Dan Diamond, Managing Editor
The Affordable Care Act’s new insurance exchanges launched on Tuesday, and the news dominated the health care landscape for the rest of the week.
And the media's reception was…well, less than enthusiastic. Here's a day-by-day summary, drawn from the increasingly pessimistic headlines.
- Tuesday: "ACA exchanges open with heavy traffic, site crashes."
- Wednesday: "California exchange overstated its Web traffic for Obamacare launch." (Or did it?)
- Thursday: "The White House says people have bought Obamacare. We haven’t met them quite yet."
There’s an obvious lesson here—and it isn't that the exchanges are a failure. We just don't know crucial pieces of data yet: The total number of applicants, what the new risk pool looks like, even some of the rates that providers will get paid.
Rather, a clear takeaway is that this is a fluid, ever-changing story. And while it’s tempting to use the websites’ many glitches as a reason to write off their big debut, the exchanges' success or failure won't be defined after a week, or even a month.
So what can we conclude about the ACA’s marketplaces, 100 hours into the healthcare.gov-era? I polled the Advisory Board’s experts and a few other observers. Here’s what they said.
1. The IT problems turned out to be real. And they could be a real deterrent
After months of speculation, it turned out that warnings about incomplete verification systems and untested websites were right.
In most states, the Obamacare marketplaces were a failure to launch.
But most experts agreed that bumps were to be expected, given the exchanges' complexity and scope. "I wasn’t at all [shocked] that there were glitches and hiccups," Larry Levitt of the Kaiser Family Foundation told me. "It would have been surprising if there weren't technical glitches in the launch of the health exchanges," agreed Chas Roades, the Advisory Board's Chief Research Officer.
"This surely ranks as one of the largest health IT projects the federal government has ever undertaken."
Many of the problems centered on healthcare.gov, the nexus for the 36 states that opted not to field their own insurance exchanges or asked the federal government to take on some operational responsibility.
And that's why it’s worth a reminder: When the ACA was passed, federal officials didn’t plan to run health insurance exchanges for 36 states—let alone any state. The conventional wisdom was that Democrats who supported the Affordable Care Act would welcome new tools and funds to expand health coverage, while Republican governors who believed in states’ rights would want the responsibility of running an exchange too.
But state lawmakers wavered on the cost and complexity of operating the new marketplaces, and the list of who would be responsible for operating which exchanges wasn’t finalized until less than a year ago. That created a huge time crunch, especially given the unparalleled challenges in coordinating the systems.
Don't judge the exchanges' fate too soon: Join us for a conversation on November 15 as our experts perform a pulse check on Obamacare.
Ultimately, the glitches may not mean much if the exchange software is quickly fixed; the enrollment process for next year runs through March, and the White House could probably extend it if necessary.
However, every day that the websites remain glitchy is another day when the most motivated customers—who are disproportionately older, sicker, and traditionally more difficult to insure—make the extra effort to seek out coverage, either by waiting through the exchanges' glitches or applying offline. And it's another day that the younger and healthier Americans who don't need insurance as much—but who the White House needs to balance the risk pool and keep premiums down—are likely to be deterred from signing up.
2. We might not know enrollment numbers for some time
Federal officials keep touting the robust Web traffic numbers to healthcare.gov, but refuse to release total enrollment figures—even though reporters have increasingly clamored for data.
One reason for the reticence might be that the number of enrollees is probably quite small, partly because of the websites' problems. "I'd characterize the enrollments as a trickle rather than a wave at this early stage," one Cigna executive told the Wall Street Journal’s Christopher Weaver.
But despite the building pressure on HHS to reveal how many people have signed up for coverage through the federal exchanges, it’s hard to find a precedent for the agency offering near real-time enrollment data.
Keep in mind that when Medicare Part D began enrollment on Nov. 15, 2005, HHS didn’t release any enrollment figures until Dec. 22, 2005—five weeks later.
That was a different time, certainly, with a much slower news cycle. But while some experts believe that the current media pressure will force federal officials’ hand, one industry analyst suggested that there’s no compelling reason for HHS to abandon its plan of releasing data at some point in November.
And with government staffers already stretched thin because of the shutdown—even Freedom of Information Act (FOIA) requests have been put on hold—there’s even more reason for HHS staffers to hunker down and ride out the media storm.
3. Other big changes in health care got completely overlooked
Even within the health care industry, the exchange launch eclipsed all other news, blotting out nearly every other story this week.
However, Daily Briefing readers know—right?—that October 1 was the start of a new fiscal year. That meant that several major changes to how providers get paid—readmissions penalties ticked up, Medicare revised its value-based purchasing (VBP) methodology, and Medicaid cut $500 million in disproportionate share hospital (DSH) payments—went into effect on Tuesday.
And in the short-term, some of those provisions carry considerable weight over whether the ACA will achieve its promise of making care more affordable, by pushing providers to become more efficient and focus on value-based care.
"High deductibles, narrow networks, reduced pricing—all of these will be trends to watch for providers in the months ahead."
4. What providers should be watching: Deductibles and networks
There's much more to focus on than the website errors, observers agreed. And many industry analysts are now pouring through the rates and plans offered in the federal exchanges, trying to answer new questions on coverage and affordability.
"What matters for providers isn't this week's stories of slow websites and computer glitches," Roades said. "Ultimately all of that will get sorted out."
“The big questions for providers are, who will buy insurance once the exchanges are working?” he added. “And what impact will the exchanges have on pricing and benefit levels across the entire universe of commercial insurance plans?”
“High deductibles, narrow networks, reduced pricing—all of these will be trends to watch for providers in the months ahead.”