Obamacare's Big Implementation Challenges: Affordability, Enrollment, and Technology



It's clear at this point that the Obama administration thinks the key challenge in rolling out the health care law this year and next is getting enough young, health adults to sign up for insurance. The administration says they need 2.7 million young, basically healthy adults, a majority of whom are men, to sign up in order to make the law work.  

But it's also clear that, despite projecting confidence about their ability to convince young uninsured adults to sign up, they face an uphill battle—one that they lack a clear strategy to win.

The big problem is convincing those young adults that insurance is actually affordable. The administration is using data-driven campaign-style demographic and geographic targeting to try to reach out to the population that's most likely to sign up. But there's an awfully big difference between convincing someone to show up to vote and convincing them to shell out thousands of dollars a year for an insurance product.

Indeed, supporters of the law seem to understand that convincing those folks will be a significant challenge. In a lengthy piece on Obamacare implementation for The Washington Post, Ezra Klein and Sarah Kliff talk to the founders of Young Invincibles, a group dedicated to getting those crucial young people to sign up for the law, about the market research they've conducted:

They have found, overwhelmingly, that Americans are uninformed about the health law — and are deeply skeptical when they learn about it.

When they asked a recent focus group whether a $210 premium was affordable, only 29 percent of likely marketplace enrollees said yes. Then, Undem and Perry phrased the question a bit differently. They told the focus group participants that, with their tax credits, they would save "$1,908 a year compared to what you would pay on your own."

All of a sudden, 48 percent of the participants thought that insurance was affordable. But 48 percent is still less than half.

So the best response the folks at Young Invincibles can get still leaves them with more than half of focus-group respondents saying that the premium is unaffordable. And that's when emphasizing the value of the subsidies rather than on the actual price tag of the insurance itself.

The problem, of course,  is that for the most part decisions about whether to purchase insurance aren't likely to be made based on the size of the subsidies. Instead, they'll be based on what the beneficiary pays out of pocket after those subsidies are applied. Add to this the fact that the penalty for remaining uninsured will be capped at just $95 next year, and you have a very tough sell. And the administration's only real defense is basically that Obama is good at reaching young people and convincing them to vote. That's not nothing. But it's not obvious that Obama's campaign successes will translate into health law enrollment success, especially given the administration's persistent inability to sell the majority of the public on the law's virtues. 

The other big challenge for the administration is technical—creating the federal data hub that's supposed to perform critical exchange functions. There are serious questions about whether even a scaled back version will be operational and glitch-free by the time the exchanges are supposed to go live in October. And the best answer that Klein and Kliff, two of the best connected and most influential health care journalists in Washington, can get is that nobody who actually knows anything will talk:

Even the most tuned-in health care consultants have trouble predicting whether the federal government can get the law off the ground.

"It's pretty much a black box," Deloitte's Cheryl Smith said of the technology that powers the health law. "They tell us, 'It's freakishly on schedule.' They use those exact words. But only the people who work in this can tell you if its actually running on time."

Given how little information we have, it is entirely possible that the exchange tech will go live as planned on October 1 and surprise everyone with its sleek, smooth functionality. Really! Indeed, because we know so little about the progress being made on the law's technological infrastructure, critics of the law should definitely not count on certain disaster come October. 

But by the same token, the lack of transparency, and the general secrecy surrounding implementation, ought to make supporters less confident as well, especially given the few tiny snippets of  information we do have: the head of health law IT development admitting he is nervous, the delay of the employer reporting requirement (thus putting off an incredibly complex data management project), the history of missed health law deadlines at HHS, and the uncertainty expressed by the federal watchdogs at the Government Accountability Office, which reported last month that it simply couldn't say for sure whether the exchanges would be ready on time.

My guess, subject to change with new information, is that the exchanges will open for enrollment on time, but with limited, perhaps extremely limited, database functionality. As for enrollment, it's difficult to predict with confidence, but it certainly wouldn't be too surprising if enrollment turns out to be lower than hoped for, or heavily weighted toward sick and expensive beneficiaries.

All of which is to say that there remain a lot of ways that Obamacare can go wrong as it goes live. And despite its projections of confidence, the administration is not offering a clear, compelling case that it is certain to get things right.