What's Going On With the Obamacare Exchanges?
As we’ve covered, one of the biggest elements of Obamacare, the health insurance exchanges (also called marketplaces), launched on October 1st. Since then, reports have emerged of higher than expected interest but also serious technical problems, particularly with the federal healthcare.gov website. President Obama is scheduled to publicly address these challenges today, and the Administration is embracing a “tech ‘surge'” to fix them. What does it all mean?
First of all, has anyone been able to use these exchange websites? Yes. Nearly half a million Americans have started an application for health insurance on a federal or state exchange. This shouldn’t be confused with the number of people who have actually enrolled in an insurance plan – data which has not yet been released but is widely presumed to be much lower. The Congressional Budget Office had predicted that seven million people would enroll during the initial six month sign-up period from October to March, and the Obama Administration reportedly hoped to have 500,000 enrolled by the end of October. In short, enrollments appear to be behind schedule.
Further, the technical problems with healthcare.gov are undeniably serious and problematic. A number of well-respected health care journalists who are largely sympathetic to the Affordable Care Act, such as Sarah Kliff, Jonathan Cohn, Ezra Klein, and Jeffrey Young, have chronicled the challenges users face in trying to log into the site and shop for insurance. The problems range from individuals not being able to access various parts of the website – from creating an account to reviewing different plans and their costs – to flaws in transferring consumer information to the insurance companies who are offering coverage on the exchanges.
Is all of the news bad? Not necessarily. First, several states which opted to create their own exchanges (the approach the architects of the law believed most states would take but only 14 states plus the District of Columbia chose) have had relatively smooth and successful launches. By and large, for example, the marketplaces in Kentucky, New York, Connecticut and California are functioning well, and these states “constitute about a fourth of the national population” for Obamacare. In fact, Governor Steven Beshear of Kentucky, a Democrat, has attracted quite a bit of attention for vigorously and effectively promoting the Affordable Care Act “[i]n a state where dislike of President Obama runs strong and deep.”
Moreover, the last time the federal government launched a major health care initiative that involved online comparison shopping – the expansion of prescription drug benefits under Medicare, referred to as Medicare Part D, in 2005 – major problems also initially plagued the website and phone hotlines. In fact, the launch of the website itself was delayed by three weeks, and inaccurate information and technical glitches plagued the program at the outset. Consequently, Medicare Part D “had horrible approval ratings when it launched.” Yet, the program “is now wildly popular with seniors.” According to a Georgetown University researcher who studies Part D, consumers “don’t remember the glitches in the first weeks of getting coverage. It’s the coverage that sticks with people.”
Measured by that metric, it appears that the few consumers who have actually been able to purchase coverage on the Obamacare exchanges are excited and relieved to find lower prices, better benefits, and more security. David Corn at Mother Jones has received reports from workers whose costs have gone down by hundreds of dollars a month, families who now can afford much more comprehensive coverage, and individuals with preexisting conditions who can now access insurance through the exchanges after previously going uninsured or paying exorbitant rates.
In sum, it’s clear that the Affordable Care Act marketplaces are suffering serious problems at the moment, particularly the federal marketplace that covers 36 states. But, the relative success of several state exchanges, the popularity and effectiveness of Medicare Part D over time, and the anecdotal satisfaction of the consumers who have been able to purchase insurance since October 1st suggest that the headlines about Obamacare “failure” or “disaster” may be jumping the gun.