Tuesday, November 19, 2013

Obamacare Rollout Week Seven: Better and Nowhere Near Good Enough

I can provide you with an Obamacare federal exchange rollout update from two decidedly different perspectives:
  1. The website is working much better with enrollment increasing at least three-fold over just a few weeks ago with backroom error rates considerably improved; or
  2. The enrollment, to give you a general sense of what's happening, for a health plan that might have to sign-up 100,000 people in order to get their share of the 7 million Obama administration's national enrollment objective, has grown from perhaps 10-15 enrollments a day a few weeks ago to 40-50 a day now. If this new higher trend continues, such a plan would sign up only another 12,000 people toward the 100,000 objective by March 31. Backroom error rates being committed by Healthcare.gov, when enrollment data are transmitted to the health plans, are still far too high to transition to high volume processing without serious customer service issues.
So, pick your perspective.
Most importantly, Healthcare.gov is not ready for what could come in just two weeks when, between December 1 and December 15, everyone expects massive pressure on the federal Obamacare enrollment and administration site so people can get coverage by January 1.

My independent survey of health plans also matches comments by CMS Deputy Chief Information Officer Henry Chao today at a House hearing that 30% to 40% of the IT systems needed to support Obamacare still must be built. He also said that, "We [CMS] still need to build the payments systems to make the [subsidy] payments [to the health plans]." I have been hearing reports from plans that CMS has said that the enrollee subsidy information was going to be mailed to the plans but I frankly didn't believe it.

Chao went on to say that other backroom functions, including accounting systems, were not complete. That would be like a bank starting business and attracting customers without finishing their ability to send their customers' monthly statements.

Chao's comments just underscore the risk for considerable backroom and therefore customer service issues when volume picks up.

We can all debate whether 2 million, or 7 million, or 12 million people would like to sign-up for Obamacare before the end of open enrollment on March 31. But, I think everyone can agree that hundreds of thousands, if not millions, of people urgently want to get signed up by January 1. Heck, at least 5 million people have already received cancellation notices with many still needing to purchase new coverage, or perhaps take an early renewal offer, by December 15 so as not to have a break in coverage.

That so many people have to re-up their coverage, having received a cancellation letter, is clearly driving much of the latest enrollment. Health plans are reporting as many as half of the latest enrollments, both through the exchange and direct to them, are current customers looking to purchase Obamacare compliant plans––and therefore not a net gain toward the 7 million objective.

Enrollment in the states that run their own exchanges also seems to be surging in November. Covered California, a state-run exchange, reported this week that its enrollment shot up in November. The Los Angeles Times reports that sign-ups nearly doubled in that exchange in early November from October's 31,000. One would expect such a surge since 1 million people in California's current individual health insurance market have received cancellation notices and must change their coverage in the short-term to avoid becoming uninsured.

Ironically, much of the latest interest in signing up for Obamacare is coming from people who have had their coverage cancelled because of the new law's requirements.

One might argue that the appropriate enrollment goal for this first open-enrollment period might better be the 7 million the Obama administration has set for people now uninsured plus the 5 million that have so far been cancelled.
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