Assessing the Exchanges

Over the last few days, I have spoken in some detail about the state of the federal Obamacare exchanges with several officials of the Center for Medicare and Medicaid Services (the HHS agency that is running the exchanges), and with a number of reasonably well placed insurance company officials in Washington. The picture they paint of how the rollout of the exchanges has gone is similar in its broad strokes to what has emerged in other reports in recent days, so I don’t think I’ll be breaking much news here, though some of the details have (I think) not been reported. For what it’s worth, I offer below the basics of what they had to say and some reflections on its implications. This is a long post, with apologies, but I thought some of the particulars would be of interest. 

First, a couple of words of caution: I do not present this as a broad sampling of people involved in the rollout or a comprehensive overview. The CMS people I spoke with are people I know (from having worked on health policy for some time in and out of government), and who in turn know me, which means they know that (unlike all of them) I am an opponent of Obamacare. This may have led them to tell me some particular things and not others, or it may not—I have no way of knowing. The assessment below summarizes conversations with five CMS officials and three insurance-industry insiders, all of which took place on the understanding that I would publish such an overview, without their names attached. (I approached several additional people at CMS who politely declined to discuss the exchanges on these terms.) The CMS officials are all career agency personnel, not political appointees; they are fairly senior people but not so senior as to be routinely privy to political discussions. All are involved in the exchange project in different ways. What they see is the nitty gritty operations of the program. But they are policy and management people, not information-technology experts.

This latter point turns out to be quite important. The reaction of these individuals to what has happened in the last two weeks is the reaction of people who are coming to realize that their expectations and understanding of web development were mistaken. They believed (as I did too, I admit) that whatever technical problems the exchange sites encountered at first could be cleared up quickly and simply once things got going—that the contractors developing the websites could just respond to problems on the fly, as they became apparent. It is now increasingly obvious to them that this is simply not how things work, that building a website like this is a matter of exceedingly complex programming and not “design,” and that the problems that plague the federal exchanges (and some state exchanges) are much more severe and fundamental than anything they imagined possible. That doesn’t mean they can’t be fixed, of course, and perhaps even fixed relatively quickly, but it means that at the very least the opening weeks (and quite possibly months) of the Obamacare exchanges will be very different from what either the administration or its critics expected.  

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