Obamacare’s Exchanges Aren't Like the Massachusetts Exchange. Is That Why They’re in Trouble?

Whitehouse.govWhitehouse.govWhen critics have pointed out that setting up Obamacare’s exchanges, which are supposed to offer real-time verification of an individual’s eligibility for insurance subsidies, represents a major technical challenge, supporters of the health law have occasionally responded with some variant of: Well, it can’t be that hard. After all, Massachusetts did essentially the same thing.

Except that it didn’t. The Massachusetts system does resemble Obamacare in many important ways. It has an insurance exchange, called the Connector, that allows individuals to compare coverage options. But it has not offered real-time verification of eligibility for its state-subsidized insurance options.

In fact, the eligibility process takes a relatively long time.

The Bay State health care overhaul signed into law by Governor Mitt Romney in Massachusetts created a publicly subsidized insurance program for lower income individuals called Commonwealth Care. Individuals and families are only eligible for that program after filling out a 15-page Medical Benefit Request form.

That form then has to be submitted, along with proof of income, citizenship, immigration status, for processing. The form is the same form used to apply for Medicaid in the state, and processing is handled by MassHealth, the state’s Medicaid program.

Once the form and additional materials are submitted, the applicant must wait for a response in the mail, which can take days or weeks. Only at that point does an applicant find out if he or she is eligible for subsidized coverage, and what the subsidized plan particulars are.

You can see a basic explanation of the process on a Commonwealth Care brochure published by the Connector, which administers the Commonwealth Care program.

Now, those not applying for Commonwealth Care can go online and quickly compare prices and benefits of other health plans offered through the Connector. These plans must be approved by the Connector Authority, which exerts some influence over plan pricing and benefit design and has sometimes rejected plans it deemed as too expensive. 

But so far, the system has not made instantaneous judgments about eligibility for the subsidized coverage options available in Commonwealth Care.

I say so far because that’s set to change next week. The old Commonwealth Care program will end this year, and when Obamacare’s exchanges go live on October 1, subsidy judgments and relevant pricing comparisons for exchange-purchased coverage in Massachusetts are supposed to be done in real time.

Massachusetts, along with 15 other states, will be continuing to run its own exchange. One of those, Oregon, has already said it will delay its exchange’s online enrollment functionality.

The other 34 exchanges will be run by the federal government. And that’s where the potential technical problems loom largest.

According to a Wall Street Journal report from last Friday, the technology that is supposed to power those 36 exchanges is having trouble correctly pricing subsidized insurance coverage. Testing on the online calculator that’s supposed to determine those prices was supposed to begin months ago, but reportedly only began last week. In response, a health consultant and former federal health official who used to oversee the exchanges told The Washington Post, "Nobody is going to say we're not starting on October 1, but in some situations, you may see a redefinition of what 'start' means."

Looking at how Massachusetts initially built its system suggests why the federal government appears to be having such trouble with its technology. It wasn’t just a matter of scaling up an existing system. In addition to coordinating multiple federal and state databases that weren’t involved in the Bay State’s plan, the federally run exchanges are also aiming to offer real-time responses that the original Massachusetts exchange took days, at least, to come up with. It’s not just a big challenge, in other words. It’s a new challenge. We’ll know soon enough whether the folks implementing Obamacare have figure out how to make it all work. 

Update: California, at least, says its state-run exchange is ready to go. "We know of no glitches that are California glitches with regard to pricing," California exchange director Peter Lee tells The Huffington Post.

A report in The Hill, meanwhile, suggests that the federal officials expect that some of the exchanges may be somewhat glitchy on opening:

We're one week from the opening," [Centers for Medicare and Medicaid Services Administrator Marilyn] Tavenner said. "I am so ready to quit talking about 'Are we ready?' and switch to 'Here are the things we need to resolve, here are the mitigation strategies, here is what we're doing to correct and identify a problem.' " 

Tavenner and her team are responsible for launching 34 health insurance marketplaces for states that refused to create their own under ObamaCare. 

Her acknowledgment Tuesday points to the likelihood that not every exchange will operate smoothly from day one. 

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  • John||

    Once the form and additional materials are submitted, the applicant must wait for a response in the mail, which can take days or weeks. Only at that point does an applicant find out if he or she is eligible for subsidized coverage, and what the subsidized plan particulars are.

    And that delay has caused all kinds of hardships for people in Massachusetts as one arm of the government tries to penaltax them for not having insurance and the other arm screws around deciding if they are eligible for subsides. And those subsidies are never sent out on time. So, once you get your legally mandated insurance, you are stuck paying the full costs for several months usually while the state gets around to sending you your subsidy.

    Implemented on a national scale, it is not hard to see what a nightmare things are going to be. What happens when the exchanges go down or people's applications for insurance get stuck in the line and the year ends with them not having insurance? Do they have to pay the penaltax? What happens when the IRS fucks up and erroneously decides their policy doesn't meet the requirement? How do you appeal that? What happens when some fraudster, who has been hired by the government, sells you insurance on the basis of it qualifying but it in fact doesn't? Are you stuck with being ripped off and also paying the penaltax?

  • Rasilio||

    Also, what does it mean to "not have insurance"

    How long must one be without coverage before they trigger the penaltax?
    An hour, A day a week, a month?

    Is the penaltax prorated?

    what if you honestly believed you were covered but weren't (either the employer lied to you, didn't pay the insurance company, or you simply screwed up your enrollment) and so on.

    It will be a fiasco all right.

  • John||

    That is a good question. If I have insurance on 31 December, am I exempt from the Penaltax? I don't think they know the answer to that question.

    There is no method of tracking people throughout the year. You only need to be able to say you have insurance on your tax return. So I can't why buying insurance for the month of December every year and then dropping it wouldn't get you out of the penaltax.

  • tarran||

    In massachusetts, you have to submit a 1099-HC produced by each insurance provider, which checks off your months that you had coverage. You have to account for all 12 months.

  • John||

    So that then brings up the question, if I lose insurance for three months, do I pay the penaltax? Is it prorated if I do?

  • NoVAHockey||

    yes. but a gap of less than 3 months is not penalized.

  • John||

    They government will never fuck that up. The IRS is now going to have to track the insurance status of every American year around. I am thinking that is going to be harder than it sounds.

    Forget the exchanges, without a cross referencing system to check people's claims with insurance company's records, that system can't work. And even if you have that, how many people are going to get screwed because their insurance company and the IRS crossed wires?

  • NoVAHockey||

    i think a lot. and it's going to be those who this thing is supposed to help. people who change jobs frequently or enter and leave the workforce.

  • Ted S.||

    And, of course, you'll be guilty until proven innocent, like the rest of tax law.

  • tarran||

    In massachusetts, you have to submit a 1099-HC produced by each insurance provider, which checks off your months that you had coverage. You have to account for all 12 months.

  • Ted S.||

    Do you have to submit it twice? ;-)

  • NoVAHockey||

    the pentaltax will be pro-rated. IRS will determine the tax based on how many months in a year you were without coverage. i'd post a link but squirrels.

  • NoVAHockey||

  • John||

    Thanks.

  • John||

    No matter what happens, the IRS isn't going to give a fuck about any of this. They are going to grind people in the ground getting their penaltax out of them. Basically the best case scenario for an individual right now is that they keep their current insurance and its price doubles. That is the best bad thing that can happen. If you are unlucky, you will lose your insurance and thanks to the exchanges being so fucked up you will be unable to buy any new insurance and will be stuck paying a penalty for it.

  • Pro Libertate||

    Well, first one must answer the threshold question: Is the person in question a Republican? Next, is the person in question a libertarian or other unmutual person?

  • Almanian!||

    Not gonna lie - kinda hot for Sebelius. It's like my undying love for Katrina vanden Heuval - utterly nonsensical, unrequited and burning. I don't get it. I know part of it is I like the skinny-face girls.

    Now let's see all those comments about how comments like this demonstrate why there are no female libertarians, the poster has a sexual dysfunction, fuck up HyR for all the "serious" commenters and....your mom.

    GO!

  • Jordan||

    You're worse than Hitler.

  • Almanian!||

    It's true, I am.

  • John||

    I am not one to begrudge another person's sexual kink. But wow, that is a seriously weird one. I would be afraid she is so cold my dick would get frost bit.

  • John||

    I am not one to begrudge another person's sexual kink. But wow, that is a seriously weird one. I would be afraid she is so cold my dick would get frost bit.

  • John||

    I am not one to begrudge another person's sexual kink. But wow, that is a seriously weird one. I would be afraid she is so cold my dick would get frost bit.

  • Jordan||

    Sorry, I didn't quite catch that.

  • UnCivilServant||

    I thought I was having trouble with Squirrels eating my posts. At least they didn't replicate them

  • Almanian!||

    This may be a repost:

    John has denied me three times!

    Therefore, John = Peter!

  • John||

    The squirrels have gone insane.

  • Drake||

    They have won.

  • Anonymous Coward||

    You enjoy laying the pipe to upper-class, uptight, entitled, skinny, leftist women.

    Perfectly understandable.

    You sick mutant.

  • Neoliberal Kochtopus||

    I think this just means you have a Grand Moff Tarkin fetish. NTTAWWT.

  • Loki||

    I know part of it is I like the skinny-face girls.

    Or maybe you're just attracted to evil horse faced bitches. NTTAWWT

  • Loki||

    I meant to post that an hour ago, but FUCKING SQUIRRELZ!!!!111!!!!!!

    And then it took multiple reloads to get this one to post. Goddamn it, they're really fucking insane today.

  • Sevo||

    "Not gonna lie - kinda hot for Sebelius"

    Well, at least you won't be standing in any lines.

  • UnCivilServant||

    Don't trust IT to solve your problems.

    Don't trust Government to solve your problems.

    Don't ever trust Government IT.

  • Lady Bertrum||

    How will the exchanges verify income to check whether applicants qualify for a subsidy? And, what level of subsidy? Wouldn't they need IRS information? are the exchanges coordinating with the IRS? Seems unlikely.

  • John||

    There is that. And then there is the flip side. What if the they can't get the subsidies paid in a timely manner.

    So here I am and my employer cuts me to part time and I lose my insurance. I am required by law to have insurance. But since my employer isn't paying for it anymore, I can't afford it.

    First, if I make to much money, I don't get a subsidy. So, I am fucked. But even if I am eligible for the subsidy, who is to say the government is going to provide it on time? I need insurance now. But I can't pay for it until the government processes my paperwork and cuts me a check. Yeah, that will go smoothly.

  • Drake||

    I only the squirrels would let them through, our resident trolls would explain it all to you.

  • R C Dean||

    The exchanges are supposed to be harvesting data from a whole slew of government databases, including the IRS.

    That's why you would have to be a genuine idiot to think they could be built and launched in, what a year or so since the contracts were awarded?

  • Rasilio||

    Even if they were it still wouldn't work.

    How do they handle changes in income.

    What happens when there is a large irregular fluctuation in income, say a single mother earning $20k somehow wins $25k (lottery, charity auction, game show, etc.), her income for the year would now be more than 400% of the poverty line for the year. What insurance subsidy is she eligible for? If the answer is none what happens if she wins this windfall in December after collecting the full subsidy for 11 months, does she have to pay it back?

    What about a small business owner who does not draw a salary, their income is equal to their profits for the year, their income for the year remains unknown until after they close their books for the year. How is their subsidy calculated?

    What about a single person who earns $120,000 a year and has an extensive stock portfolio and they suffer a $90,000 loss on the value of that portfolio? Their income for the year now qualifies them for a full subsidy. Will they be retroactively reimbursed?

    How about a College Post Grad who earns $12,000 while in school then upon recieving his masters goes out and gets a job paying $200,000, at what point does he loose his subsidy?

    And so on and so forth with a million other scenarios.

  • Raston Bot||

    For the stock portfolio scenario, isn't there a $3,000/year limit on capital losses and the rest is carried over to subsequent years?

  • Rasilio||

    Yes, unless he is someone who is not paid wages and earns his income solely from investments. In which case the loss would offset any gains he had in other investments and be fully deductible immediately.

  • ||

    I'm starting to get a sneaking suspicion that Obamacare was a vanity project.

    It's either it wasn't well thought out at all or organizations are being paid to spread falsehoods about it as the President alleges. Which probably means it's all accurate.

  • John||

    It was a total vanity project. They had no idea what they were doing. But Obama's mouth wrote a check so they had to pass something. It is and was a total cluster fuck from the very beginning. It is hard to imagine a more ill conceived and screwed up piece of legislation.

  • kinnath||

  • John||

    Time will tell if this gets them their beloved single payer. But right now the only thing Obamacare has accomplished is ensuring that the Republicans control the House until at least 2020. It was a political blunder of epic proportions.

    Imagine a counter factual where Obama didn't push Obamacare and instead beat the Republicans to death on taxes and stimulus. Chances are the Tea party is half of the strength it was and the Republicans don't take the House in 2010. In addition, with giant uncertainty that is Obamacare removed, the economy probably does recover to a reasonable degree and Obama is taking a bow for saving the country from the next depression.

  • Brett L||

    Republicans control the House until at least 2020

    Don't overestimate how quickly the 'phants will fuck up if they win the Presidency or both chambers by 2016.

  • Paul.||

    “We needed something to say,” recalled one of the advisers involved in the discussion. “I can’t tell you how little thought was given to that thought other than it sounded good. So they just kind of hatched it on their own. It just happened. It wasn’t like a deep strategic conversation.”

    Welcome to the Obama administration.

  • kinnath||

    I tried to post that comment about 5 times. The skwirls rejected me.

  • Paul.||

    I had trouble too. I just tried harder than that. Because I don't have friends or a life.

  • ||

    The most telling thing is that this guy was perfectly comfortable admitting this and having it put in print.

    Yay for government and the venal scum who populate it.

  • kinnath||

    I can’t tell you how little thought was given to that thought other than it sounded good.

    Pretty much wraps up every fucking position this administration has taken on anything.

  • tarran||

    Kinnath, do us a favor; email addresses in the name url are breaking reasonable.

    Can you hide yours?

  • kinnath||

    Should be done now

  • kinnath||

    So does removing my email make it easier for you to block me?

  • tarran||

    Yes, yes it does....

    Doh!

  • Almanian!||

    Man, HyR is all kind of fucked up all the sudden.

    I think it made up a post that I said I have a crush on Katherine Sebelius or something. Hah!

    I'll be in my bunk...

  • ||

    Yeah, it was the squirrels doing an impersonation of you. Sure.

    I'm keeping my eye on you.

  • Raven Nation||

    From a distance, I hope

  • SugarFree||

    "Almanian, I want to marinate your face in my asstric juices," Katherine whispered. The ashen wattles on her neck quivered like jellied meat.

    "I want to lick your every wrinkle and crevasse, Katie. I want to fill your dead womb with my hot man semen and have you shit it back into my mouth." Almanian was panting as he strained to free himself. She jammed the applicator into his anus to fit another tampon in. He sigmoid colon felt pregnant with cotton. He wanted to give ass birth to their special brown baby.

    Katherine climbed onto his chest and thrust her chewed labia into his mouth, her pubis bruising on what was left of his teeth. He choked on the grey flesh and smell of powdered violets. Her shriveled teats swayed queasily above him. He longed to squeeze them until they were smooth and ripe again. She farted wetly and it spattered into the hollow of his neck. He writhed around, jerking against his restraints. Katherine reached back and scooped up a fingerful of shit and wrote her initials on his forehead. His eyes were wide with panic; her gunt was splayed over his nose and he couldn't breathe. She smacked him in the ear and laughed.

  • SweatingGin||

    In all the foulest bowels of the internet, this is the worst thing I've ever read. Warty Hugeman is a Nancy Drew story to this.

    the horror... the horror....

  • Neoliberal Kochtopus||

    You must have missed the Supreme Court orgy one. And no, I am not making that up.

  • SugarFree||

  • SweatingGin||

    I'd suppressed that one a bit. Seems like I read it before.

    Didn't churn the stomach quite the same as this one, though.

    (wipes brow, takes a walk around)

  • Ted S.||

    Did you miss the Scat Trek stories this morning? :-)

  • ||

    Is it bad that reading this has been the best part of my day so far?

  • Neoliberal Kochtopus||

    If you have to ask...

  • Almanian!||

    No. You and I both know we'd call that "a day".

  • SugarFree||

    Is it bad that reading this has been the best part of my day so far?

    Probably.

  • sarcasmic||

    You are one sick motherfucker.

  • ||

    "Special brown baby"

    Mmmm. Excellent.

  • Neoliberal Kochtopus||

    Are there any bell towers on your campus? Just asking for a friend.

  • Loki||

    I just threw up in my mouth. And not a little, I'm talking pea soup scene from The Exorcist. Holy shit, that's the most disgusting thing I've ever read.

  • Almanian!||

    Also, is there a chapter where Katrina vanden Heuvel joins us? Cause that would be HAWT.

  • Neoliberal Kochtopus||

    I would ask what is wrong with you, but then I remembered you're from Michigan.

  • Almanian!||

    Clean, Great Lakes Water, the smell of fresh pine needles, and long, lonely nights spent staring at the screen with only Reason.com for company....

  • Libertymike||

    Glad you appreciate my company.

  • Neoliberal Kochtopus||

    Well that explains a lot.

  • Almanian!||

    I blame Bush

  • SugarFree||

    Kat and Katie will return in Ass-Loving Grannies, Vol. 16.

  • Almanian!||

    My life for YOU!

    /Trash Man

  • ||

    My god you are one depraved...I hesitate to call you human. I couldn't even make it through the sexond paragraph.

    Well done.

  • ||

    And we have our Pulitzer nominee!

  • ||

    Jesus.

    In the name of the Father.

    Christ.

  • Fist of Etiquette||

    I kind of liked this one.

  • BuSab Agent||

    THIS is why there are no female libertarians.

  • Raston Bot||

    Would you sharpen her beak with a whetstone? And no, that's not a euphemism.

  • Loki||

    This is just a test to see if the fucking squirrels have stopped going insane yet.

  • Loki||

    It still takes several tries to post any comment. I guess I'll go do some actual work now instead. Oh well, at least work doesn't subject me to any more of SF's "erotic musings".

  • Almanian!||

    Yeah, others were having trouble earlier, and thenI started experiencing it about 1:00 eastern or so.

    Then, when I awoke, there was a SugarFree scat pron story about me on the interwebs.

    And I smelled vaguely of powdered violets and shit...

  • Brett L||

    OT: I think farming octopodes is going to be bigger than Kickboxing in the 80s.

  • Raston Bot||

    Two problems:

    1. meat eaters
    2. no acquired immunity

  • widget||

    Looking at how Massachusetts initially built its system suggests why the federal government appears to be having such trouble with its technology...

    There's a meta problem with this. The Government of United States of America could not put a man on the moon and return him safely to earth within the next 30 years. The USG couldn't do it with a stellar appropriation of funds or even an unlimited budget. It just couldn't do it. It was able to do so in the 1960's, but not now. This is not a technology problem.

  • sarcasmic||

    This is not a technology problem.

    They've definitely got a micromanagement problem. When every single decision from major changes to fixing misspelled words must go through a government committee that meets once a month, very little gets done.

  • widget||

    The next man on the moon will be Chinese. The USG couldn't figure out what ethnicity the astronaut should be in the next 20 years.

  • widget||

    A one-way trip, I should add.

  • Paul.||

    I think if the US could make it a one-way trip, they'd have an easier time deciding the ethnicity.

  • widget||

    Your wit is not as subtle as you think, citizen Paul.. The next moon launch, it's astronaut Paul..

  • Paul.||

    Wit?

  • The Late P Brooks||

    There are many, many people who believe the Internal Revenue Service is like a government-run Christmas Club: "Hey the IRS sent me a big check, and I went right out and bought a new teevee!"

    When the Obamacare gets up and running, those checks are going to shrink, if not disappear. I anticipate a lot of wounded howling.

  • John||

    That is a very good point. People act like the Penaltax is just no big deal. Hey just pay the penaltax and avoid the overpriced insurance. That sounds great until you realize many people are paying neither right now.

    This thing is only going to get worse and more unpopular.

  • widget||

    The proles (me included) don't remember last Christmas. We'll remember watching Jean Shepherd's A Christmas Story and the evil of guns for a bit longer.

  • Paul.||

    Thankfully, my free tv disappeared a while ago... so I guess it'll be the IRS that'll be getting a free tv, from me.

    So... the onliest difference I see is that the IRS actually IS getting a free tv, whereas I only felt like I was getting a free tv.

    I've noticed all these streets are one-way...

  • widget||

    My boss, in the early '80, identified Linda Ronstadt as the source of American social decay. And then you come along.

  • Paul.||

    I'm the result of social decay. If you can't see the difference.

  • ||

    Curious, what was wrong with Ronstadt?

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