The White House is increasing its reliance on insurers by accepting their technical help in efforts to repair the problem-ridden online health insurance marketplace and prioritizing consumers’ ability to buy plans directly from the carriers.
The Obama administration’s broader cooperation with insurers is a tacit acknowledgment that the federal insurance exchange — fraught with software and hardware flaws that have frustrated many Americans trying to buy coverage — might not be working smoothly by the target date of Nov. 30, according to several health experts familiar with the administration’s thinking.
White House officials reject the idea that the strategy represents a contingency plan in the event that the online system continues to falter.
“We are working 24-7 to ensure that the site is working smoothly for the vast majority of users by the end of November,” said Chris Jennings, deputy assistant to the president for health policy. He said the administration remains confident that the site, HealthCare.gov, will be ready by the end of the month and that the White House always envisioned insurers’ direct enrollment of customers would be important to the law’s success.
The government has said for months that consumers would be able to go directly to insurance companies to buy the health plans offered on the exchange. But this was always imagined as a secondary route, along with call centers and in-person enrollment assistants.
If insurers’ sites became a main way to buy coverage, it would undermine the side-by-side comparison shopping — as is used on travel Web sites such Kayak — that HealthCare.gov is meant to promote. That’s because individual insurers are not obligated to tell their customers about competing health plans available. They are required only to advise consumers that other plans exist and can be found on HealthCare.gov.
Insurers are eager to take on a larger role. But they, like consumers, have been stymied by the online system’s technical problems. During one step in enrolling customers — determining whether their income qualifies them for government help with paying for health plans — insurers must connect to part of the federal online system, and that part does not work. White House officials and insurance industry leaders have been talking about how to solve this problem, perhaps on a temporary basis, and insurers are insisting that they be allowed to keep any extra subsidy money they might accidentally be paid, said people familiar with these discussions who, like others interviewed, spoke on the condition of anonymity because of the topic’s sensitive nature.
The 2010 Affordable Care Act requires most Americans to have health insurance, and December is a vital period. Those who are uninsured must buy plans by Dec. 15 to be covered by Jan. 1, the date the requirement begins. Those who do not buy coverage by March 31 will face financial penalties. The question is whether everyone will be able to meet those requirements if the Web site’s problems persist.
The possibility of using health plans to directly sign up large numbers of uninsured Americans is a strategy by the administration and the insurance industry to try to deflect growing pressure from Capitol Hill. Even some Democratic lawmakers want to give people more time to buy coverage. And Sens. Joe Manchin III (D-W.Va.) and Mark Kirk (R-Ill.) introduced legislation late last week that would eliminate the tax penalty for next year, imposing a higher fine in 2015.
Such delays are anathema to the insurance industry, whose leaders have warned that companies would end up with mainly sicker people signing up early on.
Although potentially enabling more people to buy health plans promptly, a greater reliance on the industry to sign up new customers could have other ripple effects, such as prompting ads that might run counter to the administration’s messaging.
“One key question is whether insurance company advertising will accurately reflect the benefits people can get from the Affordable Care Act or if they will attempt to use fear and uncertainty to push people into a particular plan to increase their profits at customers’ expense,” said Eddie Vale, a strategist with Protect Your Care, an advocacy group that promotes the law.
In recent days, several people familiar with work on the Web site — all of whom spoke on the condition of anonymity to discuss the matter frankly — said that the system is improving but that they cannot say definitively that all of the problems will be fixed by the target date.
“We’re working to make as much progress as possible by November 30, and quite frankly, beyond November 30,” one said, adding, “It’s a critical date, without question, but don’t think of it as an unveiling date. The goal is to make significant improvements by that day.”
Jeffrey Zients, whom the White House assigned to oversee the Web site’s repairs, told reporters on Oct. 25 that by the end of November, HealthCare.gov “will operate smoothly for the vast majority of consumers.” On Friday, he told reporters that an increased volume of visitors had exposed additional problems with the site and that it was “a long way from where it needs to be.”
Some supporters of the health-care law think a back-up plan makes sense. The promised timeline for getting the Web site to work smoothly “is really tough, given the depth of the problems that have been uncovered,” said Dan Mendelson, chief executive of Avalere Health, a health-care consultant. “What is becoming evident is, even if it is largely fixed by the end of November, it is unlikely to be seamless. . . . The administration needs to shift to other, assisted methods [for buying health plans], so they can get this thing back on track, and de-escalate focus on the Web site.”
Last Tuesday, Jennings and White House Chief of Staff Denis McDonough attended the board meeting of the insurance industry’s main trade group, America’s Health Insurance Plans (AHIP), according to several people familiar with the private meeting who said that they talked, in part, about how to fix the technical problems enough so that health plans could play a larger role.
Insurers, some of whom have circulated memos recently laying out possible contingency plans, are reluctant to talk publicly about details of their conversations with White House officials. “We are continuing to work with the administration to get direct enrollment up and running,” said AHIP spokesman Robert Zirkelbach, declining to discuss specifics.
Officials from the Centers for Medicare and Medicaid Services and federal contractors are furiously working to tackle the site’s problems, said an administration official with knowledge of the project who spoke on the condition of anonymity to discuss operational details.
Hundreds of people are working at several sites in the Maryland and Virginia suburbs, the official added, with “people coming in and out as a result of niche expertise.” The goal, the official said, is to ensure that by the end the month a consumer could complete the enrollment process in “one continuous process, at any time of their choosing.”
As part of the effort, the official said, several insurance companies have recently dispatched technical experts to the Washington area at the federal government’s request, to sit with government workers and contractors. Their focus, the official said, is on improving the parts of the Web site needed for insurers to enroll customers directly, as well as error-ridden daily reports meant to tell each insurer who has just enrolled.
Starting this week, another administration official said, experts who write code for insurers will work directly with those writing code for HealthCare.gov, to address these problems on the back end of the system.
Dignity Health chief executive Lloyd Dean, who runs one of the nation’s largest hospital systems and is a close ally of President Obama and Health and Human Services Secretary Kathleen Sebelius, said he is confident that the administration has sufficient political and technological firepower focused on the enrollment system.
“The president is asking the right questions about the process, the strategy, the importance of bringing the resources to bear on the problem. He does not need to be a technical expert who can go to the data level. He now has those resources in place,” Dean said in an interview. “There is a master plan on how to address this issue. And that’s being tested every day.”
Quality Software Services, which the Health and Humans Services Department installed a few weeks ago as the general contractor overseeing the project, has put teams of people on several of the system’s biggest defects, one person said. These groups — which include contractors, administration officials and a handful of experts from firms such as Google, Red Hat and Oracle — focus on specific targets while larger teams keep an eye out for major problems that require additional help or span different elements of the site.
On their own, insurers can help consumers through almost the entire enrollment process, but they need to rely on the federal online system for people to enter their incomes and find out whether the government will pay for part of their health plan. Since the enrollment period began Oct. 1, insurers have not had access to that feature — and, as a result, some have a lineup of potential customers unable to choose a plan and complete their purchase.
Part of the discussions lately between insurers and administration officials has been about what to do if that function is not fixed soon. One idea circulated within the insurance industry would be for HHS to approve a method to estimate subsidies and give preliminary tax credits based on those estimates — with the accurate amount determined later, once the system works better.
According to several people familiar with these conversations, insurance industry leaders have said that they would insist on a guarantee that they would be compensated for any underpayments — and that they have asked to keep any overpayments. Said one health-care consultant who is knowledgeable about insurance exchanges and who has been in touch with administration officials: “The concern is: Who bears the risk?”