12 Oct 2013

Someone Tell Krugman: More “Good Glitches” on Health Exchanges

Health Legislation, Krugman 15 Comments

Remember that on opening day of Healthcare.gov, Paul Krugman said the fact that people were hitting snafus with the website was actually a good thing, a sign of how many people were signing up.

Well, Tyler Cowen links to Bob Laszewski’s alarming report on his investigations into the implementation of the ACA (aka ObamaCare). Here’s Laszewski:

Based upon my survey of a large number of health plans accounting for substantial market share in the 36 states the federal insurance exchange is operating in, not more than about 5,000 individuals and families signed-up for health insurance in the 36 states run by the Obama administration through Monday.

It is not uncommon for a major health insurer with a large market share to report less than 100 enrollments in the first week.

Reports today say the enrollments continue to trickle in at about the same rate.

Worse, 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.

Here is one example from a carrier–and I have received numerous reports from many other carriers with exactly the same problem. One carrier exec told me that yesterday they got 7 transactions for 1 person – 4 enrollments and 3 cancelations.

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.

When health plans call the special health plan “help desk” they are lucky to get through. When they finally get through, the feds are creating a “help desk ticket” to be researched.

Now, if we are enrolling 20 to 50 people per day per health plan per state through the federal exchange, that might be sort of manageable. But if this thing ever ramps up to thousands of enrollments a day…

In summary, big market share health plans are getting maybe 50 enrollments per day per state from the feds and that little bit of new business is a mess.

15 Responses to “Someone Tell Krugman: More “Good Glitches” on Health Exchanges”

  1. Cosmo Kramer says:
  2. JSR08 says:

    Isn’t it also good that there are glitches because that means they have to spend more money to fix them, which is good for the economy? Like, a digital Broken Window (or alien invasion or hurricane) Fallacy?

  3. Tel says:

    I just ran into an article claiming that the healthcare.gov website cost half a billion dollars to build.

    You could build the entire datacenter for that. Five hundred million US dollars… unbelievable! So much for reducing healthcare costs. Insert obligatory liquidity trap stimulus joke here.


    • Tel says:

      Just to put this into context, the US government spent about the same amount of money on the healthcare website (that does not work) as it did on Solyndra (also not working).

  4. Jason Bonner says:

    According to the limited material I’ve read the website essentially attacks itself when you press “apply”, activating over 90 different data streams at a single instance, overloading the server used for requesting information. I’m certainly no IT expert, but it seems as if the overall architecture is problematic, or at least that is somewhat an initial consensus that I’ve read.

    I’ve read comparisons that if any software were rolled out at Obamacare’s current stage it wouldn’t even be considered in beta testing at this point in time. So what I gathered is that they essentially didn’t have time to test the software and are going to have to do this on the fly. Testing of this magnitude could take over a years time, but one source brought up the point that officials are currently adding server capacity, and that it won’t matter how much you add if the software isn’t configured to handle the additional capacity. He estimated that most of the software will eventually have to be reconfigured.

    So all in all it sounds like a “shovel ready” project that’ll take years to patchwork into a proper running entity. I wouldn’t be surprised if it costs hundreds of thousands of man hours over the next couple years just to get this thing running properly. No wonder Krugman uses the term “good glitches”.

  5. Daniel Kuehn says:

    Just in case anyone hear knows – I heard them talking about this on NPR and a guy said something to the effect that the big enrollment was going to happen in November, not October. Sounded like something having to do with stuff in the law kicking in or something but I’m not sure what.

    His concern was that the system gets worked out before that flood of people in November.

    Does anyone know what they were referring to?

    • Jason Bonner says:

      I don’t know if I can answer your question, but I’ll try my best. January 1st is the day your Obamacare insurance coverage begins. In order for you to obtain coverage on January 1st you must enroll by December 15th into a healthcare exchange. The goal for initial enrollment is about 7 million people into the healthcare exchanges. Just putting two and two together here if their goals are to be met between now and December 15th, assuming all the current problems with the application process, it seems November is going to be incredibly important and busy for enrollment.

    • Yancey Ward says:

      He was lying. You were supposed to be able to enroll on October 1st. There is nothing in law about November. Policies must be purchased by the middle of December to be in effect on January 1st, though you have open enrollment until the end of March for later starting coverage.

      • Jason Bonner says:

        “He was lying.”

        This is just terrible.

  6. Jim PM says:

    I think I read it was almost $700M they spent on this thing.

    The excuse about too much traffic is pathetic. This is just unacceptable .gov fail.

    • Tel says:

      I regularly get emails with web developers offering to work for around $15 per hour. At that rate, for $700M they could have hired the entire population of New Deli to work for one month.

  7. Innocent says:

    I am a programmer. This site is an affront to my profession. There is no excuse other than foolish regulation. How complex is this exchange? I have programmed many Websites. BY MYSELF pulling together massive amounts of information, requiring secure input from users, and nothing in my experience would have caused me to think that this site would be this bad. Show me the roll out of any private industry that had a budget this large that has failed so miserably? It does not exist. You know why? THEY WOULD BE OUT OF BUSINESS IF IT DID.

    The entire thing is simply horrible. Who in their right mind thinks this is acceptable in my profession. Almost everyone I have talked to who is IT and has ‘tried’ to use the site has rolled their eyes after trying it and discussing it with me. The thing is a travesty.

  8. Innocent says:

    Even more sad is that this is a simple concept site. I mean all it is is offering products to a consumer. PERIOD. Oh there may be some convoluted Government BS logic in then applying for a subsidy to the healthcare plan. You know some impenetrable maze of conditions meant to exclude all but the highly motivated who can overcome a bureaucracy.

    • Tel says:

      Hiring an eBay store would have been cheaper and worked better.

      I think Amazon might have a few options as well.

      • Ken P says:

        Amazon’s cloud service would have been a good choice. I’ve read that a lot of the problems they are having is hardware related. Why would they not use the cloud?

Leave a Reply