A HANDSOME man told television viewers to pick up their phones and shop. “The phone number…is 1-800-318-2596,” he said on October 21st. “I want to repeat that: 1-800-318-2596.” This was not a microwave salesman, but the president of the United States. Barack Obama urged Americans to buy health insurance by phone, by mail and in person, because the website for his most important domestic reform does not work.
Since Mr Obama’s online health exchanges were launched October 1st, they have been crippled by technical glitches. Mr Obama insists that these will be fixed and that the Affordable Care Act, better known as Obamacare, will succeed. “The product is good. The health insurance that’s being provided is good,” Mr Obama said, repeating this message several times.
But the software problems are bad. Obamacare has survived years of political attacks. Most recently, Republicans shut down the federal government in an attempt to repeal it. Yet it turns out that the biggest threat to health reform is the administration’s own incompetence.
The exchanges are supposed to make shopping for health insurance cheap and easy. So far, they have not. Visitors to healthcare.gov, the federal website that is shoppers’ only option in 36 states, have struggled to create accounts, let alone browse for plans. In the first week, less than 1% of those who visited the website completed an application, according to Complete, a research firm.
The exchange has also sent garbled applications to insurers. Some have received two forms from the same person, or forms with missing data. Others are receiving enrolment notices, then cancellations, then enrolments. It is unclear whether an enrolment followed a cancellation or vice versa, or whether a cancellation was intentional or the result of a computer gremlin.
The 14 states that built their own exchanges seem to be faring better. Washington has seen 16,700 people apply for private insurance. Of these, 4,500 have enrolled in a plan. New York, where more than 150,000 have applied for coverage, has seen about 13,000 enroll. In Minnesota 8,180 people have applied for private insurance, but the state has not given any enrolment forms to insurers. One Minnesotan, believing himself already to be enrolled, called an insurer in the hope of scheduling surgery for January. But the insurer had no record of his application. In all, Mr Obama says that nearly 500,000 applications for insurance have now been filed, but it is unclear how many people have actually enrolled in a plan.
The fiasco infuriates Obamacare’s supporters, including Mr Obama himself. (“Nobody is madder than me,” he said.) Some Democrats blame Republicans. The original idea of Obamacare was that each state would set up its own exchange, but nearly all Republican governors refused. So the Centres for Medicare and Medicaid Services (CMS), part of Mr Obama’s health department, did so on their behalf, hiring a squadron of contractors to help.
Why did they botch it so badly? Politics is partly to blame. In the final months of Mr Obama’s re-election campaign last year, the health department stopped issuing much-needed guidance for the exchanges. (Cynics speculate that Mr Obama wanted to deprive Republicans of information they might have used in attack ads.) This year, when the exchanges were about to open, CMS and Kathleen Sebelius, the health secretary, failed to report any serious problems.
Others, including the Government Accountability Office, were more worried. Insurers feared that the exchanges would not be ready. Many of the biggest decided not to sell plans on them in their first year. Technology executives were amazed at the opaque development of healthcare.gov, led by CGI Federal, a contractor. In Silicon Valley software is tested and re-tested before it is launched. “Contrast that with, no one knows anything about how it’s going, then on the day of the launch you pray?” scoffs one tech executive.
On October 22nd the White House tapped Jeff Zients, an economic adviser, to oversee repairs. It is not clear that the health department knows the full extent of the fixes needed. And it is unclear how long it will all take. On October 23rd officials said that Americans would be allowed an extra six weeks to buy health insurance before facing a fine. They now have until March 31st. It will strike some as unfair if they are obliged to buy something that is nearly impossible to buy.
If the software gremlins are tamed quickly, the fuss will blow over. But if they persist, the whole reform is at risk. Obamacare seeks to expand insurance through a complex web of policies. From next year, insurers will be barred from charging people more because they are already ill. By itself, that rule would bankrupt insurance companies, but it is not alone. All Americans will be required to have insurance, and many will receive subsidies, so revenue from cheap, healthy people will offset the costs of the sick.
But what if young healthy people meet so many glitches on the exchanges that they give up? People with illnesses that are costly to treat will presumably keep trying. That could leave insurers with a sick, expensive pool of patients. To cover their costs, they would have to raise prices. That would dissuade healthy patients from enrolling the next year, driving rates higher still. Such a death spiral could make Obamacare collapse.
For years Republicans have howled about theoretical problems with Mr Obama’s ambitious reforms. Now they can rant about real ones. They are calling for the law to be delayed and Mrs Sebelius fired. She is due to testify before Congress on October 30th. Without anaesthetic.
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