It is increasingly clear that healthcare.gov is not working, and is not getting appreciably better. If it doesn’t get fixed – and I mean REALLY fixed – by the drop-dead date of December 1, the implementation will have to be delayed until it is.
And that may not happen until late next year.
There are two problems – the front end enrollment process, and the back end information distribution process. On the front end, a handful of people are successfully enrolling in health insurance on healthcare.gov but a handful is nowhere near enough to get the program up and running successfully. However, that’s just as well, and may actually be intentional.
If tens of thousands of people were successfully enrolling every day, the back end – where all the things happen that make health insurance actually work – would not be able to handle the volume. That is a very polite way of saying it would be an unmitigated disaster.
Once you’re signed up, (among other things) your bank account has to be debited, subsidy calculated and applied (if there is one) and enrollment and eligibility information catalogued and prepared for distribution. This process relies heavily on an EDI process using an industry standard known as the “834”.
The problem is that each insurer has their own slightly-different version of the 834, so each health plan’s 834 has to be programmed, tested, and then tested each month to ensure the right data in the right format is getting to the right computer databases. The best discussion of the issue was on Bob Laszewski’s interview with Daryl Chapman last week. Here’s an excerpt:
There are lots of data elements and a lot of field variables. Because of this complexity, no one takes a file straight into a production system––too risky. There are variations on the process but every company has some type of validation process. Generally, the 834 goes through an acceptance process, which scans the file and checks for errors. If it passes the data check it uploads to some kind of “model office” where it is tested again and then, if it passes, it goes to production. Although most of that is automatic there are several chances for the file to “error out.” Once in production, the file drives the payment system, claim system, and is the source for the list of doctors and hospitals they need to confirm the person is eligible for benefits.
Files still have lots of opportunity to trigger false reports in each of these systems if they aren’t accurate.
For example, member data is not the same as payment or cash data (member payments in this case come from two sources; the subscriber and the government). Poor quality data can lead to lots of problems trying to reconcile who the health plan was paid for and who they have on their eligibility system. Very few systems ever connect cash to belly-buttons and even fewer have debit and credit carry forward accounting capability making reconciliation on the fly very difficult.
If the member data is a mess then the cash becomes a mess. When the subsidy cash goes to the carrier from the federal government, the carrier doesn’t just get you; they get thousands of member cash files. If there isn’t a match, the claim paying process has to be suspended until people with green eyeshades figure it out.
And out in the world where doctors and hospitals live if the data isn’t clean doctors and hospitals may not treat you if the carrier file doesn’t say you are covered. They may demand payment upfront from the patient until things are straightened out or balance bill if claims aren’t reimbursed. That is a particular problem here because so many of these people will presumably be low-income.
This is where the biggest problem lies, and the hinge on which the success or failure of Obamacare rests. I do not understand why the Administration doesn’t bite the proverbial bullet and shut down the Exchanges until they are absolutely ready to go. Sure, there’d be a lot of political fallout, but that would last for a few news cycles, and then they’d be off to some new celebrity scandal.
Instead, the President and his proxies are telling people to get on to the site and sign up. A site that isn’t working, and is much harder to fix because the White House appears to want to avoid some political damage. That is unconscionable.
What we need now is Lyndon Johnson. He’d get the right people in the room, beat them mercilessly, make the tough decision and move on. Instead we have millions of people who desperately want and need health insurance spending hours trying fruitlessly to enroll on a site that is fundamentally broken.
What does this mean for you?
An aphorism is appropriate – If you don’t have time to do it right in the first place, what makes you think you’ll have time to fix it?
I agree, but I guess I’m wondering why the administration didn’t just to the simple thing and require the insurance companies, who stand to benefit the most financially from the ACA, to do what capitalism requires and go out and market their new plans? I know many people say that it would make getting the subsidies more difficult, but that could have been a back end process instead of a front end process, no? Further, that would have eliminated the noise about cancelled policies, price shock and the need for any but the most minimalistic of government intervention. The carriers have the technology, will get millions of new customers and could easily spend the cash to market to the new customers.
I’d love to hear why such an approach wouldn’t have worked better.
Valerie,
What you are suggesting sounds to me to be very similar to the plan that Bush put forth in 2007. That was a market driven solution that would have equalized the tax treatment of individually purchased policies with that of employer based policies by allowing tax exemptions on those policies. It would have capped the exemptions for all and it would have used the tax increases derived from those caps to subsidize coverage for the poor. There was more to it than this but this was the basic premise that would have left the marketing, enrollment, technology, etc in the hands of the experts.
It was declared dead on arrival by Democrats in Congress. One reason, Labor unions didn’t like it because the cap on the exemption its basically the same as Cadillac tax in Obamacare.
To be fair, Bush was in the waning days of his Presidency so there was really no reason for the Dems to cooperate with him on anything and his last big move in healthcare, Medicare D had a rocky (at best) launch a couple of years earlier.