September 26, 2013

ONE OF OBAMACARE’S WEAKEST LINKS: Information Technology.

During the design and passage of the Affordable Care Act, its architects and supporters described a fantastic new system for buying insurance. You would go onto a website and enter some simple information about yourself. The computer system would fetch data about you from various places — it would verify income with the Internal Revenue Service, check with the Department of Homeland Security to ensure that you were a citizen or legal resident, and tap a database of employer coverage to make sure that you were not already being offered affordable coverage (defined as 9.5 percent of your income or less) by your employer. Provided you passed all those tests, it would calculate what subsidies you were eligible for, and then apply that discount automatically to the hundreds of possible policies being offered on the exchange. You would see the neatly listed prices and choose one, buying it as easily as you buy an airline ticket on Travelocity.

Before I went to business school, I used to work in an IT consultancy, and setting up this system sounded like an enormous job to me — a five- to eight-year job, given government procurement rules, not a three-year rush special. But Obamacare’s stewards seemed very confident, so I assumed that they must have it covered.

As time wore on, the administration has steadily stripped major components out of the exchanges and the data hub behind them as it became clear that they couldn’t possibly make the Oct. 1 deadline when all of this was supposed to be ready. The employer mandate was delayed, and then it was announced that at least some of the exchanges would be relying on self-reporting of income, rather than verifying with the IRS. . . .

How did we get to this point? The exchanges were the core selling point of Obamacare. (The Medicaid expansion was actually a bigger part of the coverage expansion, at least until the Supreme Court ruled that the administration couldn’t force states to take part, but it tended to be downplayed, because no one’s exactly a huge fan of Medicaid.) They were going to introduce competition to a fragmented and distorted marketplace, and make it easy for middle-class people to buy affordable coverage from a bevy of insurers. How can it be that one week before the deadline for opening, no one’s really sure the exchanges are going to work?

The country’s in the very best of hands. Plus, from the comments:

If Obamacare were merely an IT project I wouldn’t think twice about it. I would take it in a heartbeat over what Obamacare actually is.

Obamacare is not about the exchanges and I’m stunned that you would say that it is. Obamacare is a five-fold reentrenchment of the insane health care payment system that we have somehow allowed to evolve from its origins as a wretched socialist mistake made in the 1940s by the wretched socialist FDR administration attempting to put price caps on salaries.

Obamacare is a giant leap forward on the path of more bureaucracy, less choice, worse quality, and higher cost. It continues removing decisions from consumers and providers and placing them with third parties. It makes health care decisions even more contingent upon rulings by the IRS (THE IRS!!!) than they already were – and the fact that our health care financing system is largely overseen by our tax collection agency should be absurd on its face, and yet Obamacare doubles down on this absurdity.

If it were all about the exchanges I’d be ECSTATIC. Write the specs then take bids from Amazon and IBM and Raytheon and call it a day. It’d be full of problems but it would work eventually.

What we have instead will never work, even if the exchanges someday do. What we have instead will only serve to make things worse.

Amazing that this dumb law, and huge financial costs for the nation, ultimately stem from FDR’s dumb wartime wage controls, but in fact that’s correct.

UPDATE: A reader emails:

Glenn, first off, please do not use my name if you choose to mention anything I say in this email.

I work for one of the largest Telecom providers in the country. I’m an engineer who designs dedicated data links (DS3s, OC3s, etc…) for major companies across the US.

For background, some of these circuits can be put up fairly quickly, but not the ones that I work on. The ones I design can take up to 90 business days to install.

Anyways, a few weeks ago, we got deluged with orders for circuits that needed to be installed by October 1st. These were circuits to support Obamacare.

Needless to say, they aren’t going to make that deadline. Some of the circuits are being held up due to construction builds that won’t be complete until the end of November. The others won’t make the deadline due to the complexity and the number of various companies involved.

The customer is basically screaming and escalating but because they requested the orders so late, there isn’t much that can be done.

I can only imagine that this same scenario is playing out with other Telecom companies in the United States.

The country’s in the very best of hands.

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