November 12, 2013
Almost no hope for Obamacare fix: panic may be the best option
People who know a lot more than I do about how the insurance industry works and how complex websites work are coming to the conclusion that come January 1st, the current uproar over Obamacare is going to seem like to good old days for Barry, Valerie, and the lesser figures of the Obama administration. There is an excellent chance that millions of families, formerly covered, are going to find themselves without health insurance coverage at all, and with no good options for getting any.
Peter Suderman at Reason outlines several scenarios:
Insurance industry consultant Robert Laszewski, who, thanks to his contacts with his insurers, has been a critical and frequently prophetic source of information about the law's rollout, opened a blog post this weekend with the following assessment: "It is now becoming clear that the Obama administration will not have Health.care.gov fixed by December 1 so hundreds of thousands, or perhaps millions, of people will be able to smoothly enroll by January 1." Laszewski says that months, not weeks, of work remain.
The dates he lists are important, and not only because of the administration's self-imposed deadline of November 30. Anyone who wants to purchase insurance that kicks in at the beginning of next year must complete enrollment by December 15. If the system isn't working smoothly at least a couple weeks prior to that rapidly approaching date, then large numbers of people simply won't have a chance to sign up.
There are no obvious ways in which the promised "administrative fix" could allow people to bypass the faulty, dangerous (very hackable) insurance exchanges:
The administration is looking for workarounds. But the ideas now being floated mostly reveal how bad the potential options are-and how desperate federal officials are for any sort of quick fix.
According to a Washington Post report that ran over the weekend, one of those options would involve relying on the insurers to handle enrollment directly. Right now, health plans can manage most of the application process on their own. But they can't complete all the steps, because they can't connect with the federal government system that determines whether an individual is eligible for government subsidies. Even if they could connect with it directly, it's not clear that the subsidy calculation system is working reliably enough to be useful.
Megan McArdle of Bloomberg, an experienced IT geek, thinks panic may well be in order, because the administration e=refused to put in place contingency plans:
When the tech geeks raised concerns about their ability to deliver the website on time, they are reported to have been told "Failure is not an option." Unfortunately, this is what happens when you say "failure is not an option": You don't develop backup plans, which means that your failure may turn into a disaster.
That disaster includes people denied care, people facing massive rate increases as the pool shrinks to the sickest, people discovering that the best treatments are unavailable to them, and people bankrupted because the coverage they once had is no longer available. And here, according to McArdle, is why the website ain't gonna be fixed anytime soon:
What does the administration have in its pocket to prevent that scenario? Well, there's the obvious: Fix the website. And I'm sure that they're working on that as hard as they can. But as I pointed out at the beginning of October, malfunctioning IT projects aren't susceptible to good old-fashioned remedies like "hard work" or "staffing up." There is a limit to how hard your people can work, particularly if they are doing cognitive work rather than, say, mechanically swapping floppy disks in and out of servers (the jobs I used to reserve for 2 a.m. when I had to work crazy hours). After 10 or 12 or 16 hours, your productivity falls so dramatically that you're better off going home and sleeping -- particularly if you have to do this for more than a couple of nights.
Adding bodies is even more problematic; you have to spend time showing the new people how the system works, and then more time managing all the interactions between the extra people. Think of the difference between trying to arrange girls' night out with a few friends, and trying to throw a sit-down award dinner for 200, and you'll get some idea of the ways in which adding people can actually slow things down rather than speed them up. That's why my expectation all along has been that, no matter how inept they may be, the folks who built the broken system are going to have to be the folks who fix the broken system. Especially if we want to get it working this year.
It's obvious that the American people are going to suffer grievous injury, and that government meddling in health care is going to be discredited. That is both an opportunity and a peril for the GOP. There are lots of good approaches, most involving medical savings accounts(MSAs) and catastrophic insurance, with government grants and subsidies for poor people in the early years, until they build up a balance in the MSAs. The basic principle is administrative streamlining, putting the patient in charge of deciding how to spend the money on routine health care decisions. John McCain actually had such a plan in 2008, and Dr. Ben Carson today is advancing such a plan.
Obamacare obviously can't be fixed, and this will become clear to more and more people as time and horrible consequences advance. Clearly, Obama would veto an outright repeal, even if it were to pass the Senate thanks to panicking Democrat Senators up for re-election in 2014. A vote to override would require 67 votes in the Senate. Impossible? Probably. But it would fascinating to see how Democrat senators would react.