Obamacare Not The First New Program To Have Launch Problems

Nervous Obamacare Supporters Should Know The History Of Social Security

WASHINGTON -- Website problems have plagued the rollout of President Barack Obama's signature health care reform law, imperiling the promise of new health insurance policies for 7 million Americans by the end of next year.

Big problems are not unusual for big, new programs. The technology involved may be different, but previous expansions of the safety net have all suffered glitches. Even Social Security, the first and arguably the most successful federal social program, faced serious challenges before the first monthly retirement checks went out in 1940.

"There was a lot of doubt about whether it was the right thing to do and whether they could do it," Edward Berkowitz, a history professor at George Washington University, said in an interview. "They somehow managed to solve the technical problem."

It wasn't easy. After Congress passed the Social Security Act in 1935, a nascent Social Security Board faced a daunting task: enrolling 26 million industrial workers in less than a year, and another 2.5 million each year after that. One major problem: A lot of people had the same name.

"There were, according to board calculations, hundreds of thousands of workers with the surnames Smith, Jones, Brown, Miller, and dozens of other common family names, all of whose records would have to be kept straight, their wage histories following them through all geographical and job moves," Nancy Altman, co-director of advocacy group Social Security Works, wrote in her 2005 book The Battle for Social Security.

They had no computers, and no precedent for creating such a system. Board Chairman Arthur Altmeyer brought in management expert Harry Hoff, who studied the problem for months before delivering the sad news that it would not be possible.

"He recommended that the board notify Congress that the government could not run the Social Security program, after all," Altman wrote.

Meanwhile, Alf Landon, the Republican nominee for president in 1936, that year called the program a "cruel hoax" and a "fraud on the workingman" that could never live up to its own promises.

The Social Security Board told Hoff to get back to work, and after several more months they devised a numerical system in which the first three digits of enrollees' identification numbers corresponded to their location.

But how to reach the workers? The board turned to the postal system and its 45,000 offices around the country. "Letter carriers delivered applications for numbers, helped people fill out the forms, answered questions about the program, returned the forms to typing centers where the cards could be produced, delivered the cards to the workers, and transmitted the applications of workers together with their newly-assigned Social Security numbers to [headquarters in] Baltimore," Altman wrote.

"By June 30, 1937, the index of workers covered over an acre of floor space and contained what had now grown to about 30 million workers' names and numbers," Altman wrote. "It was so efficient, that, despite its size, a clerk could locate an individual's name and number literally in seconds."

Though Social Security currently faces a financing shortfall that could lead policymakers to trim benefits, the Obama administration would be jubilant if health care reform left a similar legacy. Social Security's supporters today describe it as one of the most successful social programs in the world.

The problems the administration is encountering in getting Obamacare off the ground are inherently different than what FDR encountered in the 1930s. Technologically, the construction of online exchanges is more complex. Moreover, the Affordable Care Act has a shorter lag time between when people sign up and eventually receive benefits -- just a few months.

The bumpy rollout of the federal Supplemental Security Income program in the early 1970s might be the closest parallel for what could go wrong with Obamacare. In 1974, officials estimated 7.2 million would be eligible for the new initiative, which absorbed state welfare programs. But by 1976, only 4.3 million had signed up. (Today the program covers 8.3 million.)

The Social Security Administration had developed a new data acquisition system to transmit information about beneficiaries and claims between headquarters and various field offices. But officials said the system received more queries per day than expected.

"Also, due to computer or power failures, the response system could not provide timely replies," the Government Accountability Office (then known as the General Accounting Office) said in a 1976 report. "This hindered district office employees from completing their work promptly and imposed a longer wait on SSI applicants."

Sound familiar? Berkowitz and fellow historian Larry DeWitt, who have co-authored a book on the SSI program, said in interviews that technology was key to the program's bad start.

"It was a disaster," Berkowitz said. "Maybe one of the morals is that high-tech stuff can fail."

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