the con­tract­or that built most of Health­Care.gov, down­played the back-end er­rors dur­ing a con­gres­sion­al hear­ing Thursday.

“We have un­covered a num­ber of those scen­ari­os—not sig­ni­fic­ant—but a num­ber of them. “¦ Most of them are isol­ated, not across the board for all in­surers,” CGI’s Cheryl Camp­bell said.

But an in­sur­ance in­dustry of­fi­cial said the prob­lems are ac­tu­ally much more wide­spread than Camp­bell in­dic­ated. In­surers simply don’t have much con­fid­ence in the data they’re get­ting, even the ap­plic­a­tions that don’t con­tain ob­vi­ous er­rors.

Laszewski ques­tioned wheth­er CMS is truly work­ing over­time to fix the site’s front-end prob­lems, in which case “they’re about to flood the in­sur­ance com­pan­ies with crummy data,” or quietly let­ting the sign-up prob­lems linger to help identi­fy and fix back-end er­rors.

The lat­ter would be the smarter move, he said, but it would also be an ac­know­ledge­ment of ser­i­ous prob­lems in the en­roll­ment pro­cess.

“They’re either really stu­pid or they’re smart. And if they’re smart, this is de facto shut down,” he said.

Right now, the flow of new en­rollees from Health­Care.gov is so slow that in­sur­ance com­pan­ies can mon­it­or ap­plic­a­tions by hand, track­ing down in­con­sist­en­cies one by one. But if hun­dreds or thou­sands of people start to come through the sys­tem, in­surers won’t be able to keep up—and they could end up get­ting the blame from angry cus­tom­ers for prob­lems they didn’t cause.

In­surers also don’t yet know the ex­tent of the ex­changes’ bad-data prob­lems.

Health­Care.gov batches and sends over all of its en­roll­ments every night. But only two of the state-run ex­changes (which total 14, plus the Dis­trict of Columbia) are sub­mit­ting en­roll­ments to in­sur­ance com­pan­ies; the rest are hold­ing off un­til at least Nov. 1, while they con­tin­ue to test their own sys­tems.

States are giv­ing each in­surer a sense of how many people signed up for each plan, but the com­pan­ies don’t know who their new cus­tom­ers are—wheth­er they’re the young, healthy con­sumers in­surers cov­et, or older, sick­er en­rollees who are more likely to file ex­pens­ive claims.

Chris Clark, the tech­no­logy pro­gram man­ager for Ken­tucky’s state-based ex­change—widely con­sidered one of the best in the coun­try—said the state and in­sur­ance com­pan­ies agreed early on to a delayed sub­mis­sion pro­cess. Ken­tucky is still test­ing the ac­cur­acy of the en­roll­ment forms it will sub­mit to in­surers.

“We’re very con­fid­ent that that pro­cess is go­ing to work smoothly,” Clark said.

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