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Lead Obamacare Architect Urges Sebelius to Speed Repairs

The lead architect of Obamacare in the Senate urged U.S. Health Secretary Kathleen Sebelius to “meet, and I’d prefer you beat” an end-of-the-month deadline for repairing the insurance exchanges as the agency overseeing the fixes shook up management.

Senate Finance Committee Chairman Max Baucus, a Montana Democrat, said implementation of the 2010 law he helped write has been unacceptable. It’s disappointing that Sebelius and others in the Obama administration “say they didn’t see the problems coming,” Baucus said today at a hearing.

The Obama administration has lowered expectations for initial enrollment because of website outages, garbled data and other flaws plaguing the government-run health-insurance marketplaces created last month. Some senators said they were misled about the readiness of the healthcare.gov site and urged Sebelius to delay the deadline for Americans to buy insurance.

“You assured us that the implementation was on track, that it was all going smoothly, and that the exchanges would be ready” on Oct. 1, said Senator Orrin Hatch, a Utah Republican. “There is a long track record of broken promises and untruthful answers to both this committee and the American people.”

Sebelius, who runs the U.S. Department of Health and Human Services, said workers have installed monitoring tools and are making “a couple of hundred functional fixes” to get the site, which is costing taxpayers about $630 million, fully operational by the end of November.

Extended Deadline

The online exchanges, where people can shop for private health insurance with the help of government subsidies, is the core of the 2010 Patient Protection and Affordable Care Act. Getting the federal exchange fixed soon is critical because Americans have until Dec. 15 to enroll in coverage that would start Jan. 1. Those who don’t find health insurance by March 31 may have to pay a fine of as much as 1 percent of their income.

“For millions of Americans delay is not an option,” Sebelius said. “People’s lives depend on this. Too many hardworking people have been waiting for too long for the ability to obtain affordable health insurance.”

Separately, 16 Senate Democrats met with President Barack Obama at the White House today to discuss “challenges with implementation” of the health law, the administration said in a statement. Senator Mark Udall, a Colorado Democrat, told the president to extend the open-enrollment period past the March 31 deadline.

Seeking Changes

The law, pushed by the Democratic president, was passed in 2010 with only Democratic votes when the party controlled both houses of Congress. As Obama traveled to Dallas today to thank volunteers working to enroll uninsured Texans, two of the Democrats who attended the White House meeting sought support for measures to delay the fines for people who don’t get insurance, and to let people keep their existing health plans even if they don’t meet the law’s more rigorous requirements for medical coverage.

The proposals by Senator Mary Landrieu of Louisiana on existing policies and Senator Joe Manchin of West Virginia to delay fines for a year underscore Democrats’ anxiety over the failures of the online exchanges.

Humana Inc. (HUM) is anticipating some concession by the Obama administration, including a possible extension of the six-month open enrollment period beyond March, said James Murray, chief operating officer for the Louisville, Kentucky-based company.

Awaiting Guidance

“There’s a problem with the enrollment, and because of that, the likely enrollment that we’ll receive will be changed from what we thought,” Murray told investors today on an earnings conference call. “We’re waiting for guidance from the government.”

The administration had a target of 800,000 Obamacare sign-ups for the first two month and the Congressional Budget Office has projected that 7 million people would enroll through 2014.

Sebelius said today the initial enrollment from October will be “very low,’” though she declined to provide specific figures, saying a full report will be released next week.

“Until the site is improved and we really open up the doors wide to more people, we’re going to have a struggle to get significant numbers of people signed up,” she said.

“It’s unacceptable, I am focused on fixing it, and I am accountable,” Sebelius said.

Senator Pat Roberts, the Kansas Republican who last month called for Sebelius to resign, today said he wasn’t satisfied.

‘Any Regrets?’

“I have to wonder if you have any regrets, any regrets at all that you failed to heed the warnings” that the exchanges wouldn’t be ready, Roberts said. “I repeat my request for you to resign.”

Sebelius, who wasn’t given an opportunity to respond to Roberts, appeared before a House committee last week where she apologized for the site’s flaws, saying “hold me accountable for the debacle.”

While Sebelius today steered clear of discussing her future or that of her deputies, the agency that oversaw the building of the exchanges disclosed the departure of a top administrator. Tony Trenkle is leaving his job as the chief information officer of the U.S. Centers for Medicare & Medicaid Services after Nov. 15, according to a letter to employees.

Still Time

“Tony made a decision that he was going to move to the private sector,” Julie Bataille, a spokeswoman for the agency told reporters on a conference call. Congressional committees with authority over CMS weren’t alerted about the move before it was announced, two Republican aides said.

Trenkle, who had been with the agency since 2005, oversaw $2 billion in annual technology spending, including the money used to help build the Obamacare exchange website. David Nelson, the director of the agency’s office of enterprise management, will take Trenkle’s position temporarily.

“This wasn’t how we envisioned the first introduction to the brand,” Timothy Ryan, general manager of Weber Shandwick’s advertising company Sawyer Miller, who helped craft ads for the federal exchange. “If after Thanksgiving there’s the functional website that we’re all being promised, this will be in the rear-view mirror very quickly. If there’s still problems festering, we’re going to have a bigger issue on our hands.”

Market research suggests the uninsured won’t decide whether to enroll until closer to the coverage deadline, leaving time to repair the exchange’s reputation, he said.

U.S. officials have blamed some of the site’s troubles on unanticipated customer demand that overwhelmed the computer systems. Other issues can be traced back to the race to construct an online insurance exchange by Oct. 1 that spurred the Obama administration to use an expedited bidding system limiting its choice of a builder to just four companies.

Th administration has identified a number of software flaws that led to the problems, criticized CGI Group Inc. (CJ5A)’s handling of the work, and named UnitedHealth Group Inc. (UNH)’s Quality Software Services unit to now be the lead contractor, overseeing CGI’s work. The government also has pulled in engineers from Google Inc., Red Hat Inc. (RHT) and Oracle Corp. (ORCL) to help get the website working.

To contact the reporter on this story: Alex Wayne in Washington at awayne3@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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