The Fallacy of the ObamaCare Exchange System (Connecticut)

“If everything works perfectly, we’re fine.  But things don’t work perfectly in life, and they certainly don’t work perfectly in IT development” – Kevin Counihan, CEO of Access Health CT

Despite the fact that since September 2010, over $150 million in federal grants has been poured into the Connecticut exchange, Access Health CT, it is doubtful that the exchange will be ready by the October 1st deadline.  Connecticut’s problem isn’t a lack of effort (it was one of the first states to start enacting an exchange).  Rather, it is a byproduct of the federal government creating difficult requisites and even more challenging deadlines—there is a certainly a reason why states, according to the GAO, have yet to complete 85% of the required program activities on time.  Obama waiting to implement new regulations until after his reelection campaign didn’t make the process any easier either.

First and foremost, Connecticut, similar to California and the rest of the country, is struggling to incite the competition that the exchange program was intended to create.  While attempting to craft a benchmark plan—an outline for essential benefits that all other plans must include—Kevin Counihan stated that Connecticut had established “a benchmark plan that is uncompetitive.  When we accepted it, it was.  It isn’t now because it’s too expensive.”  The high cost of the benchmark plan can be traced back to stipulations that drastically reduce the amount providers can charge older people (who can be charged only 3 times as much as young adults; previously, providers could charge 6 times as much), women (who can no longer be charged more than men), and sick people (who can no longer be excluded from coverage).

Adding insult to injury is the difficulty of crafting the necessary information technology infrastructure: “It’s a lot of work that’s going on in a very short period of time” stated Jim Wadleigh, the chief information officer for Access Health CT.  While the exchanges have often been compared to online travel planners (think Kayak.com), in reality, the exchange websites are tasked with much more than simply finding and comparing prices of health insurance plans.  The exchange programs must be capable of communicating with the agencies in “the new Federal Data Services Hub”—which shares information between the IRS, the DHS, and the DOD, to name a few—as well as state-based Medicaid computer systems and the many insurance plans that wish to sell in the market.  “The Hub” is then in charge of determining whether the applicant is a U.S. Citizen, or legal resident, and if they qualify to receive subsidies for their coverage.  The information from “The Hub” is to be quickly relayed back to the state exchange with hopes of having shoppers signed up in 30 minutes.  This only further complicates Access Health CT’s task because it is, unsurprisingly, extremely difficult to do fast, consistently accurate income estimation and verification.  As David Blumenthal, the former leader of the Obama administration’s health-technology efforts, explains, “you have to get systems at the federal level talking to each other that never have.”  

Apparently the federal government didn’t think its requirements were complicated, for it recently implemented new restrictions such as shortening the application filled out by shoppers.  These new regulations are a large reason why states, such as Connecticut, tend to be very far behind schedule.  In fact, Mr. Wadleigh, who still maintains that the site will be up and running by October 1, confessed that he imagined that the website would be up and running by now, but the changes instituted by the federal government have forced programmers to redesign parts of Connecticut’s website.

The fact that the exchange program in Connecticut may miss its deadline is especially troubling when one considers that Connecticut has been touted as a “pioneer” of the exchange programs.  Unfortunately, however, labeling Connecticut as a leader in the exchange process is not incorrect.  While Connecticut struggles, other states have found themselves in even less enviable positions: Maryland has already stated that it will postpone its exchange for at least 3 months and Washington State has had only one insurance company commit to participating.  The former director of technology for Utah’s exchange program, Dan Schuyler, explained what would likely be the case in many states: “Something will be up and running on October 1” but “It will be full of issues, bugs, and glitches.”  

It is already a major concern that young adults, particularly males, will choose not to get health insurance via the exchanges in 2014, and it is safe to say that missing the implementation deadline will do nothing to persuade this demographic to do otherwise.  If young adults choose not to be a part of the 7 million that the exchanges need to enroll by next March, the insurance pools will be weighed down by high medical bills and will eventually collapse.  In other words, the future of ObamaCare relies heavily on things that are becoming increasingly unlikely, having the exchanges come out on time and without problems.