Obamacare Website Failure Threatens Health Coverage For Millions Of Americans

Here's What An Obamacare Train Wreck Looks Like

A broken website imperils the largest expansion of the American safety net since the Great Society.

More than two weeks into the disastrous rollout of HealthCare.gov, the website created by President Barack Obama's health care reform law still isn't working right.

"The website that was supposed to do this all in a seamless way has had way more glitches than I think are acceptable," Obama said during a Tuesday interview with KCCI television in Des Moines, Iowa. But the administration won't disclose exactly what's wrong with the health insurance exchange website, or when consumers can expect to see the promise of convenient, one-stop shopping for health benefits and financial assistance fulfilled.

Time remains for these problems to be resolved, but not much. "If things aren't resolved in three weeks, we've got some serious, serious problems," said Timothy Jost, a law professor and health care reform expert at Washington & Lee University in Lexington, Va., and an Obamacare supporter. "I don't think we're anywhere close to there yet, but if the whole thing collapses, it'll be another generation before we get this problem fixed."

The White House vowed to fix the problem and said people are managing to sign up for health care. "The website is unacceptable, but we're working to improve it and the product is good," said White House official Tara McGuinness. "Across the country people today are getting access to affordable care. We're going to work intensely for the next six months to make sure we meet the demand. We're going to make affordable health care accessible through the website, through the phone, in communities across the country, and with in-person assistance."

The stakes are high for uninsured people, individuals and families who buy their health insurance directly and the entire health care industry. Without a functioning health insurance exchange, many people too sick or too poor to get health insurance under the old rules will remain shut out of the system. The millions of Americans who already buy their own insurance will face major disruptions. Health insurance companies could experience a nightmare scenario where the bulk of the individuals who brave the frustrating sign-up process are those who are sick, desperate for coverage and expensive to treat.

And anyone who isn't able to get coverage because of the exchanges' problems could confront the prospect of tax penalties through no fault of their own.

For Obama and the Democrats who've stood behind Obamacare during four years of relentless attacks from Republicans -- including a face-off that led to a 16-day government shutdown and a threat of U.S. default -- failure of this magnitude would discredit a core premise of this presidency, that government can do big things to improve Americans' lives.

Although there are signs of incremental improvement, HealthCare.gov is unable to reliably allow consumers to create accounts, verify their identifies, apply for tax credits available to low- and middle-income people or shop for health insurance plans. Insurers are receiving bad enrollment data and states are reporting difficulties in accessing the federal system.

The administration won't say how many people have signed up so far, but its reported goal of enrolling 500,000 people this month appears difficult to reach. Some thousands of dogged shoppers appear to have signed up for plans on the federal health insurance exchanges, also called marketplaces. But others have become discouraged, and traffic to HealthCare.gov has waned, according to one independent analysis. People working to help consumers are using paper applications for financial assistance that eventually will have to be entered into the computer system.

If the administration does succeed in getting the website in working order in the coming weeks, the system will be strained by a backlog of pending applications and a crush of consumers frantically trying to get their coverage in place before the new year.

Consumers have until Dec. 15 to choose a plan for Jan. 1, and until Feb. 15 to avoid being hit with tax penalties for violating the law's mandate that individuals obtain health insurance. The 2014 enrollment period ends March 31.

The administration insists it's doing everything it can to get HealthCare.gov into shape. In states operating their own health insurance exchanges, a small but growing number of people are signing up.

"We really do need to get this thing resolved pretty quickly. And then, of course, the longer you wait to resolve it, the more you have piling up for the last minute with the risk of another crash," Jost said.

Robert Laszewski, a health care industry consultant, is skeptical that the health insurance exchanges' information technology failings can be mitigated in time to prevent chaos. "The fix might be to take it down and start over," he said. "I don't know what the best-case scenario for these guys fixing this thing is, but it's got to be two or three weeks, minimum."

The urgency is underscored not only by the fact that the low-income Americans and the 48 million uninsured -- those whom the law was primarily intended to benefit -- won't get the help they were promised. There's also the plight of those who currently have coverage they bought themselves that now has to be replaced, said Laszewski, who is president of Alexandria, Va.-based Health Policy and Strategy Associates. That represents about 3.6 percent of the population, according to census data.

Many health insurance products currently on the market don't meet Obamacare's benefit standards and consumer protections so they are being discontinued. Consumers with these plans are the most likely to see rate increases next year, especially if they earn too much to get tax credits. "They've got to convert to a new policy -- no ifs, ands or buts about it," Laszewski said.

And while people who currently pay for their own health insurance are likely to do whatever they can to remain covered, buying a plan directly from an insurance carrier or using a private online broker isn't what Obamacare promised, and tax-credit subsidies aren't available without the federal system. Moreover, these private companies aren't prepared to deal with millions of customers who were supposed to be using the government marketplace, Laszewski said.

Under these circumstances, the lion's share of the people who do whatever is necessary to sign up through HealthCare.gov are likely to be the sickest and most expensive to cover because they have the greatest need, Laszewski said. That would make the pool of people covered very costly, causing health insurers to lose money and likely rethink whether they want to participate in the exchanges, he said. "The fundamental threat to Obamacare is we don't get enough healthy people in the pool to keep the rates reasonable, and they are in grave danger of that problem," he said.

If these problems persist longer -- weeks, months, a whole year -- the entire Obamacare project falls apart, Laszewski said: "It's a holy shit moment."

This article has been updated to include White House comments.

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