5 Takeaways from This Week’s Obamacare Hearings
Congressional hearings dominated Washington’s political proceedings this week.
The focus of the House of Representatives’s Ways and Means Committee hearing on Tuesday was the status of the Obama administration’s implementation of the Affordable Care Act. In particular, Committee Chairman Dave Camp (D-Mich.) explained that “after spending over $600 million, the American people want answers to some very basic questions about the launch” of the cornerstone provision of the health care reform — the online marketplaces.
“Why doesn’t the [federal] website work? Why were the American people told everything would be ready, when it was clear that was not the case? How deep are the problems and how long will it take to get those problems fixed?” Camp asked. The committee spent more than three hours questioning Centers for Medicare and Medicaid Services Administrator Marilyn Tavenner, whose department was responsible for insuring the federally facilitated exchanges would be operational by the October 1 deadline.
Next, Department of Health and Human Services Secretary Kathleen Sebelius testified before the House of Representatives’s Energy and Commerce on Wednesday morning. The purpose of the congressional hearing was to address the issues of transparency and fairness, qualities critics said have been absent from the implementation of the health care reform law.
“Today’s hearing is about fairness for the American people who are losing their coverage or seeing their premiums skyrocket as high as 400 percent,” said the prepared testimony of Chairman Fred Upton, a Michigan Republican. “This hearing is also about transparency. While the administration continues to boast the number of Americans that have ‘applied,’ they intentionally withhold precise enrollment numbers. Why? These numbers are critical to fully understanding the status and gauging progress of implementation.”
One of the more memorable moments may have been when an exasperated Sebelius blurted out “whatever” in response to the repeated question of whether President Barack Obama was ultimately responsible for the botched rollout — but ultimately, what was more important was what was not said.
Despite hours and hours of testimony and questions, plus two admissions of responsibility, what lawmakers did not learn is how the federal contractors’ warning that the website was not ready for primetime failed to reach Sebelius’s ears, nor did they learn much about enrollment numbers. However, the congressional hearings did have a few key revelations.
1. A tale of two apologies
The first four weeks of the six-month open enrollment period for the individual markets were plagued by software errors that caused hours-long wait times, prevented potential customers from creating accounts and completing the 30-step enrollment process, sent insurers the wrong information, and made it difficult for customers to get an accurate cost estimate. But until Tavenner, no government official had publicly apologized.
“We know that consumers are eager to purchase this coverage and to the millions of Americans who have attempted to use Healthcare.gov to shop and enroll in health care coverage, I want to apologize to you that the website has not worked as well as it should,” she said during her opening remarks.
Sebelius took a cue from her apology.
“I am as frustrated and angry as anyone with the flawed launch of Healthcare.gov,” Sebelius began, temporarily diverting from her prepared statement. “You deserve better. I apologize. I’m accountable to you for fixing this problem, and I’m committed to earning your confidence back by fixing the site.” Her apology had the same sentiment that guided Obama’s speech in the Rose Garden of the White House on Monday, when he said, “Nobody is madder than me about the fact that the website isn’t working as well as it should.”
2. Enrollment figures
Initial sign-up numbers are expected to be low, but even the Department of Health and Human Services is not sure how many people have enrolled. Since the Affordable Care Act was signed into law in March 2010, the Obama administration has used the implementation of a similar health care reform in Massachusetts as a bar for the nationwide rollout.
It was the Massachusetts example that Tavenner referenced during her testimony to explain why initial enrollment numbers could be lower than originally expected. The Obama administration calculated that approximately 7 million people will enroll for coverage via the exchanges by March 31, the last day of the first enrollment period. But, similar to the Massachusetts rollout, the first period may be below the expected monthly average.
“We expect the initial number to be small,” Tavenner said during her testimony. “And I think you’ve seen that in our projection, and that was the Massachusetts experience, as well.”
Later in the hearing, the administrator expanded on that explanation. “The Massachusetts experience was very slow initially, and then it started to ramp up over time,” said Tavenner. “We expect the same type of projections.” A study conducted by the New England Journal of Medicine, which has been cited often by the administration, found that 123 premium paying enrollees signed up in Massachusetts during the first month, while 10,000 signed up for Medicaid plans or plans with no premiums.
Similarly, Sebelius said that the error-riddled federal website, Healthcare.gov, would likely mean low sign-ups for the first several weeks of the enrollment period. “Our projections prior to launch were always that there would be a very small number at the beginning,” the HHS secretary said. “We watched the Massachusetts trend, which started slowly and then built. I think there is no question that given our flawed launch of Healthcare.gov, it will be a very small number.”
Both Tavenner and Sebelius refused to give even the smallest indication of what current enrollment numbers look like. Both repeated time and time again that the data would be released in mid-November.
3) Improvements on the technical front
After making her apology, Sebelius returned to her prepared statement, listing a series of improvements HHS has made since the online insurance exchanges went live on October 1: additional IT staffers have been brought on, the site has been updated several times with new code that included “bug fixes,” and additional capacity has been added so that the the virtual “waiting room,” which has caused so many problems, could be removed.
The additional capacity allows the website to “to process nearly 17,000 registrants per hour, or five per second, with almost no error rates,” Centers for Medicare and Medicaid Services communications director Julie Bataille said on a Tuesday conference call with reporters from CNN. “So that’s the number of individuals who are completing that full account creation process, that first step in the application.”
To Tavenner, the bottom line is that “system is working” despite technical problems and glitches, as she said during her testimony. “We’d like for it to work better and that’s what we’ve committed to do by the end of November.” However, that stance galled Republicans on the committee, many of whom believe that the website’s technical problems illustrate a level of unacceptable incompetence.
4. Prelaunch warnings
The Obama administration was forewarned by federal contractors that the federal health care exchange was not ready for enrollment one month before it were scheduled to go live. Documents obtained by CNN, which described current risks and “outstanding issues,” showed that contractor CGI had said the testing timeframes were “not adequate to complete full functional, system, and integration testing activities.”
The documents also noted that the impact of the website’s problems were “significant.” Even more concerning was the fact that the committee was not given “access to monitoring tools” even though the company “repeatedly asked [the Centers for Medicare and Medicaid Services]” for access.
CGI’s warning to the government came concurrently with the appearances of several key CGI executives before Congressional panels. When Senior Vice President of CGI Federal Cheryl Campbell testified before the Energy and Commerce Committee in early September, she reassured lawmakers that the website would be functional. “We were told repeatedly that implementation was ‘on track,’ and it is now time for all those responsible to explain what happened,” said Upton in a statement last week.
Yet CGI agency spokesman Brian Cook told CNN that the report was “not a dire warning” but more a “list of things to do.” It is not clear whether those issues were resolved, although Tavenner said during her testimony that the website had been tested and that the agency was “comfortable with its performance.” The Centers for Medicare and Medicaid Services “knew all along there would be, as with any new website, some individual glitches we would have to work out,” she said. “But the volume issue and the creation of account issues was not anticipated and obviously took us by surprise. And did not show up in testing.”
However, her statement contrasts reports. Through sources familiar with the rollout, CBS learned that the system failed repeatedly during tests run in the days before the website went live.
The problems detailed by CGI and the failed tests run counter to what Sebelius told CNN medical correspondent Sanjay Gupta last week. When Gupta pressed the secretary about why the White House decided to move forward with the rollout even though the website had crashed while being tested with just a few hundred people logging in, she responded that “waiting was not an option,” and she was optimistic that the rollout would be smooth.
Since then, Sebelius has said she made a mistake when she told the president that the federal website was ready for the October 1 launch. “Clearly, I was wrong. We were wrong,” she said during her testimony. “We knew that in any big, new, complicated system there would be problems. No one ever imagined the volume of issues and problems that we have had and we must fix it.”
5. Policy cancellations
Given the opportunity to ask Tavenner about the implementation of the individual insurance exchanges and the $267 million computer system that facilitates the marketplaces, lawmakers’ questions focused on a wide range of issues relating to the rollout, from the partisanship of Congressional politics to the cancellation of private-market insurance policies.
In particular, Republican representatives on the Ways and Means Committees cited letters written by constituents who complained that they had received termination notices from their insurance providers.
Those cancellations were framed as a direct violation of the Obama administration’s promises. When campaigning for the Affordable Care Act, the president pledged: “If you like your doctor, you can keep your doctor. If you like your current health insurance plan you can keep it. Period.” That promise served to calm many Americans who worried they would lose their policies and be shuttled on to the insurance exchanges as part of Obama’s vision to extend coverage to many of the nation’s 48 million uninsured.
Tavennar did say that even though some insurance companies chose to stop offering certain plans on the individual market, the Affordable Care Act did not force them to make that decision. She then asserted that customers can now choose more comprehensive plans on the exchanges. In the same vein, Sebelius maintained that the cancellation of policies was a justifiable side effect of the health care reform because the new policies will give Americans better benefits and more consumer protections.
Here’s how the major U.S. indexes traded on Friday:
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