Obamacare Online Will Be Glitchy. Don't Freak Out.

by Jonathan Cohn | September 20, 2013

October 1 is less than two weeks away. And if you have followed the coverage of Obamacare, then you have heard a lot about that date.

The president talks frequently of how the insurance market will change on October 1—how, for the first time, people buying insurance on their own will be able to get policies regardless of pre-existing conditions; how they’ll be eligible for generous tax credits even if they are middle class; how they’ll be able to compare prices and benefits from several plans, neatly organized into metallic-sounding tiers like gold, sliver, and bronze; and how they’ll be able to do it via online marketplaces, in a process that feels a bit like buying a plane ticket on Expedia.

Will all of these things happen? Almost certainly yes—and, as a result, millions of Americans are going to get access to cheaper, more secure health insurance. But will all of these things happen right on October 1? Not in some states and maybe not even in most states. As a new Wall Street Journal story makes clear—more on that in a moment—in these places it may take some time to work out kinks in the websites and to install all of the cool features their architects have in mind.

Yes, these are the typical information technology glitches pretty much everybody, including Obama himself, warned you to expect. And they mean that the introduction of Obamacare's online experience could be a little slow and fitful in some parts of the country—which isn't a big deal, as long as it's not too slow and fitful. 

Here's the situation: Some states are building their own websites for insurance enrollment. Others are letting the federal government handle the design and construction. Either way, the online marketplaces must perform the same basic functions: Letting people choose and apply for coverage, but only after calculating how much financial assistance (if any) the federal government will provide for them. To accomplish that, both the state- and federally run sites must integrate information supplied by consumers and insurers, and then check with what’s known as the “federal data hub”—a separate system that will communicate with federal agencies like the Internal Revenue Service, the Social Security Administration, and the Department of Homeland Security to verify the information people submit when they apply.

In case you’ve lost count, that’s at least three distinct projects—states building their own sites, the federal government building sites for other states, and creation of a federal data hub. No similar system exists, anywhere in the world. Constructing it has not been easy, particularly in Washington where the law’s critics seize on every perceived misstep for political gain. “When I was at HHS, the thing I was the most concerned about—by far—was the technology necessary for the Exchanges to work,” says Jay Angoff, a former Missouri insurance commissioner who served at HHS from 2011 through 2013. “The politics of the ACA—and in particular the fact that those who are in charge of the money necessary to implement it are dedicated to its destruction—make implementing the necessary technology even more difficult.  But even under the best of circumstances it’s difficult.”

Officials in some of states haven’t faced the same kind of resistance. And that’s one reason a few of them, most notably those in California, say their exchanges will be open business on October 1, with the essential components ready to go. But officials in other states are already planning for what the Washington Post’s Sarah Kliff and Politico’s Jennifer Haberkorn have called a “soft launch.” As Kliff put it, “The space between October and December is viewed, by many standing up the health care law, as a soft launch: the time to make their new Web sites live, sort out the kinks and get the site in prime condition for the beginning of 2014.”

Nevada officials, for example, have said they won’t allow insurance purchases for at least the first week—and will then stagger advertising, by region, so that applications build up slowly. They say it’s a precautionary measure, in order to make sure both they and the federal government have worked the kinks out of their online systems. In Oregon, officials have said they will initially open the state’s site only to brokers and “navigators,” the non-profit groups helping people to enroll. Residents who want to enroll themselves will have to wait a few weeks. “When Google launched Gmail you had to be invited" a Cover Oregon spokesperson told Kliff. "That was their beta launch. That was their way to identify bugs. Our benefit is that our initial users will be community partners who will be trained on the system."

Oregon is a progressive state with officials who have embraced Obamacare enthusiastically. It’s also a reasonably easy state to manage: The population isn’t that large and relatively few people are uninsured. That should tell you something: Other states are likely to take similar steps. “The likelihood of delays on some state websites is 100%,” Jon Kingsdale, who presided over creation of the Massachusetts exchange and now advises states on their projects, told me. “Several of the more ‘advanced’ states have already announced delays, so we can expect several more states to realize … that they will be delayed as well.”

In east-coast Washington—that is, the District of Columbia—development of the federal data hub is proceeding pretty well, by most accounts. A final check of security was delayed until September 30—yes, one day before the whole system is supposed to go online—but so far the hub has worked well in tests with sites that the states have built. Glitches are still possible, as they always are with a new online product. But if it works, that means states like California that have done their jobs will be set to go.

The federal websites—the ones HHS will run for states that can’t or won’t do it on their own—are another story. Reporters from Reuters have now published two reports about problems that arose in testing. Neither one is particularly critical. They are the kind of issues that inevitably come up when building a system this complex. But sources say the little problems have been accumulating—and that there may be some big ones, too. “There’s a lot of anxiety about whether the site will give accurate eligibility determinations on October 1st due to the number of bugs identified during testing,” one person with direct knowledge of website development told the New Republic earlier this week. “It’s tough to say definitively because testing has been so behind. But it appears that some non-essential functionality will have to be delayed regardless of whether the rest of the site is up and running on October 1.”

These people haven’t said exactly what might work and what might not, in part because it’s not yet clear. Contractors and staff are working literally through the night to meet deadlines, which is pretty typical for the rollout of a big information technology product. But on Thursday, Christopher Weaver, Timothy Martin, and Jennifer Corbett Dooren from the Journal reported that, in testing, the federal system was still not making proper price determinations. "There's a blanket acknowledgment that rates are being calculated incorrectly," one insurance executive told the Journal. "Our tech and operations people are very concerned about the problems they're seeing and the potential of them to stick around." 

Particularly with Republicans pushing to defund or delay Obamacare, any glitches are sure to be generate unflattering media coverage, at least some of which may be deserved. What counts most, though, is the actual impact on the law’s ability to function. And a soft launch or beta test—call it whatever you want—needn’t have much effect. The step-by-step opening of exchanges that states like Nevada and Oregon are planning might actually be a preferable way to introduce them. And, as Dan Diamond of Advisory Board points out, government officials can always come up with workarounds as necessary: A third of people were already expected to enroll by paper, plus "an enormous number of stakeholders want the exchanges to be successful, from insurers that are hoping to see new business to hospitals that want to lower their uncompensated care cos. Basically, [the Center for Medicare and Medicaid Services] can raise a virtual volunteer army if necessary."

Keep in mind, too, that the law doesn't dictate that enrollment begin on October 1, 2013. HHS chose that date somewhat arbitrarily. Coverage won’t actually take effect until January 1 and the open enrollment will extend all the way to March 31. That's a full six months. By comparison, the open enrollment period for private Medicare plans lasts less than two months. And nobody expects a massive surge of enrollment at the beginning. On the contrary, most experts expect enrollment will take place pretty slowly, right up until March 1, when people will rush to sign up before the deadline.

As Kingsdale, a director of the Wakely Consulting Group, puts it,

This will be fodder for the anti-Obamanable Care political machinery, but the significance for enrolling folks is actually quite modest. Very few households will want to pay even subsidized premiums in October for benefits that do not begin until January, and small employers who care to use public exchanges sign up throughout 2014.

Angoff made a similar point:

I don’t think it’s so terrible if everything isn’t automated on October 1. The closer we get to January 1, though, obviously, the bigger problem any lack of automation would become.

That last note is important. At some point, later in 2013 and then early in 2014, large numbers of people will come looking for coverage. If they can’t get it, because the necessary websites are down or functioning poorly, they’re more likely to give up. That’s the nightmare scenario. On the other hand, it’s also possible Obamacare's online edition will premiere on time, on October 1, working more or less like it's supposed to work. In fact, that’s still what the Administration is predicting. "Timelines are tight," one senior official told me last week, "but we are still within our timeframe ... we're feeling good for being fully operational on October 1." That may be optimistic, but it might not matter.

Jonathan Cohn is a senior editor at the New Republic. Follow him on twitter @CitizenCohn

Note: This item has been updated, with a link to Dan Diamond's piece and a correction about the open enrollment period. It is six months long, not five, as I first wrote. (That's even better!) 

Source URL: http://www.newrepublic.com//article/114788/obamacare-online-insurance-marketplaces-expect-glitches