Is Obamacare Too Complex to Work?

Yet another government watchdog says the health law is failing to verify eligibility for subsidies.



Obamacare continues to be haunted by its complexity.

The federal insurance exchange created under the health law doesn't effectively verify critical information about applicants' income and citizenship—information that is used to determine whether an applicant qualifies for federal subsidies—according to a new report by the Health and Human Services (HHS) Office of the Inspector General.

It's the latest confirmation of continuing technical troubles for the health care law, and yet another indication of how difficult it's proving to get the law to work as intended.

When the health law's coverage expansion went live in January, 2014, former HHS Secretary Kathleen Sebelius promised that the exchanges would "verify that applicants for advance payments of the premium tax credit and cost-sharing reductions are eligible for such payments and reductions."

Sebelius didn't just give her word that information provided by applicants would be independently verified; it's required by law.

But key parts of the verification system don't work, according to the IG report.

"Not all of the Federal marketplace's internal controls were effective in ensuring that individuals were determined eligible for enrollment in [insurance plans] and eligible for insurance affordability programs according to Federal requirements," the report says.

In particular, the system has deficiencies related to verifying Social Security numbers, citizenship, annual household income, and family size.

These aren't minor issues. These are the most important variables the law uses to determine eligibility for subsidies, and yet the system can't regularly perform an effective validation of any of them. Household income, in particular, is the biggest factor in determining whether someone qualifies for subsidies, and, if so, how much. But Obamacare's system doesn't consistently provide an accurate check.

Are there lots of subsidies going out that shouldn't be? This is, at the very least, a real possibility. The lack of effective verification doesn't tell us that what percentage are wrongly awarded—just that we can't be sure what percentage is handed out correctly.

In addition, the report says that applications with inconsistencies aren't always resolved properly, and that records related to inconsistent applications aren't well maintained.

Why is the system unable to do what it is supposedly designed to do? Basically because it's just too complicated. Information sent through the exchanges is sent through the Federal Data Services Hub, a kind of air-traffic control system for all the personal data that Obamacare's federal exchange system handles. The Data Hub then connects to HHS, the Social Security Administration, the Department of Homeland Security, the IRS, as well as a number of other agencies.

Except, well, sometimes it doesn't. As the Inspector General's report says, "The deficiencies related to verifying applicants' eligibility occurred because, for example, the Federal marketplace's eligibility and enrollment system was not designed to always validate Social Security numbers through SSA."

Basically, the Data Hub is supposed to send personal data out to do digital wind sprints—touching some other agency database, then coming back through the central hub. But sometimes it just doesn't work. There's too much information trying to connect to too many different systems. It's a technical problem born out of bureaucratic sprawl, and it's a mess. 

The result is a system that could well be rife with errors, and lends itself to exploitation. Just last month, the Government Accountability Office (GAO), another federal watchdog, released a report showing that Obamacare's exchange technology had allowed 11 fake accounts made up by undercover GAO investigators to stay in the system, even though the GAO had made the existence of those accounts public a year earlier. Indeed, about half of those fake accounts were actually granted even larger subsidies their second year in the system. The watchdog agency's blunt conclusion was that "HealthCare.gov [the federal health exchange site] does not appear to be set up to detect fraud." 

This is one of the dangers of a law like Obamacare, which, for political reasons, largely built on top of the already-complicated, already-fractured existing health system. The result is a makeshift, patchwork add-on that in many ways makes the system even more frustratingly complex, and in the process creates more problems—like this. 

It's not just subsidy verification that is turning out to be harder than expected. The law's back-end payment systems, which were supposed to be completed and online in 2013, still aren't fully finished, meaning that insurers are just estimating how much they're owed under the law. Earlier this year, the administration sent out hundreds of thousands of tax forms related to the law with errors on them, and didn't even know why. A similar problem affected more than 100,000 Obamacare enrollees in California. In the state-run exchanges, many crucial functions remain incomplete

Think of it this way: Before Obamacare, the U.S. health system was like a giant tangled knot. If you've ever tried to untangle a big knot, you know that it can take a while, and that the trick is to patiently loosen one bit at a time.

Obamacare's designers, in contrast, saw that they couldn't undo the knot, so they added more string, and tied it into the knot that was already there. Now it's an even bigger mess.

That's obviously a problem for reformers who want to begin the slow, frustrating process of untangling the knot. Obamacare has made the age-old problems with the U.S. health care system even harder to unravel.

But it's also a problem for people trying to make Obamacare work. HHS officials basically agreed with the IG report and said they are taking some steps to address. Yet it's clearly a harder problem to solve than anyone expected. I wouldn't be surprised if this administration never gets it all resolved. Obamacare is likely to continue struggling with the burden of its complexity for as long as it lasts. 

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  1. A bad idea captured in a bad law struggling with a bad implementation. Other than that, it sucks.

    1. Other than that, how was the play, Mrs. Lincoln?

    2. You forgot “…passed using a bad method, in bad faith, by bad legislators, and signed by a bad President, and then upheld using bad arguments offered to a bad Supreme Court Chief Justice.”

      1. And rejected by a Republican Congress, for themselves that is.

        How Boenhers (sp) district can leave him in office after it was exposed that he had conspired with Obama to lie to the public about his reason for visiting the White House in his effort to gain relief from the ACA for Congress is absolutely mind boggling.

  2. Hard telling, since Obo has rescinded about half of it. I guess he figures it’s unworkable.

    1. I thought he’d just delayed it to avoid losing critical elections.

  3. It isn’t complex at all. The courts ruled it says “Obo can do whatever he wants”. It’s an enabling act. Simplest thing in the world.

  4. If I didn’t know better, it is almost as if Suderman is complaining about the details of Obamacare. LIke it is just a few technical glitches away from doing something good.
    (Sorry, just a little frustrated)

    1. Suderman is a jester performing in the D.C. Court of Top Men.

      1. On the sidelines, in a cast.

        1. +1 slice American Pie

    2. LIke it is just a few technical glitches away from doing something good.

      If the technical glitches repeatedly and consistently prevent it from doing the very thing(s) it was supposed to do, are they still technical? Every time I’ve heard technical used in this way I assumed it was irony/sarcasm.

      I mean, at this point, as near as I can tell, it’s a very elaborate (and insecure) hit counter.

      1. I really think we need to examine this practice of regarding Obozo and the left as being evil geniuses, they are evil ignoramuses. Far from using logic to plan and execute a deliberate long-range strategy, they are social sheep who glob onto whatever party line is being pushed and live by the range of the moment.

        1. Hanlon’s (or Heinlein’s) Razor applies:

          “Never attribute to malice that which is adequately explained by stupidity”

          -but don’t discount malice, either.

          1. Yep!

          2. It is unwise to attribute to malice alone that which can be attributed to malice and stupidity.

            Simon’s Law

        2. I hear progs say often that “You can’t say the gov’t is too powerful and too stupid at the same time”.

          And yet that is exactly the problem. It is like the chimp with an AK-47.

          DISCLAIMER: This analogy predates our current POTUS and is in no way intended to compare him to a chimpanzee.

      2. Is it too complex, or are the people and agencies tasked to verify people not really trying? People deserve subsidies!

  5. ‘complex’ is a feature and it’s not meant to work, not in the traditional way we use that term.

    1. You can fool some of the people all of the time and all of the people some of the time, this is sufficient for most purposes.

  6. More billable hours for health care consultants like Gruber.

    1. Who? I only watch the evening news and have never heard that name. Was he important in some way the media isn’t bothering to mention?

    2. I look forward to the slow motion footage of Gruber falling backwards from a high-rise.

  7. “Give her word.” “Required by law.”

    How cute!

    It’s like he’s living in the 19th century.

  8. It’s not a bug – it’s a feature.

    1. Absolutely this. The administration has absolutely no desire to restrict the money. They don’t care if Obamacare is a huge drain on the budget. That’s what debt is for! And everyone who gets a subsidy, has a vested interested in maintaining Obamacare from that point forward.

  9. If you’ve ever tried to untangle a big knot, you know that it can take a while, and that the trick is to patiently loosen one bit at a time.

    Alexander says otherwise. *slice*

    1. This isn’t a knot, it is deep-fried spaghetti. Ever time you try to untangle something, you are at risk of the entire thing crumbling in place.

      It’s a good thing we have a Supreme Court that can just wave it’s magic gavel to make little problems go away.

      1. This isn’t a knot, it is deep-fried spaghetti.

        By the way, this is how I describe half the code generated by new CS graduates.

        1. Right? Only, this is worse. I think half the federal government is still on systems built in the early nineties. Ten yrs ago, a graduate student could program in Ruby or some crap, and design a better system than this crap.
          And these are the people we are supposed to trust with all our info.

  10. there’s still no punch in this turd bowl.

    1. You’re not required to drink the punch but you are required to buy a cup full.

      1. Unless you are with your lesbian partner in which case you only have to buy a cup between you.

  11. The purpose of the law is to get people to swap control of their lives for free shit, so the fact that undeserved subsidies are passed out means the law is working even better than expected.

  12. Yet it’s clearly a harder problem to solve than anyone expected

    ::Raises hand

    I expected it to be at least this hard. I know a number of other regulars here did too.

    1. The reason I bring this up is because saying “Yet it’s clearly a harder problem to solve than anyone expected” makes it sound like you’re saying “No one could have predicted that the law would have all these problems.” But lots of people anticipated this. In fact, we thought it would be even worse. The only reason it isn’t even worse is because parts of the law haven’t even been implemented as written.

  13. When in doubt, just give it away. More and more I see TSA sending people through Pre-Check to speed things up. I’ve personally witnessed this at multiple airports.

    This is the same principle, with Obamacare. When in doubt, grant the subsidy.

    1. As an old man and Navy vet who’s never been arrested and travels to the Caribbean once a year, getting the “pre-TSA” sticker on my ticket this year was kind of nice. “They finally realize I’m not a threat!”, I thought.

      You just popped my bubble, mentioning that it has nothing to do with my impeccable credentials, but merely an attempt to move the line along a little faster. The pre-approval may have been randomly generated, for all I know.


      1. “The pre-approval may have been randomly generated, for all I know.”

        Unless you signed up for TSA pre-check, had a security check run and paid your $85, then yes you were randomly picked. Everyone that has TSA pre-check goes through the pre-check line, but if the pre-check lines are light, they randomly pick people to go through the line.

  14. The technical problems continually cited as the cause here could be overcome, if anyone wanted them overcome.

    But an effective verification system would lower enrollments.

    It is politically important than enrollments be kept high. This means that the people in charge not only have no reason to want to detect fraud – they have good reasons to NOT want to detect fraud.

    1. But an effective verification system would lower enrollments.

      It is politically important than enrollments be kept high. This means that the people in charge not only have no reason to want to detect fraud – they have good reasons to NOT want to detect fraud.


      1. The excuse will be that enforcement will have a disparate impact on Dem voters.



    1. Needs a few more ‘Free’s.

      A free super-free market-free reform free of great success!!!!

      1. “Free of success” sounds about right.

  16. Crickets from our resident statist shitheads. Color me shocked.

  17. verify critical information about applicants’ income and citizenship

    Wouldn’t verification of this information be de facto racism?

    1. Health Insurance is a Right, just like Voting, therefore Health Insurance ID is RACISM

  18. Yes, it is too complex to work.

    No, it can’t be fixed.

    You can’t competently or effectively micromanage the health care, or payment for the health care, of a third of a billion people. Can’t be done. Impossible.

    The idea that anyone could is hubris. What we are seeing is slow-motion nemesis.

    This is why all the “repeal and replace with MY micromanagement plan” horseshit should be laughed out of the room. But no, we are good and trapped in the idea that micromanagement is something the government not only can do, but should do.

    Fucked, we are. Unfucked, we shall not get.

    1. It’s a self-perpetuating system. These systems draw academic types, all of which think it can be done. How many “professors of health policy” existed fifty or sixty years ago? Correct me if I’m wrong, but I’d suspect that number to be around zero.

      There is now a segment of society that sees the complexity of these things as an opportunity for prestige positions. Essentially, there’s a type of person that wants to be picked to be in charge of the healthcare for 320,000,000 people. Imagine that kind of power!

      1. It doesn’t seem to be drawing academic types, it seems to be drawing lawyers. The most economically illiterate professions are without a doubt law and medicine. Create a law using doctors and lawyers and you are certain to have a massive fuck-up.

        If they had ANY sense of economics, they’d at least understand the law of diminishing marginal utility. But their jobs depend on NOT understanding it. Their answer for everything is UP THE DOSAGE.

        1. Yeah, but when it comes to Vicadin, I am all for it!

        2. It doesn’t seem to be drawing academic types, it seems to be drawing lawyers.

          I’m talking about the ‘experts’ that are called in to craft the laws. There are mountains of lawyers, to be sure. But the lawyers will always be there. No, I’m talking about the Jonathan Grubers of the world.

          1. Ever hear an academic say there is too much education?

        3. If they had ANY sense of economics, they’d at least understand the law of diminishing marginal utility.

          Law of diminishing marginal utility? No problem! We’ll just amend it, like we do the other laws we passed.”

    2. In fact, the fact that Universities even HAVE a “Professor of Health Economics” is a problem. Healthcare economics are simply economics. They obey the same rules of supply and demand that iPods and artisan-roasted coffee do. The idea that they require a special niche is embedding us in our own created disaster.

      1. Quite a lot of what makes up a typical university these days is total crap.

  19. We have already seen Democrats running as if the ACA doesn’t exist.

    So, not controlling subsidies seems like a feature not a bug.

  20. I’m sure that “preventing unwarranted Obamacare subsidies” is right up there on this administration’s to-do list with “turning over all of Lois Lerner’s e-mails” and “issuing a decision on the Keystone XL pipeline.”

    1. Yeah, this article pretends that giving free or subsidized insurance to the unqualified is a bug, not a feature of Obamacare.

  21. What? Nobody used the term Gordian knot? Why knot? 😉

    1. Lord Humungus|8.10.15 @ 3:49PM

  22. Since no government health care plan, single payer or insurance subsudy, has EVER worked, why would this one be different?

    1. Since no government health care plan, single payer or insurance subsidy, program has EVER worked, why would this one be different?

  23. Reason obamacare articles are becoming more and more irrelevant. Entitlements are too big to fail, and when they do fail, they grow. And when they can’t grow any further, republican democracy quickly disintegrates.

  24. But you said it would save private medicine. And spur health innovation!


  25. What are the odds that health insurance would be the one thing big government does well?

  26. You know what’s not complicated? Government having no damn involvement. I buy what insurance I want from some company that freely provides it.

  27. Here’s a core reason why. Add up all those different databases that have to communicate with one another. Far simpler IT systems, within a single government department (e.g. the FBI) have failed.

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