When the nonpartisan Government Accountability Office issued a report in the middle of June warning that the Affordable Care Act’s new health insurance exchanges may not be ready in time for the the October 1 deadline, warning bells went off. After all, the success or failure of these superstore-like insurance marketplaces could determine whether Obamacare itself succeeds. Since then, the Obama administration has announced two delays; last Tuesday, the employer mandate was delayed, and last Friday, the requirement that the new insurance marketplaces verify consumers’ health insurance status and their incomes, two pieces essential for the function of the exchange system, was postponed.
Taken together, these announcements seem to indicate that the Obama administration has only just realized that it will not be able to implement the health care reform as designed. But, in fact, it has known for months.
As early as March, federal officials began developing contingency plans in the event that the exchanges were not fully ready to begin enrolling insurance applicants on the scheduled October 1 deadline. At that time, Henry Chao, a top IT official at the Department of Health and Human Services, said that “debating about the size of text on the screen or the color or is it a world-class user experience, that’s what we used to talk about two years ago.” At a conference of insurance executives he explained that the department’s new philosophy towards the new online marketplaces was just that they not be “a third-world experience.” As this statement suggests, the administration is not working on implementing the full Obamacare vision, but rather on ensure the essential elements will be up and running by October 1.
That same month the department announced that the small-business portals would be able to allow individual employees to choose their own plans in the first year of operation, as the law requires.
In April, during a testimony before a Congressional panel, Gary Cohen, director of the Center for Consumer Information and Insurance Oversight, kept his comments positive. But, at the same March conference of insurance executives, he acknowledged that there could be some glitches.
The problems have arisen because of the complexity in the system. As envisioned, the exchange websites must be able to draw on information from several federal agencies, including the Internal Revenue Service to verify an applicant’s income and employment status, the Department of Homeland Security to confirm citizenship, and state governments to determine Medicaid eligibility. All this communication must be conducted in real time, so that the applicant can fill out a form and purchase insurance at the same sitting.
However, each department has its own computer systems and its own method of tracking information. Setting up a “data hub” to share those systems has been the challenge, as the report from the GAO detailed. “Much progress has been made, but much remains to be accomplished by [the Department of Health and Human Services’ Centers for Medicare & Medicaid] and states within a relatively short amount of time,” noted the report. The GAO found that states had not completed many of the tasks necessary for implementation, while U.S. officials have only conducted initial tests of the the computerized system that will connect the exchanges with states and federal government.
Still, even though “legislative and operational barriers” have overwhelmed implementation, by eliminating non-essential tasks, which may be a violation of the letter of the health reform law, officials may be able to get the core functions set up right.
Follow Meghan on Twitter @MFoley_WSCS