Thursday, November 21, 2013

The Treasury Department Has the Second Rate Sequel Syndrome

And now, on the lighter side:


TO:         The US Treasury Department

FROM:  The American People

RE:          Limited edition coins

MESSAGE:  Enough already!  No more!  Have you ever heard of Hollywood and the Second Rate Sequel Syndrome?  You know, when Hollywood comes out with a great movie that is a big hit?  So they think they have found a winning formula, so they keep doing it over and over, as nearly the same as possible, thinking they can recreate the magic of the first time?  Well, they never can, because part of what made the movie such a hit in the first place was its uniqueness – the sense that this was a one-time event that will never happen again.  Making more of the same never measure up and they cheapen the original.

Well, you have a bad case of the same thing.  You came out with state quarters, and they were a huge hit, so you keep trying to do the same thing, and it isn’t working.  Washington DC and Territorial quarters, Lewis and Clark nickels, Presidential dollars, and now America the Beautiful quarters.  Spare us! 

Nonetheless, if you really want to reduplicate the success of state quarters, we should take a look at what made them such a hit.  I think you have some of it right, but only some.  You have recognized that part of what made them so cool was that they were a limited edition, and that people would want a collection with all of them in it.  So you have sought to duplicate that with various other limited editions.  You mostly seemed to realize that part of their secret was that they were different enough to have an exciting sense of novelty, but familiar enough not to offend people’s sense of tradition.   You matched that in the quarters and nickels, but not so much with the Presidential dollars.  The American people just don’t seem willing to accept dollar coins no matter what you do.  But there are some other features that made state quarters uniquely cool might be easiest to duplicate with Presidential coins, or are simply not susceptible of duplication at all.

What made state quarters so cool?

The hype and publicity.  There was a big announcement of state quarters that I saw to a much lesser extent with Presidential dollars and not at all with the nickels or national park quarters.  You can’t very well expect people to get excited about what you are doing if you don’t tell them you are doing it, can you?  But hype and publicity is the easiest of these things to duplicate; the others are more difficulty.

The appeal to our sense of ourselves as Americans.  After all, as every coin says, E Pluribus unum.  From many [states], one [nation].  Having many states, each with its own unique history and character is part of what we, as a country, are.  Celebrating each state’s uniqueness while reminding us that we are still one country is very American and appeals to most people’s sense of ourselves as a nation.  Washington DC is also part of the US, of course, and various Territories belong to us, but I don’t think most Americans have the same sense of kinship to them, or sense them as part of our identity as we do with states.   The Lewis and Clark Expedition was certainly an important event, but not quite central to our identity in the way that being made up of 50 states is.  And as for national parks and monuments – well, they are nice, I guess, and some make pretty pictures (others are not so well done), but no one keeps track of national parks the way they keep track of states.   And they certainly are not central to our identity in the way that states are.   National parks and landmarks are something we have.  States are something we are.   The one that might work here are Presidential coins.  It is, after all, a central part of our national identity that we have Presidents, chosen by the people.  We divide our history into Presidential administrations, just as people in monarchies divide their history into the reigns of kings.  I think a limited edition of coins with all Presidents , if done right, could be made to work.

Anticipated, logical sequence.  It was made clear what order state quarters would be issued in – the order in which states were admitted to the Union.  It made sense.  It was also educational – people learned in what order states were admitted.  Since the sequence was given, we always knew which state was coming next.  Is there any logic at all to the sequence of America the Beautiful quarters?  If so, I certainly don’t know what it is.  Also, we know what the 50 states are.  Does anyone know what all our national parks are?  Certainly this is not common knowledge.   As for the Lewis and Clark nickels, they are nice, but there is no logical sequence to them.  The only other coins with a logical sequence are (once again), the Presidential coins.

Education.  The state quarters were educational.  If nothing else, they let us know in what order the states were admitted, something most people presumably did not know before.  And they showed unique traits about some states that inspired people to want to learn about them.  Who outside of Delaware ever heard of Caesar Rodney?  Who outside of Connecticut heard of the Charter Oak, or outside of New Hampshire heard of the Old Man on the Mountain?   National Parks may teach people about national parks we may not have heard of, but they just aren’t as exciting.  And the Lewis and Clark nickels are just pretty pictures.  Presidential coins, now, could also be educational.  They could teach us the sequence of Presidents, again, something most people do not know.

The suspense.  A whole lot of the fun of state quarters was waiting to see what would be the emblem to represent the next state.   It had some of the excitement of a new movie release.  The Virginia quarter is out!  It shows the three ships that started Jamestown!  This would be easiest to duplicate with Presidential coins. Your current Presidential dollars just show the head of the Presidents on one side, and the Statute of Liberty on the other.  Where is the excitement in that?  Show the head of each successive President on one side and something he is famous for on the other.  Granted, there would be some problems here.  What is, say, Millard Fillmore famous for?  Or Chester Arthur?  Another problem is that some of our Presidents have been controversial.  But so what?  Many of our states have their share of controversy, too.  I thought the Treasury did an excellent job of highlighting each state's unique character while steering clear of controversy.*  Any President famous enough to be controversial must have done something famous but non-controversial as well.  I think showing each President with some claim to fame (well, sort of fame) could duplicate some of the excitement that went with state quarters.**

Power to the people.  State quarters were designed by the Treasury Department, but the people of the states were given a voice in deciding what they wanted to represent them.  That's exciting!  How often do you get to participate in designing a coin?  I think this democratic nature of state quarters was also part of their appeal.  And it is a part that I don't see being duplicated with Presidential coins, or any other limited edition either.

So, there is my advice.  If you want to recapture the magic of state quarters, do it with Presidential coins of some sort.  Hype the coins, announce that you will issue coins for each (dead) President, in chronological order, with his claim to fame on the back.  Then let the suspense build as people wonder what made Rutherford B. Hays famous.  And don't do dollar coins.  They violate people's sense of tradition.

Alternately, you could just drop limited edition coins and go back to the standard.

*If anything, I would criticize them for being too bland in some cases.  Louisiana, Texas, and New Mexico are some of our most colorful states.  And the best they could do was the Louisiana Purchase, the Lone Star, and the Zia Sun?!?  There must be something with more character!  Also, I did not approve of putting Lincoln on the Illinois quarter.  The man is already on the penny and the five dollar bill.  That should be enough!  Give us a scene from Chicago, or something indicating prairies and farming.
**We would have to stick to tradition and allow dead Presidents only.  Living Presidents are just too controversial.

Sunday, November 17, 2013

Obamacare and the Future

Current conventional wisdom has it that Obama is toast, that the unpopularity of Obamacare proves that the Democrats can never be trusted with power again, and that the Republicans will sweep the 2014 and 2016 elections, and that the program is already in a terminal death spiral.  Of course, conventional wisdom a month ago was that the Republicans were toast, that the Democrats would sweep the 2014 and 2016 elections, and that the shutdown proved the Republicans could never be trusted with power again. Welcome to the fickle world of news cycles.

So far as I can tell, the websites problems did not dent Obama's popularity and actually enhanced the popularity of the program, probably because most people thought a website for the uninsured to buy insurance was a good idea, and that malfunctions could be fixed.  Cancelled policies have seriously hurt both the program and Obama.  Even if only a relative few have lost coverage, they make compelling stories, and besides, once policies start cancelling, no one feels safe.  Besides, Obama promised that no policies would be cancelled, so his credibility has taken a hit.

But notice another thing.  Republicans are no longer pushing for outright repeal.  After all, now outright repeal would mean shutting down the exchanges where non-trivial numbers of people have shopped or want to shop for insurance, stripping at least some people of insurance, and killing a system which is working in at least some states.  Instead, they are trying in various ways to discourage young and healthy people from shopping on the exchanges -- by permanently legalizing bare bones policies, and by seeking a delay of the individual mandate. They are hoping that these things will induce a death spiral and cause the system to crash and all the older and sicker people who bought insurance on the exchanges to lose their coverage.  (Hurray!  Wait a minute, why did we want that?)

Looking at the future of the act, I see one main danger that could truly kill it.

It is not the malfunctioning website.  That will be fixed.  It will probably not be fixed by November 30, and Obama should start admitting as much, lest his credibility take yet another hit.  But I expect it to be reasonably functional well before the end of March.

It is not the cancelled policies.  They are more problematic, but they can be replaced once the connections to insurance companies start functioning.  Besides, cancelled polices (replaced, though sometimes at higher rates) are a start up cost that will not be repeated.  They may be a big issue in the 2014 election (or they may not), but they are unlikely to be anyone's top worry by 2016.

It is not even that some cancelled policies will not be replaced by December 15 and will lead to a few weeks' lapse.  For healthy people (and buying individual policies  is difficult if you are not healthy), it will be just another start-up cost -- something people may still be angry about by the 2014 elections, but not by 2016.  Something does need to be done for people with serious medical problems for whom even a few weeks' lapse could be disastrous.  We need more publicity for this matter in order to force Congress and the President to do something.  But even that is a starting up cost that will be a one-time event.

It is not, as some people have suggested, the second rate shock that will hit when people learn about the deductibles and copays on the policies.  I could be wrong here, but I do not expect that to be such a big issue for the simple reason that the American people are used to deductibles and copays.  Besides, the Platinum, Gold, Silver and Bronze plans make clear that they are ranked by deductible.

It is not the prospect of a death spiral, at least not yet.  This is a real danger over the long run, but there are built-in safeguards to keep it from happening as a result of anything in the first year, or even two or three. Government is backstopping the insurance companies for the first three years so that if they do not get enough healthy enrollees at first, they will not have to raise their rates right away.  A death spiral is a long-term danger if the system ends up not working, but it is not at hand any time soon.

It is not even the prospect of a second government shutdown and threatened debt ceiling breach, although I do see some danger there.  Republicans backed down last time because public opinion was clearly against them.  Depending on how well the system is working by next January 15 (and whether news coverage has moved on to something else), public opinion will probably be less clear-cut next time around.  Granted, public opinion is unlikely to support a shutdown for the sake of shutting down the exchanges and stripping people of insurance they bought through them.  But it might support the Republicans on various modifications that will undermine the system over the long run, such as indefinitely allowing bare bones plans, or delaying the individual mandate.

And that is where I see the real danger -- rate shock when the individual mandate hits.  The individual mandate has always been the least popular part of the law.  (Really, the only unpopular part when surveyed by itself).  Indeed, Obamacare is less popular with the uninsured than the public at large* precisely because they fear being penalized for being uninsured.  The whole idea of forcing people to buy a product they don't want strikes many people as outrageously un-American.  So far, the concept has been mostly an abstraction, but starting next year it will become real.  And, what is worse, contrary to what many people believe, the fine is not $95.  It is $95 or 1% of adjusted gross income, whichever is more.  That means that a lot of people will be dismissively expecting to pay a $95 fine, not too concerned and will get quite a shock when it turns out to be hundreds of dollars.**  A President already facing credibility problems over promising people they can keep their insurance, and that the site will be fixed by the end of November, will take another hit, a big one.  And unlike the website malfunctions and the cancelled policies, this one is not going away.  Indeed, the fine for not buying health insurance will go up the next two years, and people will be angry.  And if the Republicans propose legislation, and perhaps threaten to shut down the government and default on the debt in order to force a delay or repeal of the fines, public opinion is apt to back them and be very hard to resist. If they run on a repeal of the individual mandate in 2014, or 2016, they will have a popular issue, one that will not go away.  And one that could very well induce the death spiral Republicans so desperately crave to kill the program.
*Can't find link
**I assume the number of people with six figure incomes and no health insurance is very small.

Saturday, November 16, 2013

So, What Are the Prospects of Fixing Obamacare?

So, granted that Obamacare's prospects for survival depend on it being repaired, what are the prospects of it being repaired?  Conventional wisdom clearly has it that the problems will not be repaired by the end of November, and it will be a serious blow to Obama's already damaged credibility.  But what does it mean to say that it won't be fixed by then?  I still don't have a clear answer.

A few things can be cleared up at least.  The exchange has two parts, the Hub and the Marketplace.  The Hub is where customers create an account and apply for financial assistance.  The Marketplace is where they browse for insurance and sign up.  After being an initial mess, the Hub appears to be working reasonably well.  People can reliable start accounts and at least semi-reliably apply for financial assistance.  I had wondered if the applications were getting processed, and apparently they are.  People determined to be eligible for Medicaid/S-CHIP can then sign up without trouble.

The Marketplace appears to be working okay so far as browsing goes.  However, in terms of signing up, it is a disaster. The information is coming through "garbled, misclassified, or missing."  Until the connections are repaired, submitting an application is worse than useless; it is actively harmful because it often required the applicant to start a whole new account with a new e-mail address.  In short, don't do it until the connection is repaired.  It is this problem that has led to a mere 27,000 people actually signing up for insurance on the federal exchange.  My own estimate is that if this feature had been working properly, the number would be closer to 147,000.

So, when people repairing the site report that it can only handle 20,000 to 30,000 users at a time, about half the intended capacity, do they mean the Hub can only handle that many, or that the Marketplace can only handle that many?  The distinction is crucial because it is the difference between the Marketplace being creaky and problematic, versus the Marketplace not working at all.  It is an important distinction!  One means that it is best to avoid submitting an insurance application during peak hours, or that one may have to submit more than once to get through.  The other says not to submit at all on penalty of having to start a whole new account.*

In the meantime, the recommendation is to create an account, apply for financial assistance, browse, and apply directly with the insurance company.  Here again, federal statistics are revealing.  About 27% of all applicants are eligible for Medicaid or S-CHIP and can sign up without trouble**  About 51% are not eligible for any financial assistance and can sign up with insurance companies directly without trouble.  The real problem is for the 22% buying private insurance, but with a subsidy.  Insurance companies are not able to access federal information, so people buying private insurance with federal subsidies are unable to sign up. And here is where the difference lies.  If 20,000 capacity limit is in the Marketplace, we can ask people who do not qualify for subsidies please to sign up directly with the insurance companies in order to make room on the exchanges, or to wait until they are truly fixed.  Then, if they comply, people who do qualify for subsidies will be able to apply.  But if the limit is still in the Hub, then people who do not qualify for subsidies will have no choice but to sign up directly because no other alternative will work.  People with subsidies will have no alternative at all, except to wait and hope that some day the system gets fixed.

*The statement "The software defects that ware making the Web site unstable with too much volume mean that some people face frozen computer screens when they try to enter information — and then get timeout errors" seems to suggest that the problem is still with the Hub, and that they have not even gotten to the Marketplace problems.  If the federal exchanges have taken 519,561 applications over the first month, that averages about 16,760 per day, well within those limits.  But presumably the number has been rising.

**Indeed, if the 106,000 figure for people signing up does not include people who signed up directly instead of through the exchange, it could well be an underestimate.

How Disastrous is Obamacare, Part II

All right, amid all the claims that Obamacare is toast, let us look at figures released for the first month by the Department of Health and Human Services (HHS) to see just what is going on.  For starters, it is actually somewhat more than a month.  The dates are not October 1 through 31, but October 1 through November 2.  But then again, the system was essentially non-functional the first few days, so maybe adding those extra two may be treated as compensation.  It is also important to remember the goal.  The goal most frequently cited is to enroll 7 million people by the end of March.  But the actual goal is to enroll 7 million people in private insurance by the end of March, with 9 million in Medicaid.  So the total goal is to enroll 16 million people.  Likewise, the figure getting the most attention is that only 106,185 people have actually signed up for private insurance, far short of the goal of 500,000 for the first month.  The again, the total enrolled is about that many counting the number enrolled in Medicaid. But I have not seen the enrollment goals for Medicaid, and how the actual number matches up.

So, to repeat, there are three stages to enrollment.  The first is to create an account.  The government report does not include a statistic on the number of accounts created, and probably just as well.  Many people created accounts out of curiosity, or browse for prices, and others had to create new accounts when the old ones failed.  Creating an account does not, by itself, show an actual commitment to buy insurance.

The next stage is to submit an application for financial assistance.  The total number of applications submitted was 846,184.  Since many of these were for families with more than one member, the number of individuals represented is 1,508,883.  The report boasts that this is 22% of the goal of 7 million people enrolled, but this needs to be severely qualified.  If one counts the goal of enrolling 9 million in Medicaid, it is closer to 9.4%. Even if we round up to 10%, clearly we need to step this up if anything close to the goal is to be achieved. Furthermore, the report does not address how many of the applications are duplicates.  Many failed applications have had to start a new account with a new e-mail.  HHS has apparently sent out 275,000 e-mails asking customers to re-apply.  So the total of actual applications might be closer to 571,000, representing an undetermined number of people.  Nonetheless, lacking anything better to go by, I will assume that all these applications and the people they represent are the correct number.

I wondered whether the government was successfully processing all these applications, and the answer appears to be yes.  Approximately 98%, or 1,477,853 people have been processed.  (We are not told how long the typical processing time is).  Of these 1,081,592 (73%) have been steered to private plans and 396,261 (27%) to Medicaid or S-CHIP. The assumption appears to be that anyone found eligible for those two programs has actually been enrolled. Of the 1,081,592 people eligible for private insurance, only a distinct minority, or 326,130 have been found to be eligible for financial assistance.  That is about 30% of the people sent to private enrollment, and 22% of total applicants.

And now for the figure we have been hearing most about.  Out of the people referred to private insurance, only 106,185, or less than 10% have actually signed up for insurance.  Of these, 79,391 signed up on state exchanges and only 26,794 on the federal exchanges.  As HHS comments, this is about 1.5% of the goal of 7 million.  Meanwhile, although HHS has not said so, the signups for Medicaid and S-CHIP are about 4.4% of the goal.  HHS defends these numbers as not so different that the percentages at similar stages in Romneycare, S-CHIP, and Medicare D.  Romneycare and Medicare D, at least, also had plenty of technical problems at the beginning.  What I am not clear on is to what extent those problems were responsible for slow initial sign-ups in those programs.

There are two reasons why sign-up might be faster for Medicaid/S-CHIP than private insurance.  One is that there are no choices to be made for Medicaid/S-CHIP; one simply signs up and that is all.  The other is the technical problems in connecting to insurance companies to sign up.  The best way to guess to what extent each factor is responsible is to compare the federal exchanges, which are having major technical problems linking to private insurance, with state exchanges, which are working much better.  I do not have any numbers for relative population of people in states running their own exchanges versus states using the federal exchange.  Of 846,184 applications, 61% were from federal exchanges and 39% from state exchanges.  People represented skew a little more toward the federal exchanges, at 66% versus 34%. People actually processed  break down similarly to applications submitted, at 60% federal versus 40% state.  But things change considerably when we get to people signed up.  Out of 396,261 people determined to be eligible for Medicaid/S-CHIP, 212,865, or about 54% of the total were from state with their own exchanges, versus 46% from federal exchanges.  Another way of looking at these applications is that about 36% of all applicants processed were determined to be eligible for Medicaid/S-CHIP on state exchanges, versus 18.5% in federal exchanges.  This may be because many of the states using federal exchanges declined the Medicaid expansion.  But the most spectacular difference is in people eligible for private insurance signed up in federal versus state exchanges.  The 79,381 people signed up for private insurance on state exchanges are 20.9% of those eligible.  The 26,794 eligible in federal exchanges represent a mere 3.8% of those eligible. This difference is presumably the result of defective connections with private insurance companies.*  If the connection worked properly, the federal number would presumably be closer to 146,847 (20.9% of 702,619 people eligible).  In that case, the total number of people signed up for private insurance would be 226,228.  That would be somewhat less than half the goal for this month, and about 3.2% of the goal of 7 million -- behind Medicaid/S-CHIP, but not that far behind.

My ultimate conclusion -- not great, but not as disastrous as conventional wisdom has it. It should be salvageable -- but only if the federal exchange is fixed.

*If there has been double-counting of some applications on the federal exchanges, this could account for some of the discrepancy as well.

Sunday, November 10, 2013

The Republican Dilemma on Obamacare

Actually, there are several.  To take the simplest, what are Republicans to make of all these stories about how badly it is going.  After all, it is a Republican article of faith the the media have a hopeless liberal bias and would never speak an ill word about Obama.  And now they are doing it.  This one is a relatively easy dilemma to overcome.  You simply conclude that the exchanges are so disastrous that eventheliberalmedia can't ignore them, and that if eventheliberalmedia are reporting problems with Obamacare, think how much worse reality must be.  Actually, this shows media bias, all right, but of a different sort.  In particular, it shows a bias toward bad news.  People signing up and everything going well just isn't much of a story.

Next problem:  What to do about it.  Yes, it is tempting to gloat over the failed exchanges, but to actually get indignant that the exchanges are not working well is to suggest that you want them to work well.  Cancelled policies and increased rates fit well with the narrative of Obamacare being a disaster.  Exchanges working badly makes it sound like a basically good idea, badly executed.  And if you get too indignant over exchanges not working it leaves another, obvious problem -- what if they do start working.  Then what will  you do?

And then there are the opponents trying to convince healthy young people not to sign up so as to induce a death spiral.  Yes, there are some who warn that the death spiral is inevitable, but plenty of others don't see it as quite so inevitable that they are doing their best to bring it about.  In effect, they are urging young people not to buy health insurance so we can bring the whole system crashing down, and all those older and sicker people will lose their health insurance.  Hurray!  Wait a minute, why did we want all those older and sicker people to lose their health insurance?  My guess is that most people wanting to crash the system haven't thought that far ahead and just want to get at Obama.  Nonetheless, there are three sort of coherent answers:
  1. The simply oppose all state-mandated systems of redistribution, in this case, from the healthy to the sick.  They want to keep the healthy from being "enslaved" by the sick (i.e., subsidizing them).  That it will induce a death spiral is an entirely unintended side effect.  Except that enough people have made perfectly clear that they are, indeed, deliberately trying to create a death spiral that this argument is just not convincing.
  2. They want to avoid all state-mandated redistribution and keep the healthy from being "enslaved" by the sick.  That the sick will lose their coverage as a result is simply not a legitimate public policy concern.  Only ensuring that there is no state-mandated redistribution is a legitimate public policy concern.  The need of any potential recipients is not.  But once again, deliberately seeking to engineer a death spiral certainly makes it seem like you want beneficiaries to lose their health insurance.
  3. People who didn't get health insurance when they were young and healthy have behaved irresponsibly and should suffer the consequences of their bad decisions.  Well, this at least explains why you want people to lose their health insurance, but it has other problems.  In particular, it means encouraging people who are not young and healthy to engage in irresponsible behavior for which they, too, will eventually have to suffer consequences.  Encouraging other people to be irresponsible doesn't seem very responsible to me.  I suppose the suffer-the-consequences people would answer that they are all for young people buying health insurance, so long as it is not on the exchanges, but done in some other way that assures it does not subsidize anyone else.
For the most part, though, I think this is driven by blind partisanship more than anything else.

How Disastrous is Obamacare?

The normal description for Obamacare's launch to date is "disastrous."  This refers to two things -- badly malfunctioning software, and individual purchasers seeing their policies canceled and replaced by more expensive ones.  Yes public opinion on Obamacare either remains unchanged or has shifted slightly in favor of it.

I would say these things are related.  In some ways, the start up problems may even have been a public relations advantage.  After hearing vague, horrifying rumors about Obamacare, the latest stories are changing it from a mysterious menace to something more concrete -- a website for the uninsured to buy insurance that isn't working very well.  Most people's reaction to a website for the uninsured to buy insurance will presumably be that it is good if it works and bad if it doesn't work.  As for people seeing their policies cancelled, many if not most will be able to do comparably well on the website, if only it works.  People who are able to replace their policies with a perfectly good alternative on the exchange will presumably forgive the inconvenience of having their policies cancelled.  But if the site does not start working, they will not forgive.

Anecdotes are flying madly about.  I will give my own.  When I signed on as early as October 12, the site was sluggish.  Each question I answered was followed a most annoying delay.  The delays were long enough that I got tired of watching the revolving circle and played a round of solitaire.  When I got back from the solitaire, it had always completed its work.  Other than its sluggishness, it was not too different from completing any other long internet application.  But I did not reach the point of applying for subsidies, mostly because my financial future was too uncertain.  I do not know what would have happened if I had applied. It has gone faster on more recent visits, but I still have not known enough about my future to see if I qualify for a subsidy (probably not).

But an anecdote is just that -- one person's experience.  The government hopes to sign up 7.5 million people. What matters out of so large a number are the statistics.  What do they tell us?  So far as I can tell, nothing very encouraging.

There are several stages of applying.  One is to create an account.  (That was as far as I got).  The next is to determine one's eligibility for a subsidy and apply for one.  Next, one chooses an insurance plan and submits an application to the insurance company.  Finally, one makes an initial payment and is formally enrolled.  Not everyone who takes one step necessarily decides to take the next.  Some people may open accounts but not apply for subsidies.  Some may apply for subsidies but decide not to enroll.  This was especially a problem earlier on when people could not anonymously browse for rates, but had to create an account just to look at them.  The system has since been modified to allow window shopping without an account.*

The latest statistical account I have seen was for October 25. It reported a 90% success rate in creating accounts, but only a 30% success rate in "completing an application."  "Completing an application" means determining eligibility for subsidies.  I am not clear whether this means getting the subsidies approved, or merely calculated.  Clearly a 90% success rate is nowhere close to acceptable (it means failure 10% of the time, which is much to high), but it can be reasonably described as functional.  A 30% success rate means at least three attempts before it works, which can't really be described as functional, but is in the category of seriously dysfunctional, rather than completely non-functional.  The number of "applications completed" in the sense of applications for subsidies on October 25 was 700,000, about half of them through federal exchanges.  Assuming another 50,000 in the last six days of October (not an unrealistic number given the general rate they were coming in) and the applications completed would be about 10% of the goal in the first month out of six, or about 60% of the way there.  That is less than one might hope for but not disastrous.

What is disastrous is the "back end," i.e., connection between the exchange and insurance companies.  So far as I can tell, that portion is truly non-functional.  The information coming in is so bad that companies are resorting to hand processing, which, of course, cannot handle anything close to the volume hoped for.  The number of people actually signed up is negligible.  This is what the government hopes to have fixed by the end of November.  I do not know enough about tech to know either (1) whether that is in any way realistic, or (2) what sort of error rate the system can tolerate and be considered functional.  Stay tuned.

I will note one slightly encouraging thing I learned.  My impression was that the December 15 deadline was the deadline to get insurance in 2014, and that any insurance purchased after that date would merely avoid the fine and would not actually take effect until 2015. I did not see the point.  People who sign up don't just want to avoid a fine; they want actual insurance.  But apparently I was wrong.  Applications must be submitted by December 15 to get insurance on January 1, 2014.  Sign-ups after that date will provide insurance in 2014; there will merely be a two to six week delay.  But this could be truly disastrous for the sickest people of all -- ones in "high risk pools" set to be cancelled at the start of next year when the new insurance is supposed to take effect.  These are people who can't afford even a few weeks lapse in coverage.  Which makes me wonder.  Even assuming the best, and that everything is perfect by November 30, just how much volume can the system handle in those 15 days?  Can it truly sign up everyone in a high risk pool in that amount of time?  Really, we should be working frantically to extent the high risk pools, just to be sure.

Finally, a bit of supposedly good news from Kentucky, the state with the best functioning exchange, actually strikes me as discouraging.  The governor boasts that they are signing up 1000 people a day, and the first month statistic bear that out.  Signing up 1000 people a day for the next six months would be a total of 180,000.  Kentucky has 640,000 uninsured.  Signing up 1000 people a day amounts to about 28% of the total -- a significant dent in the number, but well short of a majority.  Even more discouraging are the composition of people signed up.  Of the slightly over 30,000 people signed up in the first month in Kentucky, 27,854 signed up for Medicaid.  Only 4,631 signed up for private insurance.  That does not bode well for the success of the program.

*Although when I tried to browse for New Mexico, it referred me to the New Mexico site, that did not let me browse.