By Lambert Strether of Corrente.
What we’re also discovering is that insurance is complicated to buy. — Barack Obama
With open enrollment two months away, ObamaCare is gradually becoming newsworthy again, even if it is shrinking as a political issue. Monday’s New York Times piece, “HealthCare.gov Is Given an Overhaul”, shows not only problems with ObamaCare, but with the party system and the press. The good news is that they’ve improved the front end:
In the improved online application, account creation is completed on one, long screen, instead of using a separate screen for each section,” the administration said. “This requires fewer clicks and makes the account creation process simpler and faster.”
The new application has a feature known as backward navigation, which allows consumers to change information entered on previous screens. The old application did not have this capability, so consumers often had to start over if they wanted to correct an error.
That’s amazing, really. I had no idea the old application didn’t have a back button. And nobody noticed that and they launched anyhow. Odd.
Times buries lead: Potential for Corruption in CMS ObamaCare Spending
Times did bury the lead. Here are the final three paragraphs of the story:
The Government Accountability Office, an investigative arm of Congress, raised questions on Monday about financial management of the federal insurance exchange and related activities. The auditors said in a report that
Gee, that’s odd. Especially since advertising, public relations, polling, focus groups, and conferences all would have amounted to walking around money for Democratic operatives. (In this connection, we remember how Democratic-run California specifically exempted Covered California contracts and spending from California’s open records law. Wait, wait. I thought Democrats were all about transparency and accountability? Did I not get the mem?) The Times has more:
The new secretary of health and human services, Sylvia Mathews Burwell, a former White House budget director, has described improved management as one of her top priorities. But the department disagreed with recommendations from the G.A.O. about steps she should take to track spending and report more accurate data.
“More” accurate data? Or any data at all
The auditors tried to determine how many federal employees had been shifted from Medicare, Medicaid and other programs to work on the insurance exchanges. Information provided by the administration “was not complete and was based on personal recollection unsupported by documentary evidence,” the report said.
And why would they have to be shifted? Oddly, the Times doesn’t ask; and we’ll get to one possible explanation shortly. Meanwhile, the mind boggles at the spectacle of department heads proffering personal anecdotes as a substitute for quantitative evidence in personnel matters. What is this, some kinda third world country? Wait, don’t answer that. Before we go on to look at the real story — the story the Times didn’t mention — let’s see what others have to say about the maladministration’s “general accountability” #FAIL. The Hill:
The Obama administration has spent at least $3.7 billion to build and promote online marketplaces under the Affordable Care Act, but it can’t prove exactly where it all went, according to an audit released Monday.
$3.7 billion? That’s almost real money, and a figure the world’s #1 newspaper somehow managed to airbrush out of its coverage, rather in the manner of the editors of the Great Soviet Encyclopedia airbrushing purged or executed figures out of group portraits with Stalin. From the report itself (PDF), a great slab of official prose that I will summarize, and yes, this really was one paragraph:
In order to make informed decisions regarding matters affecting the financial aspects of operations and the performance of programs, it is critical that decision makers have available timely and reliable information. This is particularly true as it relates to programs that have been subject to the significant degree of public and congressional scrutiny that has characterized the implementation of PPACA, including the CCIIO-related [Center for Consumer Information and Insurance Oversight] private health insurance and health insurance exchange provisions. However, CMS does not have documented policies and procedures governing responses to non-routine information requests, such as those that may originate from oversight bodies. CMS’s reliance on manual procedures and personal recollection resulted in an inefficient and time-consuming process to provide the requested information. In addition, Also, because its process for obtaining the information and its review and approval of the information provided were not documented, there is no assurance that such procedures have been properly performed. Collectively, these issues increase the risk that significant errors may not be prevented or detected and corrected before information is provided in response to requests from Congress and other decision makers. Consequently, such users of these data may not have timely and reliable CCIIIO-related financial managementinformation, which could hamper their efforts to make informed resource allocation decisions and assessments of program performance.
Quite a beat-down if you translate. Shorter: Any number that the administration emits on ObamaCare is bullshit. Totally tainted bullshit that people, like, made up (because that’s what “personal recollection” and processes that “were not documented” mean). Can you imagine the footstamping and frothing that would come from career “progressives” and Democrats if the Republicans spent $3.7 billion dollars on their “signature domestic initiative” but couldn’t explain where the money went?
Times buries story: The ObamaCare Exchange’s Back End Systems Are Not Finished
But leave the obvious possibilities for corruption aside. Daniel Okrent of blessed memory once wrote, during his painful stint as the Times’s
ombudsman public editor: “With very few exceptions, the longer you’ve been here, or the higher you’ve risen in the organization, the less likely you are to believe The Times is, or should be, the paper of record.” I couldn’t agree more. Because the Times didn’t just bury the lead. They buried the story. Here it is. The Hill:
The health insurance exchanges are set to re-open for enrollment in just two months. This countdown has the White House and federal health officials bracing to see if the system encounters any fresh technical problems.
How about the old technical problems?
Top Department of Health and Human Services (HHS) officials have also said that
The mind reels. It’s like Amazon rolled out a spandy new shopping cart on the front end, but all the paperwork to handle your order was still being done on paper with typewriters and triple carbons instead of computers. And yes, that really is what’s happening. (Here we pause to remember that LBJ rolled out Medicare in 1965 to all over-65s, using punchcards and steam-powered mainframes, communicating by the US mail.)
From an August 2014 post at Naked Capitalism, when the back end wasn’t finished either:
Here’s what the back end does (the HHS jargon for the back end is the “data hub”). From the recent GAO report, “Ineffective Planning and Oversight Practices Underscore the Need for Improved Contract Management”:
The data hub routes and information among the [Federal Marketplace] and external data sources, including other federal and state sources of information and issuers. For example, the data hub confirms an applicant’s Social Security number with the Social Security Administration and connects to the Department of Homeland Security to assess the applicant’s citizenship or immigration status.
In other words, it’s the back end’s job to make sure that data submitted by the “consumer” is consistent with the data available electronically from other sources, like the Federal government and the states. From a report by the Inspector General of HHS:
A marketplace uses the Data Hub to that the applicant’s information is consistent with Federal data sources, such as tax filings and Social Security data.
ifwhen the back end stores data that is inconsistent, we are in Garbage In, Garbage Out mode: The impact for the “consumer” could range from a bad mailing address to not getting expected coverage at the hospital. It’s not even clear how the “consumer” finds out their data is bad, or how they correct it.
The Back End #FAIL Means Everything Is On The Honor System
The first thing to note — leaving aside for the moment the impact on
consumers citizens — is that the ObamaCare back end cannot produce accurate billing data for the insurance companies. As a result, they’re invoicing the Feds for what they think they are owed. I hate to quote Avik Roy, but since the career “progressives” and Democrats have zipped their lips before the mid-terms, I have to:
The back end of Healthcare.gov—where your payments to insurers are reconciled with your income and your health status—remains a mess. The White House continues to accept estimates from insurance companies as to what they’re owed, without any definitive knowledge of what companies are actually owed.
Wowsers. You may also remember from the ObamaCare rollout that enrollees were also put on the “honor system” for their eligibility information, and hence their subsidies. So the administration has created a system where enrollees can just say how much they should get, and insurance companies can just say how much they should be paid! Everything is on the honor system (until such time as the system actually does work — which, let’s be honest, it may never do; at least 50% of software projects fail, especially large ones (list) — and we have what Bob Lasweski calls “the mother of all reconcilations”). Look, if we’re going to go all “from each according to his abilities, to each according to his needs” on this, why not just admit the Communists are right and go for single payer? And for bonus points, we can junk this boondoggle of a broken system!
The Back End Project Looks Like Its Out Of Control
The second thing to note is that the back end — just like the front end last summer — is showing the signs of a project that’s out of control. The back end was supposed to be fixed when Obama’s tech dudes arrived back in December 2013; it was their #1 priority. But the dates have kept slipping: From December 2013 to March 2014 to mid-summer to not now; and the administration refused to make a schedule available, or a list of open issues. Finally, the enrollment numbers keep fluctuating; we can’t even get reports that include the drop-and-adds. A record-keeping system that can’t produce an accurate count of the records it stores is out of control, by definition.
The Back End Cannot Handle “Life Events” via 834s
The third and final thing to note is where the back-end is failing. Some of the simpler functions are computerized; but more complex functions are still handled manually, on paper. And which functions would those be?
You will remember, of courses, that one of the most pleasant features of ObamaCare is that you must report “life events” that might affect your subsidy, which include: getting married or divorced; having a child, adopting a child, or placing a child for adoption; a change in income; health coverage; moving; disability; gaining or losing a dependent; becoming pregnant; tax filing status; and incarceration, among others. Well, as it turns out, the back-end can’t handle “life events,” so even if you submit your “life event” online, at some point the process turns to paper.
You knew I was going to get around to the 834s, right? This is it. Life events are supposed to be handled electronically by 834s, but the back end still can’t do that, so they are done on paper. Here is a Q&A between AHIP and the House Energy and Commerce Committee [PDF]:
834 transmissions provide insurers with enrollment information for individuals from HealthCare.gov. It has been repeatedly reported that there are numerous errors in these transmissions with failure rates of over 30%.
As we do not process enrollments directly, we are unable to comment on the specific failure rate of 834 files. As I mentioned above, our plans have indicated there are improvements, but 834s in response to “Life events” still require manual processing to ensure accurate enrollment data and premium rates.
So, how many of these “live events” are there likely to be? It looks like several million:
The U.S. Centers for Medicare and Medicaid Services (CMS), which operates the federal marketplace for consumers in 36 states, said the number of people with data problems is down from June when 966,000 had citizenship or immigration discrepancies and 1.6 million people had problem data involving income.
There was no word on how many more people might have data mismatches after enrolling for Obamacare coverage through 14 other insurance marketplaces operated by individual states.
And those “data problems” are all “life events,” right? Income, immigration, etc. So, since there are no good numbers (because the back end is hosed, see above) we can assume that “down from June” doesn’t mean much. Be generous, say a million 834s need to be processed annually; 14% of ObamaCare’s total enrollment, if you believe the administrations 7.3 million figure. (There are higher estimates.) That’s a lot of paperwork!
But wait! There’s more! The administration has said that it will “auto-enroll” people, so their current plan just rolls over. But that’s nutty, even by administration standards. The neo-liberal dogma that ObamaCare is based on says that shopping is always good, so what if the magic of the marketplace delivers a better plan, but you don’t check it out, and end up paying more money than you want to?
Obviously, as soon as open enrollment begins, people should affirmatively shop for new plans, and change to a better one, if possible. And those changes will be handled how? That’s right: By the 834s, placing more strain on an already strained system, just when it’s at the point of greatest strain.
Of course, there’s a lot to be said for paper — even when processed by criminals like Serco, the UK firm Obama brought in to handle applications filed by mail. And it isn’t necessarily true that screens are more accurate than paper, at least for reading. But when you picture a workflow where a citizen enters data onto a screen, that data is then printed out and processed, no doubt by comparing it to other data, whether on paper or on screen, and then re-entered into a second computer to be passed on to the insurance company… Well, doesn’t that strike you as a little bit error-prone? Even prone to fraud, given that the processing will be privatized? Granted, it’s a jobs creation program, but shouldn’t a jobs program do something productive? Frankly, it reminds me of MERS, where a big truck would pull up to a warehouse loading dock out in the boonies at night and drop off a pallet of mortgage forms to be robosigned ….
And when a famously tech-savvy administration can’t fix a back end that was broken in December after nine months…. With the best tech talent in the world available to it…. Something just ain’t right.
Anyhow, the mid-terms are coming up. So pass the Victory gin.
 POM-POM WAVER PROPHYLACTIC The good news is that a large number of people have enrolled, possibly above projections, although we don’t really know, because there’s no nationally aggregated, accurate, and official acounting. Therefore, not as many thousands of people are dying for lack of care as might otherwise be the case, even if insurance companies are still shifting costs to the sick. More insurers are said to be signing up, and premiums will only go up 8.4%. Or so it’s said. Again, there’s no accurate nationally aggregated data for any of this: Not sign-ups, not premiums, not costs, not anything.
 Because I can’t bring myself to cite a right-wing “scholar” in the body, I’ll cite them in a note, because AEI’s got it right:
The insurers are submitting monthly invoices to the federal government of the total subsidy amounts they think they are owed, and the Obama administration is writing them checks based on the invoices. For those who might worry about giving the for-profit health insurance industry a direct pipeline into the U.S. treasury, the administration says not to worry. It will all be reconciled later with actual, verified enrollment data, whenever the data becomes available from the still unbuilt “back-end.” What could possibly go wrong?
 By all accounts, Obama’s tech dudes were the crème de la crème of Silicon Valley and highly competent. So it seems odd they didn’t fix the back-end when they had their hands on the system, especially when they publicly made it their top priority. Were they told to back off? If so, why?
CONCERN TROLL PROPHYLACTIC If you got good coverage and care under ObamaCare, I’m happy for you; in a program that large, the odds were always that some would. Do you think all should have equal access to the care you got, and, if so, what are you doing about it?