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.

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