Obamacare Deadline May Not Offer Expected Answers: Q&A

Photographer: Andrew Harrer/Bloomberg

Calling repairs to the Healthcare.gov website an evolving effort that won’t end when the month does, administration officials said they’ll update the public next week. Close

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Photographer: Andrew Harrer/Bloomberg

Calling repairs to the Healthcare.gov website an evolving effort that won’t end when the month does, administration officials said they’ll update the public next week.

Will the federal health exchange website be working smoothly for the “vast majority” of users on Nov. 30, as promised by the Obama administration?

Calling repairs to the site an evolving effort that won’t end when the month does, administration officials said they’ll update the public next week. The promise of 50,000 people being able to simultaneously use the site -- twice the capacity of last week -- will be tested by congressional Republicans, who have made sport of highlighting Obamacare’s technical hiccups.

Americans who need insurance may only be able to tell if the site works better by trying it out themselves.

“There will not be a magic moment at the end of the month when our work will be complete,” Jeffrey Zients, the incoming White House economic adviser Obama asked to help salvage the site, told reporters on a Nov. 22 call. “The site will be better at the end of the month than it is today and it will continue to improve.”

The website’s performance isn’t the only issue. Here are answers to questions many Americans may have about the status of the health exchange as the administration’s deadline for getting it to work smoothly approaches:

Q. Will the government delay Obamacare?

A. No. The U.S. health secretary, Kathleen Sebelius, and others in the Obama administration have repeatedly said a delay would create too many logistical problems for the government and insurers, as well as for states where the exchanges are working, including California and Connecticut. People who obtain insurance by March 31 will still be in compliance with the mandate that all Americans carry health coverage in 2014.

Moving Deadlines

Q. What else can go wrong?

A. Plenty. The administration last week extended a deadline to sign up for coverage that would be effective Jan. 1 by eight days, giving people until Dec. 23. Sounds great, but insurers said that doesn’t give them much time at all to double-check the information they get from the government and set up their new customers to actually start getting care.

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That problem is compounded because 30 percent to 40 percent of healthcare.gov hadn’t even been built as of mid-November, according to Henry Chao, the deputy chief information officer at the Centers for Medicare & Medicaid Services. The under-construction parts include systems to transfer data to insurers and make payments to them, and the administration is trying to finish that work by Jan. 15.

Window Shopping

Q. Are the insurance exchange websites at all useable?

A. Federal officials said last week that the performance has improved since the site’s Oct. 1 debut was upended by software issues and hardware failures. The administration has invited back 275,000 people who tried to open accounts in October and either gave up or were stymied by technical flaws. Meanwhile, sites in the 14 states with their own exchanges are working better, the exception being Oregon, where officials have resorted to paper applications.

Over the short term, consumers might be better off window-shopping prices and plans at independent websites such as thehealthsherpa.com, valuepenguin.com or healthpocket.com, which use U.S. data to produce their comparisons. Others can call the 24-hour federal call center to see if they’re eligible for a discounted monthly premium.

Potential ‘Chaos’

Q. Can Obamacare handle a large influx of customers?

A. People who do get coverage will pose their own challenges. Obamacare, if it works, will grant access to the health-care system for millions of Americans who have little experience with it, said J. Mario Molina, chief executive officer at Long Beach, California-based insurer Molina Healthcare Inc., which focuses on low-income patients. Molina, who supports the effort to expand insurance, said Obamacare is here to stay. Still, he predicts “chaos as people start coming on and using their benefits” and more bad headlines for the White House.

Q. Will some people be without insurance on Jan. 1?

A. The government never expected that every American would have insurance on Jan. 1. That’s why the initial six-month enrollment period runs through March. Even before the implementation problems, the Congressional Budget Office projected that 7 million people would enroll in exchange plans in 2014 and 44 million would remain uninsured. And for some healthy people, the government fine for not having insurance may be cheaper than buying coverage.

Low Enrollment

Q. Don’t the exchanges need more enrollment than the 106,000 people who signed up for coverage in October?

A. They do. And the official line is there’s no panic, yet. There are signs enrollment is accelerating. California said that by Nov. 19 it was taking 10,000 applications a day and signing up 2,700 people, four times faster than in October.

Federal officials said they’re expanding capacity of the federal exchange to handle 50,000 users per hour by Nov. 30, or 800,000 per day, and they’ve built a service for spikes in demand, so customers can get an e-mail alert when traffic ebbs.

Q. What about the need to enroll the “young invincibles?”

A. State officials in California, Vermont and Kentucky have said that the young and healthy people are represented in enrollment at about the same percentage as in the broader population. In California, about 22.5 of people who enrolled in October were under 35, according to the exchange.

Still, Mark Bertolini, Aetna Inc.’s chief executive officer, said the Obama administration may have hurt its chances with young people by botching the healthcare.gov rollout. “The younger, healthier people aren’t likely going to give it more than one shot,” he told analysts on a conference call last month.

The law’s supporters said most young adults will make their decisions closer to the March 31 deadline and aren’t following the daily political jousting.

Website Alternatives

Q. What if the website isn’t fixed?

A. Setting aside the political ramifications, there aren’t many good alternatives to get people signed up.

The only clear fallback is to encourage insurers to directly enroll customers through their own websites. The administration began that experiment last week with insurers it won’t name in Texas, Florida and Ohio. The downside is that, unlike the transparency of the government-run exchanges, insurers don’t have to show customers options from competitors that may be cheaper.

Losing Coverage

Q. Are a lot of people losing their current plans?

A. Probably, though there’s no official nationwide count.

About 15 million people buy insurance on their own, instead of getting it through their job or through a government program, according to Families USA, a consumer advocacy group based in Washington. That’s the population that may face cancellation.

In California, more than 1 million people face cancellation, according to the state’s insurance commissioner, so nationwide the number is likely in the millions. A more important question may be whether people whose plans are canceled can get a better deal under Obamacare.

About 4.4 million people who now buy insurance on the individual market also make too much money to qualify for a discount on the exchanges, Families USA said in a report last week. They’re the folks most likely to be hurt if their current plans are canceled.

Placing Blame

Q. Who’s at fault for all this?

A. The president has apologized, as has Sebelius and Marilyn Tavenner, the administrator of the Centers for Medicare & Medicaid Services. Sebelius told Congress that she should be held accountable for what she has agreed is a “debacle.”

Outside advisers to Obama recommended early on that he appoint a czar to lead the federal exchange project. Instead, responsibility for the website was so diffused across the administration it’s difficult to blame any one person. Chao managed construction of the site on a day-to-day basis and he has been questioned by two different House committees.

The site was built by Montreal-based CGI Group Inc., and Tavenner has said the company’s work didn’t meet expectations.

Q. What did it all cost?

A. Julie Bataille, a CMS spokeswoman, has said the total cost of the computer systems that make up the federal exchange was about $630 million. Sebelius has said contractors including CGI won’t be paid for work that isn’t complete, although the structure of the company’s contract suggests it might be difficult to withhold payments or penalize the firm.

To contact the reporters on this story: Alex Wayne in Washington at awayne3@bloomberg.net; Alex Nussbaum in New York at anussbaum1@bloomberg.net

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

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