With Nov. 1 storming toward us and the health insurance exchanges still not working, we face the daunting possibility that people may not be able to sign up for January, or maybe even for 2014. The possibility of a total breakdown -- the dreaded insurance death spiral -- is heading straight for us. The “wait and see if they can’t get it together” option no longer seems viable; we have to acknowledge that these problems are much more than little glitches, and figure out what to do about them.
Most of what seems to be on the table ranges from not helpful to actively unhelpful. Here are seven popular “solutions” that don’t solve anything and may make things worse.
1. Denial: As we move into our fourth week of nonfunctioning exchanges, the administration’s communications strategy puts me in mind of a real estate agent who once showed me a basement apartment near Dupont Circle. It was admirably cheap -- probably because in most of the apartment, the ceiling was exactly 74 inches from the ground. And how do I know exactly? Because I am exactly 74 inches tall, and my head was brushing the ceiling. The real estate agent looked straight at me and said, “Isn’t it wonderful? You don’t often get these tall ceilings in a basement apartment.” This sort of thing works for Obi-Wan Kenobi, waving his fingers at Imperial Storm Troopers and saying, “These are not the droids you’re looking for.” But he had the Force; President Barack Obama only has Jay Carney. For those of us who are not Jedi warriors, refusing to admit it when something has gone wrong usually makes the problem worse, not better. Once people understand that you’re willing to lie to them about how well things are going, you lose a lot of the support that you’ll need to fix the mess you’ve made.
2. Blamestorming: That’s a term from my upcoming book, and it describes the tendency of an organization in which things have gone wrong to waste a lot of time looking for a scapegoat rather than, say, fixing the problem. Republicans are having a field day denouncing the fecklessness of the administration’s decision-making, and in fairness, it seems to have been extraordinarily bad: Did end-to-end testing of the exchanges really not start until Sept. 26? Democrats, meanwhile, are oscillating between blaming Republicans for not implementing the law for them and the contractors for writing bad code. Maybe the contractors did screw up. But the focus on them suggests that the administration is spending too much time in meetings and anonymous press interviews screaming “not it!” instead of working with contractors to repair computer code.
3. Firing Kathleen Sebelius: I haven’t been particularly kind to Kathleen Sebelius over the years, and I’m not a huge fan of the direction in which she has taken the Department of Health and Human Services, or her expressed views on the market for health insurance. Yet although aspects of this failure are certainly her fault, I doubt that any other HHS secretary could have pulled off the impossible task that the law demanded. Firing Sebelius is not going to make the system overhaul proceed any faster. Instead, it will add managerial uncertainty and a power vacuum at the top to the overwhelming issues that the Affordable Care Act already faces.
4. Bringing in “the Best and the Brightest”: The White House's use of this phrase to describe the outside help they were soliciting was unfortunate, since it was originally coined by an author describing how very smart, motivated idealists got us into a decade-plus quagmire in Vietnam. Also unfortunate, however, is the idea that the White House was trying to convey. Even if you could somehow assemble a dream team of crack developers and tech managers, and parachute them in to take over this operation, that wouldn’t magically enable the administration to fix this malfunctioning site by Nov. 15. In fact, it would pretty much ensure that the site didn’t get fixed in time. The new team would have to spend weeks figuring out how the site was put together, and who did what, and who they needed to talk to in order to purchase office supplies. And a developer friend, meditating on his brief experience as a consultant, points out that they would have to get all that information from people who in effect just received the following message: “You all suck, and we're bringing in more expensive, better people to fix your crap. Please help them succeed."
While outsiders may be valuable for small, concrete tasks and a fresh take on particularly tough problems, they can’t just come in and fix everything. If the contractors and HHS managers who built the federal exchange can’t fix it in the next month, then it’s just not going to get fixed in the next month. Or as the same developer friend put it: “Ramping up new people in a month? Hahahaha.”
5. Moving to phone and paper applications: Let’s not forget why all of this is so urgent. Broken exchanges threaten the stability of the whole market for individual insurance. If the problem were just that people might miss out on the opportunity to buy insurance, well, that would be sad, but we’d just be talking about a slight delay. In yesterday’s speech, the president kept saying that the website isn’t the product, insurance is the product and that product is good. That’s not really true. Insurance is a special product: Its price and quality are determined largely by the pool of people who apply. If the experience isn’t easy, that pool may skew old, sick and expensive -- which means that premiums will go up next year, by a lot, and the pool will get even older, sicker and more expensive.
Phone center applications seem to be going through the same computer systems with the same problems as the consumer website. There’s a paper alternative, but the call center operator I talked to made it sound ponderous, with multiple steps where you get stuff in the mail and then send it off, in a process that takes five to six weeks. This solves the problem of needy, determined people who can’t get all the way through the website. But unless young and healthy people work their way through the call centers and mail-in forms, the problems in the insurance market will get worse. And ultimately, if prices start to spiral out of control, that’s probably going to make things harder, not easier, for people who need to buy insurance.
6. Delaying the individual mandate: As with the last nonsolution solution, this solves a problem for individuals but destabilizes the insurance market as a whole. If it’s a tedious pain to buy insurance, the only thing standing between us and a death spiral is the fairly hefty penalty that folks who don’t buy it may have to pay. Delaying the individual mandate makes the problems created by the malfunctioning exchanges worse -- which, I reiterate, will ultimately mean more uninsured people, not fewer. This is a terrible idea, which is being seized upon by the administration and Republicans not because it makes any sense, but because it is politically expedient. It is the responsibility of policy analysts and informed voters to stop them before they irreparably damage the market for individual insurance.
7. Extending the open enrollment period: This idea has a number of big problems. For starters, it’s probably not legal. Also, it’s useless without extending the individual mandate: Who wants to find out that they’re liable for both insurance premiums and the penalty for being uninsured? But it would also be very, very bad for the insurance market.
I pointed out a while back that one conservative talking point -- that people can just wait until they get sick, and then buy insurance -- is incorrect. It’s incorrect because we have an open enrollment period: If you get sick in April, you have to wait until next January to get insured again. Oh, you can game it a bit (if you move to a different state, for example, you become eligible to buy insurance outside the open enrollment period). Even so, this provides a pretty powerful incentive to get insured and stay insured: After all, how many people can easily switch states?
But if the open enrollment period is extended, then suddenly it makes total sense to wait, especially if the individual mandate also gets delayed. And who’s most likely to wait? Say it with me: young, healthy people who rarely go to the doctor -- exactly the people we need to get into the system immediately to keep it financially stable.
I’ve had a couple of commenters respond, “Well, why should we care if insurers have a healthy market? They charge too much, for too little.” Leaving aside the editorial commentary on pricing policies, the answer is that we should care not for the sake of insurers, but for the sake of people who buy insurance in the individual market. According to Kaiser, that was about 5 percent of Americans before Obamacare took effect, and we’re expected to add millions more shortly. It matters a lot whether there’s a market where they can buy insurance or if prices have spiraled out of control. It also matters to you, the taxpayer, since the folks who get subsidies to help them buy insurance are ultimately going to stick us with the bill for the excessive cost of their insurance.
I don’t know how to fix the broken programming system. But I do know what sort of “fixes” could make the insurance market break further. If we’re going to delay, then we need to delay the whole thing -- guaranteed issue, community rating and so forth. Otherwise, we’re just asking for, well, a quagmire.
To contact the author on this story:
Megan McArdle at email@example.com