Federal Government to Run Majority of ObamaCare Exchanges. Will the Feds Be Ready On Time?


Photo credit: Barack Obama / Foter.com / CC BY-NC-SA

The Washington Post notes that since ObamaCare's passage in 2010, "no one knew if the states would take the lead in setting up the exchanges or if the federal government would end up shouldering most of that work."

As of Friday, however, the issue is settled: The federal government will fully run the exchanges for 26 states, and assist with exchange implementation and administration in an additional seven states. 

Now the question is no longer whether Washington will take the lead, but whether the exchanges—both those run by states and those managed by the feds—will actually be ready on time.

There's reason to be skeptical: It's a big task, with major information technology procurement issues that have already caused headaches for early implementation efforts. Not only will the exchanges have to do rapid, accurate income verification to determine eligibility for the law's insurance, subsidies, which some experts have warned will prove more difficult than expected, they will also have to interact with multiple state Medicaid systems and health regulations. 

In a budget report published earlier this month, the Congressional Budget Office sounded a note of cautious warning about what to expect from the law, noting that: "CBO and JCT [Joint Committee on Taxation] have slightly reduced their estimates of the rates at which people will enroll in the insurance exchanges or Medicaid as the expansion of coverage is implemented—a process that had already been anticipated to occur gradually. That change reflects the agencies' judgment about a combination of factors, including the readiness of exchanges to provide a broad array of new insurance options, the ability of state Medicaid programs to absorb new beneficiaries, and people's responses to the availability of the new coverage." [Bold added.]

Still, officials at the Department of Health and Human Services, which is heading up the federal exchange efforts, are projecting confidence, promising the exchanges will be open for business this October as called for by the law. 

But the law's track record so far does not inspire much faith. Last summer, the American Action Forum found that 47 percent of the law's implementation deadlines had been missed. Local officials aren't exactly having an easy time implementing the law either, even in places where the law isn't subject to significant political opposition. Last September, for example, Washington, D.C.'s acting director told The Washington Post that "when they passed the ACA, they were highly optimistic about the timeline for states to implement exchanges." 

That sort of commentary is especially bad news for the feds as they try to set up the majority of the exchanges, because the law was crafted under the assumption that states would be doing all of the work and that the federal government would not be running any of the exchanges at all. If implementation is a challenge for states, the presumed operators of the exchanges, it may be even more of a challenge for the federal government. 

NEXT: Four Dead After Shooting Spree in Orange County, California

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Of course they are not going to be ready. Everyone, not just the evil “rich” but everyone, is going to see a real decline in their standard of living that is going to be directly traceable to Obamacare. If it wasn’t such a national tragedy, it would funny to watch Democrats run away from this monstrosity over the coming years.

    1. Or, as others have postulated here in prior weeks; as healthcare declines under the PPPACA, the mantra will be: “it didn’t go far enough, we need to increase federal control.”

      Essentially the argument will be that evil insurance companies, evil private hospital corporations, and the rich who are hiring boutique doctors are destroying what Obama tried to do. The only solution will be complete government control.

      1. That will be the story. That and how Obama in a failed attempt to compromise with the evil GOP adopted a conservative healthcare plan. I am just not sure that dog will hunt. The best thing that ever happened was not a single GOP Congress person voting for it. They fucking own this law.

        And also, there just isn’t any money for single payer. Single payer cannot happen. Their shot for that was in 1993 with Hillary care. Now there is no money to do it.

        So they are pretty much fucked. Sadly we are fucked with them since they will never undo it and it will just make things worse and worse.

        1. “I am just not sure that dog will hunt.”

          It’ll be a good opportunity for libertarians. With the “Middle-Way” plan out of the way, the debate can coalesce around free-markets vs. outright socialism, when free-markets haven’t even gotten a hearing to this point. Centrists will have to pick a side.

    2. I knew this would fail, but I somehow didn’t conceive that a big part of that failure would be the familiar Government IT Project Clusterfuck. Government IT Projects: How Often is Success Even an Option?

      1. I’ve seen a couple work pretty well. They all shared an extremely tight focus (Create an HR database that is the sole repository of employee data in our system, for the FL prison system, which has a shitton of employees.), modular design (we’re going live with module 1 of 10, fuck the bells and whistles), and a user community that was involved in design and testing early and often.

        I forsee none of these things happening, so I’m hoping to get on one of the health care exchange projects and bill like a motherfucker.

      2. This is just too good to miss:

        “Chair: ‘Do you agree it is high cost?'”

        “Mr Banyard: ‘I don’t think it is high cost for what we are getting'”

        “Chair: ‘So Dame Strathie was wrong?'”

        “Mr Banyard: ‘No, she was not wrong.'”

        “Chair: “She said the opposite of what you have said.'”

        “Mr Banyard: ‘It is a relative judgment, isn’t it?'”

    3. a real decline in their standard of living that is going to be directly traceable to Obamacare

      Technology will likely continue to improve standards of living even in the face of massive government intervention. Standards of living will be lower in the future than they would be without Obamacare, but you’re going to have a hard time convincing someone dependent on the government that they’ll be better off without it. Democrats won’t run away from it any more than they’re running away from SS, Medicare, DHS, TSA, the Department of Education, NASA, or the interstate highway system.

      1. You will have a hard time convincing someone who used to have insurance they like and now either don’t have it or are paying thousands of dollars a year more for it, they are doing better. Here is the thing, our healthcare system pre Obamacare worked great for most people. Thanks to Obamacare, it is going to stop working so well. For the first time really ever, people are going to see things actually get worse.

        And Dems are already running away from this. See the TPM memo above.

        1. I think you’re overestimating the number of Americans who understand anything about their insurance, who will be aware of a negative impact, and whose awareness will persist for more than about 12 months. In due time, Obamacare will be viewed just like any other government program. It’s obvious that the seven I listed are impediments to the progress of humanity, but very few people are intelligent enough to see that and it’s easy to scare their direct and indirect beneficiaries into supporting them.

          1. I think you’re overestimating the number of Americans who understand anything about their insurance,

            I think pretty much everyone can read their paycheck.

          2. I think pretty much everyone can read their paycheck.

            I don’t.

            1. I don’t.

              So you won’t notice when the price of your health insurance doubles? I won’t doubt your sincerity. But you would be a small minority if that were the case.

            2. I will, because I buy individual coverage. But most people won’t. They don’t have line items on their paychecks showing how much their employer paid for their insurance. If they did, most healthy people would want a refund to go buy their own coverage.

  2. Reeeeeaaaaaally enjoying this all die of its own weight, but of course, it won’t REALLY “die”. They’ll keep it on life support till it fucks itself to single (gummint) payer. Just like they planned all along. What a clusterfuck.

    1. “watching” this all…

    2. Even the brain dead douche bags at TPM admit it is a disaster. Of course TPM thinks it is only failing because of evil Republican wreckers. But even they admit it is as it stands a complete disaster.

      Give a couple of years and they will be claiming it was the Republicans who passed it and George Bush who signed it.


      1. So, they tell states that you want them to expand their medicaid budget and to implement the insurance exchanges, and they don’t expect incredible blowback? That’s their idiotic thinking; don’t go blaming it on the GOP.

        1. They are supposed to go along for the common good.

          1. No. “They are supposed to go along with it because that’s what the law says, and if the law says it, you’re supposed to do it. That’s how it supposed to work, so do it!” < THIS IS WHAT THE OBAMA ADMINISTRATION ACTUALLY THINKS!

  3. The ACA gives the federal government a lot of leverage in order to blackmail the states into complying with what they want, but as of right now, enough governors are adamant about not playing ball and a lot of these deadlines are going to be missed.

  4. This is such an epic clusterfuck. This goes far beyond Schadenfreude.

    1. I’m’na get me some while being as incompetent as possible. I’ll just pretend I’m a BuSab agent.

  5. Yeah I just wish the GOP had the balls to have a sit down strike on this. You wrote it, you passed it, you signed it, now you fucking own it. But since they’re the stupid party, they’re going to try to fix it and then the Democrats will blame all the problems on the attempt to fix it. The Stupid Party will always live up to its name.

    1. They did have the balls not to vote for it. I think they did back down and let the dems fix the medical device tax.

      That is good example of the problem. That tax was one of the most idiotic and damaging taxes ever passed. And yeah, the Dems own it and ought to be shot for it. But at the same time, I can understand why the Republicans didn’t want to save it and in the process kill the US medical device industry out of spite. So what do you do?

      1. Fuck the medical device industry, which collectively/generally supported OCare during the fight (my recollection, anyway). Hope you enjoy your petard, fellas.

        That’s what you do. Actions have consequences. Letting people off the hook for being fucking idiots is no way to ensure they’ll stop being fucking idiots.

        1. You can’t let those poor people who bought a home for way more money than they could afford to get kicked out of it! That’d cause anarchy! And maybe next time they’d be more cautious with their purchases. The horror!

Please to post comments

Comments are closed.