This CBS report is notable not just for the questions it asks, but the manner in which it recaps the disastrous rollout of the biggest big-government project in 50 years. It’s not every day that one sees a major media outlet use a unicorn analogy when reporting on a key Obama administration effort, after all:
No one knows how many people have managed to enroll because the administration refuses to release those numbers, but the website’s launch has been rocky.
Media outlets have struggled to find anyone who’s actually been successful. The Washington Post even illustrated that sought-after person as a unicorn, and USA Today called the launch an “inexcusable mess” and a “nightmare.”
We’ll get back to the USA Today editorial in a moment. Meanwhile, CBS asks — and then answers — the question that Congress will want to ask when the inevitable hearings begin. The White House and HHS had a three-and-a-half-year head start on the insurance exchange rollout. Did anyone in that time bother to test it? CBS’ expert says no, and also kicks out the strut underneath the White House claim that it’s massive traffic that’s caused the problems:
“It wasn’t designed well, it wasn’t implemented well, and it looks like nobody tested it,” said Luke Chung, an online database programmer.
Chung supports the new health care law but said it was not the demand that is crashing the site. He thinks the entire website needs a complete overhaul.
“It’s not even close. It’s not even ready for beta testing for my book. I would be ashamed and embarrassed if my organization delivered something like that,” he said.
I’ve worked on massive database projects in the private sector, and I suspect that Chung is correct. We do know that some testing took place, which is why everyone involved in the project was sending up warning flares for months about its status. HHS and the White House might have rolled it out with full knowledge of its incompetence hoping that they could provide enough assistance to jolly people along, but I don’t think that was the case. The failure caught them flat-footed last Tuesday, and the failure of the weekend retooling effort seemed to do the same. It looks as though no one bothered to actually sit down and try to go from A to Z in the system themselves.
By the way, in one such project in my experience, the company got rid of the program managers when the team didn’t deliver … after eight months. There isn’t a private-sector firm in the world that would have tolerated a web-portal project taking 42 months and delivering this kind of train wreck.
Speaking of which, let’s turn to the editors at USA Today for their take on the situation:
Alas, the administration managed to turn the experience for most of those visitors into a nightmare. Websites crashed, refused to load, or offered bizarre and incomprehensible choices. Even though the system was shut down for repairs over the weekend, Monday’s early reports continued to suggest an epic screw-up. …
Park said the administration expected 50,000 to 60,000 simultaneous users. It got 250,000. Compare that with the similarly rocky debut seven years ago of exchanges to obtain Medicare drug coverage. The Bush administration projected 20,000 simultaneous users and built capacity for 150,000.
That’s the difference between competence and incompetence.
The too-much-demand excuse also is less than the full story. In addition to grossly underestimating demand, the administration and its contractors seem to have made mistakes in building the websites. The system for verifying consumer identity has had persistent problems, as have pull-down menus.
Nor were problems confined to the 36 state health exchanges run by the federal government. Sites run by 14 states and Washington, D.C., bogged down because they have to refer to federal databases to verify consumers’ identity.
Remember, too, that USA Today’s editors support ObamaCare, as the editorial makes clear. But this isn’t even the worst of the collapses in the ACA, as former Bush-era economic adviser Charles Blahous informs readers at Real Clear Markets today. Its financial underpinnings have already begun to crumble:
Another of the ACA’s important financing sources-supposedly delivering $140 billion in revenues over 10 years-was the requirement that employers offer affordable coverage to workers or pay a penalty. But earlier this year the Obama Administration announced it would not enforce this requirement during its statutory implementation year of 2014.
Labor leaders’ recent appeal to expand ACA health exchange subsidies to multi-employer plans is but one example of a cost-escalating dynamic that many of us predicted. As I observed last year, “The ACA creates a horizontal inequity between two hypothetical low-income individuals; one who purchases insurance via an exchange receives a substantial direct federal subsidy, whereas one who receives employer-provided insurance (ESI) does not. This differential treatment could well lead either to the second individual’s moving into the health exchanges (thus increasing participation rates) or to the federal government expanding low-income subsidies to those with ESI (increasing costs).” …
Finally, there are the ACA’s most dubious financing sources. These include a new 3.8 percent “unearned income Medicare contribution” (UIMC) and a new tax on “Cadillac” health insurance plans. The income thresholds for the UIMC are not indexed for inflation, so under law most workers would eventually be subject to the tax-over 80 percent of workers within 75 years, according to the Medicare trustees. Past experience with legislation overriding other non-indexed taxes like the Alternative Minimum Tax (AMT) demonstrate why projections of escalating UIMC revenues should be taken with a hefty grain of salt. So, too, with the so-called “Cadillac plan tax,” designed to hit more and more health insurance plans over time, an outcome that organized labor is determined to prevent.
The problematic nature of the ACA’s finances is such that CBO’s latest “long-term budget outlook” singled out its implementation as one of the biggest sources of future fiscal strains. Through 2038, CBO attributes 35 percent of the cost growth in federal health programs to population aging, 40 percent to general health inflation, and another 26 percent to the implementation of this single law. CBO now projects that merely delaying ACA implementation for one year would save $36 billion.
Maybe we just need more unicorns …
Update: Our good friend Jeryl Bier warned everyone about the problem on September 12th.