Saturday, October 26, 2013

The Commitment to Fix Obamacare's Computer Systems By December 1––Because It Can Be Done By Then or Because It Has To Be Done By Then?

The good news is that it appears the adults are finally in charge of healthcare.gov.

This week, the administration put a seasoned and trusted manager in charge of getting the Obamacare computer system working––Jeff Zients.

He quickly announced a methodical approach to the problem and that he had appointed one contractor to coordinate the daily work. Zients also appeared to be pretty open and honest about what's really going on.

All things that should have happened in the first place.
As the administration's point person, or perhaps better put the Obamacare czar, Zients, also said the current Obamacare computer system is fixable.

More importantly, he said it could be fixed by the end of November.

In order for people to sign-up for health insurance by January 1, the first day they can be covered, they have to complete the enrollment process by December 15 in order that they can be accurately added to the rolls and make their premium payments.

So, is the Obamacare computer system fixable by December 1 or is it that there really is no alternative but to fix it by December 1?

Without getting this fixed, the likely millions of people who have been patiently waiting for health insurance won't have it on January 1. And, the ability to get the many more healthy people we need to avoid an insurance anti-selection death spiral will be severely undermined.

Also, millions of people covered in the individual health insurance market today are getting cancellation notices because their policies will not comply with the new health law effective on January 1. Some health insurance companies are granting "early renewals" so that these people can keep their coverage until December 2014 and avoid a lapse in coverage. These people can also contact their companies directly to get their 2014 coverage set up.

But if any of these current policyholders want to take advantage of the new subsidies beginning in January, or to use the health insurance exchanges to understand what their options are, they can't effectively do that with the 36-state federal health insurance exchanges in such a mess.

Some Senators, Democrats as well as Republicans, are talking about passing legislation to defer the individual mandate for as much as a year because of the computer problems. That makes some sense given the problems consumers are having. But will that legislation also appropriate money for the insurance companies that would be required to cover the sick while the healthy sit it out for a year?

Postponing major parts of this law could create a whole new host of problems.

Here is the irony of all ironies: The health insurance industry is ready for Obamacare even if Obamacare isn't!

For many months, health insurance companies have been creating, pricing, and filing with state insurance departments, the new Obamacare products. The health insurance companies' computer systems have not only been programmed to handle the new Obamacare products, they have been programmed to get rid of the plans that won't be any longer legal at both the state and federal level––lots of cancellation letters and directions for how to continue without a break in coverage have already gone out to policyholders.

Hey, the administration and their contractors have been confidently telling everyone they would be ready for the last year. The health plans had no choice but to be ready themselves.

The health insurance companies started the compliance work months ago. Any big changes required at the last minute would likely take months to get into their information systems and filed with state regulators.

For insurance companies, the Obamacare compliance train left the station months ago and is running on time! The Congress, as well as an administration that has already unilaterally deferred the employer mandate, needs to know you can't just hit the rewind button here.

I would also suggest Jeff Zients put two really big things at the top of his likely already overwhelming priority list:
  1. Get the backroom enrollment mess (the 834 transactions) cleaned up first. If we end up having a two-week opening starting about December 1 for people to sign-up, we are likely going to have many hundreds of thousands or even millions of people flooding through the door during a very short period of time. Given the government's error rates the backroom is suffering with now it would be the greatest customer service train wreck in history if things weren't operating smoothly (See my recent post on 834s).  
  2. Focus on the private exchanges and health insurance companies with their own websites that still cannot connect to healthcare.gov for things like subsidy calculations. The companies have been begging for this capability from the beginning. If it had been done, they could now be serving as an effective work-around giving consumers an efficient means to get signed-up. This should have been Plan B in the first place in case the Obamacare site did not work.
Jeff Zients has been handed an incredible mess that took three years to make and he's got five weeks to fix.

But he sure looks like the guy for the job.
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