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An Inauspicious Debut

The health exchange meltdowns are not just ‘glitches.’

Oct 21, 2013, Vol. 19, No. 07 • By MICHAEL ASTRUE
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For over a year it has been common knowledge within the Obama administration that the Department of Health and Human Services (HHS) could not launch its network of health exchanges for the Affordable Care Act in a minimally acceptable way. That knowledge did not stop the HHS publicity machine from constantly assuring the American public that its computer systems would be ready for the first enrollment period. That knowledge did not stop carefully scripted HHS employees and contractors from making similar false assurances to two House committees just weeks before the botched October 1 launch.

gary locke

gary locke

As the HHS day of reckoning approached, the publicity machine shifted gears and began acknowledging the likelihood of “glitches,” a brilliant rhetorical technique designed to dismiss all HHS failures as minor and fixable. President Obama echoed this “glitches” theme, and it worked. A mesmerized USA Today, for one, characterized the catastrophic October 1 breakdowns as “glitches” despite ample evidence of meltdowns in the HHS systems. Nobody in Hawaii could access prices for the plans; North Carolina recorded only one policy purchase. The launch has even interfered with the Massachusetts exchange, which functioned well for years prior to being integrated into the HHS systems. The federal exchange was inaccessible for much of the week, and was taken out of service the first weekend for repairs.

The new HHS talking points assert that the department will quickly fix last week’s failures. Many in Congress and the media are parroting those points, even though almost every prediction HHS has made to date about the exchanges has turned out to be untrue. Its newest assurances are untrue as well.

The department will surely ameliorate some problems in the coming months simply by buying additional capacity and fixing sloppy code. More enduring problems, however, will continue to plague HHS. 

HHS blundered when it allowed states to rely on self-attestation to verify eligibility for public subsidies in states that built their own exchanges. Experience with the Earned Income Tax Credit and other programs strongly suggests that in states that rely on self-attestation a high percentage of those who receive subsidies—probably 20-25 percent—will be ineligible. HHS has refused to explain how it will recoup payments from ineligible recipients. The official responsible for preventing this waste, fraud, and abuse, the HHS inspector general, has been silent about this problem as well.

HHS also blundered when it built its computer system in violation of the Privacy Act. In short, if you enroll in a health plan through an exchange, family members and recent ex-spouses can access the system and change your coverage without the legally required written permission. Traditional consumer and privacy advocates, such as Public Citizen and the American Civil Liberties Union, have taken a dive on this issue, and again the HHS inspector general has remained silent.

HHS opened the door to large-scale fraud by providing funding for tens of thousands of “navigators”—people who are supposed to persuade the uninsured to apply for coverage and then assist them in the application process. Instead of hiring well-screened, well-trained, and well-supervised workers, HHS decided to build political support for the Affordable Care Act by pouring money into supportive organizations so they could launch poorly trained workers into their communities without obtaining criminal background checks or creating systems for monitoring their activities.

As a practical matter, these navigators are unaccountable, and yet they will be asking people for Social Security numbers and other sensitive information. It will not take long for navigators to become predators, and HHS has no plan to deal with the new breed of predators it is creating. The somnolent HHS inspector general has been silent about this scheme that will inflict widespread fraud and identity theft on vulnerable Americans.

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