Insurers rankled by health exchange launch

November 1, 2013

System flaws, software problems deter beneficiary enrollment, undermine new coverage.

 

HealthCare.gov-serving 36 states-is supposed to provide 7 million individuals with coverage, but meeting that goal will be very difficult based on paltry early enrollment and faulty back-end technology. Such a failure will supply ammunition for health reform critics, many still smarting from their inability to kill the law by shutting down the federal government.

Initial problems were blamed on higher-than-expected opening-day traffic-14.6 million unique visits in the first 10 days of October, according to Health and Human Services (HHS) officials. The explanation crumbled when traffic dropped precipitously, as thousands of potential customers faced “try again later” messages.

System capacity was expanded, but half the 700,000 applications officials reported four weeks later were attributed to state sites.

Initially, the federal website required individuals to set up a personal account before they could shop for coverage information. HHS had decided that consumers should know if they qualified for subsidies to avoid “sticker shock” from high premiums when investigating coverage options. When registration turned out to be so difficult, HHS added a process that permits consumers to review plans and prices in the local community without being registered.

Still, the federal exchange doesn’t provide details on which doctors and medicines are covered by individual plans, information important for patients with serious conditions.

Enrollment issues prompted community organizations to switch to paper applications. Advocacy groups delayed campaigns to promote enrollment. Plans directed individuals to their own websites. Issues with programs for calculating subsidies prompted insurers to advise brokers to hold off signing up customers who might qualify for tax credits.

Faulty enrollment data

Even more troubling are reports that insurers could not obtain accurate information on individuals who managed to enroll. Batches of data sent to insurers from the federal exchange contained corrupted files that would not open and files missing key information.

Plans reported multiple enrollments for the same customer and problems matching lists of enrollees from the federal system to their own information. Some errors could be fixed by hand, but that could work only with dozens of applications-not thousands.

With all the glitches, insurers fear that individuals might find out they lack coverage only when they visit the doctor in January.

Analysts blame the program breakdown on the relatively short time frame available for system development and functionality testing. The House Energy & Commerce Committee launched an investigation of the technical problems, seeking details from IT contractors on the causes underlying these problems. The Sunlight Foundation also identified Serco, Maximus Federal Services and General Dynamic’s Vangent as leading contractors involved in building and supporting the marketplace and criticized HHS for contracting with firms good at navigating the federal procurement process, but not in providing cost-effective IT services.

Consumers have until mid-December to sign up for coverage to begin Jan. 1, 2014 and will face penalties if they don’t apply for a plan by March 31. To meet these deadlines, HHS has promised that the system will be “running smoothly” by the end of November. Insurers certainly hope so.