What’s the Deal with the Exchanges?
Whether it is a website or a retail store, good marketing requires focusing on the product you are trying to sell. You feature it in the window display, whether that is a physical window or a digital one.
If you are selling cars, you put the shiny new model in the window, with banners talking about the features your target market most desires ― comfort, speed, economy, sex appeal. You let people test drive it so they will fall in love with it.
If you are trying to sell health insurance, you promote the most popular features of the insurance and let the buyers browse around the different models until they find the one that is just right for them.
That’s how eHealthinsurance.com does it. They put very few obstacles between the buyer and the browsing. All you have to do is enter your zip code to find out what is available in your area and the world of choices opens up. You can see what the benefits and costs will be. Only after you have made your selection do you have to start filling out the paperwork.
That is not how the ObamaCare exchanges operate. You can’t see any actual insurance plans until you first fill out a whole lot of paperwork. Even Kentucky, the state with the best performance so far, requires you to complete a form including your name, address, phone number, and social security number, which must then be verified by “public records and consumer credit information.”
So, what is it they are selling? Apparently not health insurance or they wouldn’t make it so difficult to see what you might want to buy. No, what they are selling is dependency. The priority is to determine whether you will be eligible for a subsidy. All this information is required of everyone ― even the large number of people who aren’t interested in or qualified to receive a subsidy.
This is completely backwards. People are unlikely to go through all these applications until they have a pretty good idea of what it is they are applying for. It is like being expected to fill out an application for a car loan without having any idea of the cars that are available.
Plus, many of the web site visitors aren’t potential buyers at all. They may be reporters, or researchers, or just the public curious to see how its tax dollars are being spent. All are required to fill out the same forms before they can see any actual insurance products.
Once the paperwork is filled out, a whole bunch of extremely technical and complex transaction take place on the server. These are invisible to the user but IT experts are boggled by the complexity.
Reuters reports –
Five outside technology experts interviewed by Reuters, however, say they believe flaws in system architecture, not traffic alone, contributed to the problems.
For instance, when a user tries to create an account on HealthCare.gov, which serves insurance exchanges in 36 states, it prompts the computer to load an unusually large amount of files and software, overwhelming the browser, experts said.
If they are right, then just bringing more servers online, as officials say they are doing, will not fix the site.
“Adding capacity sounds great until you realize that if you didn’t design it right that won’t help,” said Bill Curtis, chief scientist at CAST, a software quality analysis firm, and director of the Consortium for IT Software Quality. “The architecture of the software may limit how much you can add on to it. I suspect they’ll have to reconfigure a lot of it.”
It adds –
One possible cause of the problems is that hitting “apply” on HealthCare.gov causes 92 separate files, plug-ins and other mammoth swarms of data to stream between the user’s computer and the servers powering the government website, said Matthew Hancock, an independent expert in website design.
Now, all of this might be much less of a problem if only serious buyers were subject to it ― people who had already found the product they wanted to buy and were now eager to get enrolled. As it is, it all applies to anyone who is curious about the products and prices being offered by the Exchanges.
It makes you wonder why the government wants to make it so hard to see those products and prices. I live in Pennsylvania and still don’t have the slightest idea which insurance companies are participating here, what benefits they are offering, or how much they are charging. For months now CMS has refused to disclose that sort of information, telling us to wait until the Exchanges are on-line. Now the Exchanges are up (supposedly), and we still can’t find out.
Welcome to the world of “the most transparent administration in history.”
You’re not telling me the government designed something inefficient…
Perish the thought!
“One possible cause of the problems is that hitting “apply” on HealthCare.gov causes 92 separate files, plug-ins and other mammoth swarms of data to stream between the user’s computer and the servers powering the government website, said Matthew Hancock, an independent expert in website design.”
What could be the point of all of that?
NSA
Improper design is one thought, or the information is going to places not yet revealed.
Probably a mixture of both.
I seriously doubt they’d put something in there that wasn’t necessary.
The whole thing is unnecessary, but they did it anyway.
“So, what is it they are selling? Apparently not health insurance or they wouldn’t make it so difficult to see what you might want to buy. No, what they are selling is dependency.”
At which point the American people will no longer be able to operate without the government.
Big Brother, 1984, here we come!!!
“People are unlikely to go through all these applications until they have a pretty good idea of what it is they are applying for.”
Exactly.
“They may be reporters, or researchers, or just the public curious to see how its tax dollars are being spent.”
This too. It’s like being asked to sign up for a dating site before they tell you if there is anyone else from your area on it. Not that I would know about those things…
‘…which must then be verified by “public records and consumer credit information.”’
Who does the verifying? Us or the government? Is this another “Send us a photocopy of your driver’s license” type thing?
Every system is perfectly designed for the outcomes achieved. Confusion, anger, dependency,….single payer
I kind of hate to defend the ACA, but Esurance never had to pay the slightest attention to the family incomes or employment status of their customers. Either they could pay the posted premiums or they couldn’t.
In addition — no federal program involving individualized subsidies have ever tried to grant the subsidies on line before. Applying for Medicaid has historically been done in person at a desk and takes a lot of time.
Finally,it is not uncommon in the private sector to gather a lot of personal data early on from visitors to a website.
That being said, the actual product offerings should be on a different and much simpler web page.
This is actually very simple. The Obama administration doesn’t want to show you the premium without having the subsidy figure readily available because you will be shocked by how much the premiums are actually going to be (despite this being the “Affordable Care Act”). Why are the premiums so much? John’s been doing a good job of covering this in the blog, but short answer is the mandated “essential” health benefits blow the premium sky high.
I’m currently on a high-deductible HSA plan and pay about $580 a month for a family of four. This is a pretty bare bones plan, no Rx coverage, but my wife and I only pay about $10 per 90 day supply for each the few generic drugs we’re on through the Costco pharmacy (try getting that deal even in a “premium” health plan). Preventive visits are covered fully and our annual total out-of-pocket is limited to about $12K.
Under Obamacare, our equivalent bronze health plan in the same network, with all the “essential” health benefits we don’t need, is going to cost us $900 per month, a 55% increase. And I get:
– $2,500 increase in my deductible
– $600 increase in my annual OOP limit
– Rx drug coverage (see above)
– Maternity coverage (like I’m going to have another kid with a vasectomy)
– “Chronic disease management”; doing just fine managing my own hypertension, thank you
– Pediatric dental & vision coverage; we’d actually use this, but an extra $320 a month in premiums will buy me a lot of dental exams and glasses that I now pay myself (with a cash discount)
I don’t qualify for a subsidy. How do higher premiums, higher deductible, and higher annual OOP make my health care more “affordable”?
I am seeing this phenomenon a lot, based on my reading of blogs around the country.
A high deductible plan in the ACA costs more and delivers less than similar plans now for sale in the individual market.
I am curious as to the reasons for this.
I think the main reason is guaranteed issue, not just the mandates in the ACA policies. Insurers in the ACA must account for a lot of unhealthy people.
The Einsurance policies of the past could exclude the unhealthy. Also the Einsurance policies could have a larger age rating. People over about age 58 were priced pretty brutally in the individual market.
Comments are welcome as to whether I am right.
Bob,
You have a point, but I think it is a bit more. Carriers on the exchange have absolutely no way to anticipate the risks they will attract. They are forbidden from asking any health questions. Without knowing the risks, it is impossible to set premiums accurately. They are groping in the dark.
Now if they guess too high (set premiums higher than they will need) they have to rebate some of the money a year later. But if they guess too low there is no way to recoup the losses. They are far better off guessing high, having use of the money for a year, and rebating it later on.
The Administration will tout these rebates as a victory for consumers — “look at all the money we have saved you.” But its not a victory for anyone. It is another dysfunction of a poorly designed system.
Another consequence, of course, will be that many fewer people sign up for coverage, and the ones that do will be those who REALLY need it. So the lack of accuracy will create the selection problems everyone fears.
Thanks Greg.
There is supposed to be a large reinsurance fund to help any carriers who do guess wrong on their first premium offerings. I hope it is not another Obama urban legend.
(Such funds are common in countries that libertarians actually like, Holland and Switzerland et al.)
I have yet to see a risk sharing program that actually works, Bob. You cite Switzerland. Maybe, but that country has a mere 8 million people, all concentrated in a small area and ethnically similar. These comparisons are not of much value here.