Tuesday, 22 October 2013

HealthCare.gov Delays Are Way More Than Just Glitches

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It’s been three weeks since the much ballyhooed start of enrollment for ObamaCare, and the numbers are not just a little off what the administration expected. They are disastrously low

According to Mike Huckabee, fewer than 500,000 of the seven million uninsured people needed in the next six months to make this program viable have been able to apply for coverage online, and most of them were through state exchange websites, not the federal portal. What’s not clear is just how many are going to make those purchases once they see what their premiums are. That, according to Forbes, is the real reason for the so-called glitches and delays: The Obama administration didn't want applicants to see what their premiums were before any available subsidies were applied. They would discover that the Obama promise of lower premiums was a lie after all. And that would force the administration not only to admit to the lie but to consider “unthinkable options” such as delaying the roll-out for another year, or restarting the enrollment program from scratch.

When the website was initially being designed, it was going to allow an applicant to browse various plans and premiums before enrolling, just like free market insurance websites such as Esurance.com. But that option was eliminated when it was clear that premium increases — not decreases, as promised — would expose the lie. Instead, in order to get an insurance quote, an applicant would first have to enter personal financial data, which would then be routed to other systems and then finally to a credit-history firm. Called the Oracle Identity Manager, it is embedded into the government’s identity-checking system. But it forces the different programs, designed by different entities to serve different purposes, to talk to each other. And they don’t.

Forbes quoted two authors from the Wall Street Journal:

The [administration’s] decision to force people to apply before shopping “proved crucial because, before users can begin shopping for coverage, they must cross a busy digital junction in which data are swapped among separate computer systems.… If any part of the web of systems fails to work properly, it could lead to a traffic jam blocking most users from the marketplace.”

It was a political decision. The administration feared blowback from Republicans who have tried to derail and defund ObamaCare since its inception. It was better to press forward by using a system that had been predicted as far back as February to have serious problems. The political risks were perceived to be greater than the digital ones. Henry Chao, the deputy chief information officer for the Centers for Medicare and Medicaid Services (CMS) said eight months ago that he expected applicants to have a “third world experience” when trying to sign up in October, but was told by his superiors that delaying that date “was not an option.”

When Kathy Kristof of CBS MoneyWatch tried to sign up for coverage for herself, she ran into the reality that HealthCare.gov had tried to hide:

The promise that you could keep your old policy, if you liked it, has proved illusory. My insurer, Kaiser Permanente, informed me in a glossy booklet that “At midnight on December 31, we will discontinue your current plan because it will not meet the requirements of the Affordable Care Act.” My premium, the letter added, would go from $209 a month to $348, a 66.5 percent increase that will cost $1,668 annually.

What made my plan too substandard to survive under Obamacare? It did not provide maternity benefits. I’m 53 years old. I figure pregnancy would require an act of God. (Incidentally, maternity benefits will be covered on men’s policies too. Let’s hope medical science comes a long way so you guys can use those benefits.) My policy also did not cover substance abuse treatments or psychiatric care….

Meanwhile, the things that mattered to me — that I would be able to limit my out-of-pocket costs if I had a catastrophic ailment — got worse under my new Obamacare policy. My policy, which has always paid 100 percent of the cost of annual check-ups, had a $5,000 annual deductible for sick visits and hospital stays. Once I paid that $5,000, the plan would pay 100 percent of any additional cost. That protected me from economic devastation in the event of a catastrophic illness, such as cancer.

Kaiser’s Obamacare policy has a $4,500 deductible, but then covers only 40 percent of medical costs for office visits, hospital stays and drugs. Out-of-pocket expenses aren’t capped until the policyholder pays $6,350 annually.

Sure, that’s only another $1,350. But it adds to the additional $1,663 that I’m paying in premiums, making my personal cost for Obamacare add to $3,018 annually. This, by the way, is the bare-bones policy under Obamacare — the Bronze plan. Premiums for plans that offer lower deductibles and premiums would cost almost twice as much, according to the Kaiser booklet.

That’s the reality that the president tried to deny on Monday in his deceitful “happy face” talk in the Rose Garden. The president expressed frustration over the delays caused by his administration’s deliberate attempt to hide the fact of premium increases, without taking any of the blame for them:

There’s no sugar-coating it. The website has been too slow, people have been getting stuck during the application process. Nobody is more frustrated by that than I am….

[But] the health insurance that’s being provided is good. It’s a right for all to enjoy, and I intend to deliver on that promise.

As Ayn Rand said, whenever a government official is handing out goodies, it’s best to ask “at whose expense?” Financial advisor Dave Ramsay posted a nine-minute video explaining why premiums under ObamaCare have to go up. It’s not a matter of politics, or conservatives versus liberals, said Ramsay; it’s a matter of mathematics. In order to cover sick people, healthy people are going to have to pay more. Since healthy people won’t decide on their own to pay more in order to provide that coverage, they must be forced to, at the point of a gun.

That’s the real back story on the delays and glitches at HealthCare.gov.

 

A graduate of Cornell University and a former investment advisor, Bob is a regular contributor to The New American magazine and blogs frequently at www.LightFromTheRight.com, primarily on economics and politics. He can be reached at

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