Dec. 11 (Bloomberg) -- More than 250,000 Americans selected private health-insurance plans through Obamacare enrollment systems last month, twice as many as in October when the exchanges opened amid technology errors and outages.
Kathleen Sebelius, the U.S. health secretary, called for an investigation of what went wrong with the Oct. 1 debut and said she’s taking steps to prevent future failures. While the Obama administration said it’s optimistic about the improved performance of the online exchange, it’s behind in the effort to meet a goal of 7 million people enrolled by March 31.
All told, 364,682 people in two months selected an insurer using the federal and state exchanges created by the Patient Protection and Affordable Care Act, according to a government report today. An additional 803,077 were found eligible for state children’s health plans or Medicaid, the program for the poor being expanded in at least 26 states next year.
“We think we’re on track and we will reach the total that we thought because we’re only two-and-a-half months into a six-month open-enrollment period,” Mike Hash, the director of the office of health reform at the U.S. Department of Health and Human Services, said on a conference call with reporters.
An HHS memo dated Sept. 5, obtained by the House Ways and Means Committee, projected 1.2 million people would be enrolled in private insurance coverage by the end of November -- more than three times the actual number.
“We’re not exclusively focused on reaching a particular number,” Hash said later in the call. “What we’re focused on is reaching the millions of people who are looking for affordable health-care coverage.”
The botched debut of the exchanges prompted President Barack Obama to recruit Jeffrey Zients, scheduled to become his top economic adviser after Jan. 1, to oversee a “tech surge” to fix the flaws. Error messages, outages and other shortcomings with the website contributed to about 1 million people abandoning the application process in October before choosing a plan.
“I don’t think there’s any question that the flawed launch of the website put a damper on people’s enthusiasm about early sign-up,” Sebelius said today at a House Energy and Commerce subcommittee hearing in Washington. “We had a lot of visitors early on who got very frustrated and have not re-engaged.”
Republican members on the committee said they felt lied to about the promises and progress of the health law.
“Words start to lose their meaning when they’re delivered by individuals who have either misled this committee or were woefully ignorant of the disastrous consequences that have unfolded since enactment of the ACA,” said Representative Joseph Pitts, a Pennsylvania Republican who led the hearing.
Sebelius said that in hindsight she might have done things differently.
“I would have probably done a slower launch, maybe with fewer people, and done some additional beta testing, which is part of what has happened, frankly, in the early months of the launch, to identify what problems we had,” she said.
The administration announced Dec. 1 that it had met its goals for repairs and that most customers would find the federal website working well. About 110,000 people signed up in November from 36 states that rely on the federal enrollment system. That’s about four times the number who selected plans in October. Data for December will be released next month.
The improved performance has both major political parties shifting strategies, with Obama preparing a January advertising blitz and wave of celebrity promotions, and Republican opponents in Congress highlighting examples of people who are paying more for insurance or losing access to their doctors.
The hearing today touched on the costs of the website, which has been difficult to track through public records. Sebelius said a subset of her agency spent $319 million building the federally run marketplace through October, out of $677 million that has been obligated to contractors.
There is still no conclusive way to track that spending, including what contractors CGI Group Inc., Verizon Communications Inc., Hewlett-Packard Co. and UnitedHealth Group Inc. have received, Bloomberg News found.
The Centers for Medicare and Medicaid Services, which is part of Sebelius’s agency, had obligated $630 million for the work through September, Julie Bataille, a spokeswoman for CMS, has said. Based on Sebelius’s testimony today, the repairs to the website cost at least $47 million in October alone.
Sebelius said she’s asked for a formal investigation of what went wrong with the exchange’s debut, and has taken steps to avoid future debacles, including the creation of a chief risk officer position within CMS that will review purchases and contracts related to information technology.
“We need a thorough review of the contractor performance and program management structure,” Sebelius said in a blog post today. “I am asking the Inspector General to review the acquisition process, overall program management, and contractor performance and payment issues related to the development and management of the healthcare.gov website.”
In the meantime, more than 1 million visitors were willing to give the Obamacare website another chance on Dec. 2, a day after the government said it had made software repairs that ensure the site is functional for most users.
About 17,900 Floridians signed up through the end of November, the most of any state using the federal exchange, and 14,038 Texans enrolled, according to today’s HHS report.
California, one of the 14 states to create its own health marketplace, led all states in enrollment, with about 107,000 signed up through Nov. 30. About 45,500 New Yorkers selected plans through their state’s program, according to the report.
“Evidence of the technical improvements to healthcare.gov can be seen in the enrollment numbers,” Sebelius said in a statement.
The next challenge is resolving the back-end issues involving data transfers to health insurers. The companies have said information they receive in the “834 transactions” from the federal system has been incomplete or garbled, raising the prospect that thousands of people who thought they had signed up won’t have coverage if the errors aren’t corrected.
About a quarter of 834 forms transmitted in October and November probably contained errors, said Bataille, the CMS spokeswoman. That error rate has been cut to about 10 percent now, she said.
A “reconciliation process” is under way with insurers to match the government’s enrollment records with those of the companies, she said, to make sure people who think they have bought coverage are indeed signed up.
“It’s important that CMS is sending this information to health plans,” Robert Zirkelbach, a spokesman for America’s Health Insurance Plans, the industry’s Washington lobby group, said in a phone interview. “It will give a clear picture of the scale and scope of the technical problems that exist.”
Americans have until Dec. 23 to sign up for coverage that begins Jan. 1. In its report, the government counts people who have selected a plan as enrolled, though they won’t have coverage until they make their first premium payment.
Similarly, people who are designated eligible for Medicaid must complete enrollment with their state government.
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.
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