So how are those health care exchanges coming along?

Great Debates
1

It’s three weeks since the exchanges went online. For most of that time, Congress kept us entertained and thus prevented too much attention from getting paid to the rollout of the exchanges themselves. Now that entertainment is over, so I thought we might try putting down some facts about how things are actually unfolding, hopefully without too much declaring that one or the other political party is full of stupid, insane, treasonous people.

Ezra Klein is generally pro-Obama and pro-ACA. He has described the start of Obamacare thusly:

Disaster … So far, the Affordable Care Act’s launch has been a failure. Not “troubled.” Not “glitchy.” A failure. … The backroom connection between the insurance companies and the federal government is a disaster. Things are worse behind the curtain than in front of it. … For some reason the system is enrolling, unenrolling, enrolling again, and so forth the same person. This has been going on for a few days for many of the enrollments being sent to the health plans. It has got on to the point that the health plans worry some of these very few enrollments really don’t exist. The reconciliation system, that reconciles enrollment between the feds and the health plans, is not working and hasn’t even been tested yet. … We’re now negative 14 days until the Affordable Care Act and most people still can’t purchase insurance. … What’s abundantly clear to anyone who reported on the run-up to the federal health-care law’s launch is that the White House had no idea how badly the Web site would perform. They expected problems. But the full extent of the disaster was either obscured or ignored. Heads should roll for that. … It’s a real law that real people are desperately, nervously, urgently trying to access. And so far, the Obama administration has failed them.

So that’s how things look according to a Democrat. Not surprisingly, those with a more negative disposition towards the law also aren’t impressed. This article by Yuval Levin seems to be the most widely read and linked to.

It is now increasingly obvious to them that this is simply not how things work, that building a website like this is a matter of exceedingly complex programming and not “design,” and that the problems that plague the federal exchanges (and some state exchanges) are much more severe and fundamental than anything they imagined possible. That doesn’t mean they can’t be fixed, of course, and perhaps even fixed relatively quickly, but it means that at the very least the opening weeks (and quite possibly months) of the Obamacare exchanges will be very different from what either the administration or its critics expected.

How many people have actually bought insurance through the federal exchange? The Obama Administration isn’t releasing numbers. Some loose figures from a few states: nobody in Michigan as far as we know, nobody in Alaska, less than 10 in North Dakota,extremely few in Iowa, extremely few in Nebraska, extremely few in Wisconsin, …

Now all of that deals with the federal exchanges, which are what’s available in most states. Some states have their own exchanges. How are those going? Bloomberg News gives 28,000 signing up in California and 40,000 in New York in the first week. The Washington Post reports a lower number for California but confirms the number for New York. Overall numbers look unimpressive, with only two other states listed as having more than 6,000 applications processed. Others note that the 40,000 figure in New York is the number found eligible to enroll, not the number who have actually purchased coverage.

Overall, given the extraordinary importance of the exchanges, it seems remarkable how little accurate information about the numbers is available. That which is available suggests that things aren’t going very well in most places. But perhaps I’ve been reading biased sources. What does everyone else think?

2

I think conflating the launch of healthcare.gov with the launch of Obamacare is an unfortunate shorthand of Klein’s which you helpfully do not adopt in your OP. Obviously, the exchanges are only a subset of Obamacare, and the web portal is only a subset of the operation of the exchanges.

So while I think it’s fair to characterize healthcare.gov as a disaster, maybe even a disaster that lays entirely at the feet of the federal contracting process, I think it unfair to conflate that with what is the obvious success of other important aspects of Obamacare: namely, that premiums in the exchanges are lower than expected, that the rate of increase in costs of premiums is getting lower, and the general lack of the kind of cataclysm predicted by opponents (so far).

I don’t see that the web portal matters terribly except as a PR matter. Can’t people just sign up by calling an 800 number? The White House says there’s been 500,000 sign-ups. Not sure if there’s independent verification.

3

Looks like 500,000 completed applications, which are not the same as enrollments.

25,000 people in Washington State have been fully enrolled. 9,453 in Kentucky enrolled. (Cite.)

4

The only claim (that I’ve seen parotted many times) I’ve seen on that was a study from the ASPE (a part of Health and Human Services) that worked backward from the CBO’s final estimate of cost ($5,200 single/$14,100 family per year) in 2016 and then used 5.5% as the reduction of costs each year from 2016, which is below the average increase of costs for the last decade (roughly 7% per year) and declared that the prices were cheaper than their calculation.

If this claim had been evaluated by taking our current costs and using the average yearly increase to project what the costs will be in 2016, the costs are neck and neck with the CBO estimates.

5

Which claim are you referring to, that the rate of increase has slowed or that the premiums have come in lower than expectations?

6

Not a big fan of Obamacare checking in…

Sheesh, give it more than 3 weeks, will ya? And, as noted, this is just one aspect of Obamacare. A very important aspect, and a very ambitious aspect, but let’s give it at least 3-6 months before declaring victory or defeat.

7

So what you’re saying is that a major web application which has been massively promoted in the media and is getting hundreds of millions of hits is having trouble with its grand opening.

Clearly, this is something that has never happened in the history of the Internet before and the Obama administration should be ashamed of itself.

8

I heard this recently but cannot recall who deserves the attribute:

When Apple launches a new iPhone and there are massive lines at all the stores and stock runs out in an hour and tens of thousands of customers are left disappointed having waited in line for hours, media calls it a huge success for Apple.

When healthcare dot gov site has problems on launch with millions of people wanting to register or simply inquire, the ACA is considered a failure for Obama.

:rolleyes:

9

Call Al Gore. He invented the damn thing! :smiley:

10

Assuming you’re referring only to the claim about coming in below estimates, I think you’re right that the ASPE report is the main evidence.

The 5.5% is CBO’s March 2013 estimate of the rate of health care price inflation for 2014-2016. So I don’t see anything wrong with using that number. But even if they’re wrong, the point is that opponents and Fox News were predicting wildly inflated premiums as a consequence of the various requirements (can’t exclude pre-existing conditions, etc.). So even meeting the estimates is something of a victory, especially when the estimates are thousands of dollars lower than the price of insurance in the individual market pre-Obamacare.

Which is not to say it won’t go downhill or bad effects might not kick in. But that’s one the big dogs not to have barked yet.

11

Well, yes. Would you expect anything different? Apple is a profit-seeking corporation, while the federal government is the government.

If I want to hire a professional gardner, I call him, and he’s unable to start gardening for me in the next week. that’s a business decision that he’s allowed to make. But if my house is on fire and I call 911, but they can’t send me a fire truck in the next hour, that’s a major failure. Government does not function by the same standards as business.

12

Nobody’s house is burning down because the opening of this website, 3 months before insurance coverage actually begins, is glitchy. They actually have many weeks to get the kinks ironed out before it can even charitably be considered a failure to provide the services it’s supposed to.

Just like any glitch ridden rollout, in 6 months, when it works the way it supposed to, the problems will be a footnote to a footnote.

13

Bad analogy and doesn’t apply because the rush on healthcare.gov speaks of demand, not how well or poorly the (website) service is executed. We can agree that it was very poorly executed. But many are making the judgement that, “See? I told you ObamaCare was a bad idea!”… which is a different conversation entirely.

14

And if the fire truck doesn’t get there in the next hour, you fix the problem with 911. You don’t throw your hands in the air, proclaim the 911 system to be a failure, and pull the plug.

15

Yes, but that 5.5% is an assumption based on yet more conjecture of how the ACA cost structure plays out. Not having all the regulations on the table when the CBO made these estimates doesn’t help us along, either.

As for The opponents statements, both they and the proponents have been loose with their wind and tight with their facts, sadly. I’m currently making nothing of this years’ rates (outside of the opinion that they are way more expensive than the 7 million healthy people they want to sign up will likely be ready to pay) as they are tossing a rock and seeing where it lands. Next years rates will be he real tell.

16

Yes, well, let’s fix the analogy. If your house is probably going to burn down on January 1, 2014, and the fire department says you can call them any time after October 1 and before January 1 to get it put out, and you call on October 14 and the lines are busy, maybe there’s a chance your house still won’t burn down, especially if–as seems inevitable–the fire department will delay the burning of your house on January 1 if it can’t fix the phone lines, and if by “burning your house” I mean “pay a modest tax penalty.”

17

Huh. Now that I read over that, it’s a terrible dang analogy. Let’s scrap it altogether and move on.

18

I started the thread to discuss how well the exchanges are working. As we seem to have universal agreement that they’re barely working at all, I guess there’s not much more to say there, so we could expand the discussion to the larger issue of what will happen in the future.

The key issue, which even supporters of the law acknowledge, is the possibility of a “death spiral”, as explained here:

“The danger if you don’t get young, healthy people signing up … is that this program will collapse,” says Robert Laszewski, president of Health Policy and Strategy Associates.

“We actually have a term for this in the industry,” says Laszewski, who advises health insurance companies. “We call it a death spiral. And many insurance companies have had death spirals so this is not a theoretical exercise.”

Here’s how a death spiral happens: Most of the people who sign up for an insurance plan are sick. It costs a lot to take care of them. So the next year, to cover the high health costs, the insurance company raises its premiums. But then only really sick people sign up. So the insurance company has to raise prices again. Eventually, the insurance gets so expensive that no one buys it, and the whole system falls apart.

So for the system to function, we badly need a lot of people to buy individual insurance plans. Right now, it seems most people can’t. Perhaps in three weeks they’ll be able to. Perhaps it will take three months. Perhaps longer. No one knows how long it will take, and no one knows how long we have before a death spiral begins. I sure don’t know. Perhaps everything will be running smoothly soon and we’ll forget the initial failures on the website. But the possibility for total disaster is certainly there.

19

Again, the healthcare.gov site is not the only place for young people to enroll. Coverage starts January 1 and open enrollment will last until March 31. The federal website has been bad, but there is a lot of time for that to get fixed.

20

What does appear to have happened is that the big players in the health insurance market - who have the best provider networks - have largely chosen to sit out the exchanges, at least for the initial year. I’ve not followed the prices issue, but it appears that there are fewer choices of carrier, and within the carriers, smaller networks of providers than are typical for major-carrier plans.

So it might be that the prices are lower than expected for products that are also worse than expected.

[FWIW, I don’t think the average of increases over the past decade is a valid estimator of the next couple of years, as medical inflation has come down a lot over the past few years. Some of that is due to the recession, but it’s hard to predict the extent to which things might pick up in the next couple of years.]