It has been 10 weeks since Obamacare’s health insurance marketplaces went live for a nation full of expectations, hopes, and needs. Needless to say, everything did not go as planned, and the enrollments, health plans, administration—really everyone took a hit. However, the administration did not shy away from the glaring challenges and humiliation of healthcare.gov, and resolved to get things better for the country and itself. Now, after 10 weeks of jostling with a failing strategy, the administration finally has some developments it can hold strong in front of the opposition and a disappointed nation.
The last couple of weeks in this journey toward fixing the struggling marketplace have revolved around two main pillars – enrollments and backoffice issues. These aspects are two sides of the same coin, linked to each other closely, with one influencing the performance of the other. Let’s break down the developments in each of them, one by one, and see how they are influencing the performance of the exchanges.
Enrollment Numbers Improve, Scope for More
The good thing with enrollments is that, after a lot of effort in improving the working of the online marketplace, enrollments are finally looking up. The enrollment numbers from the first two months are somewhere about 137,000 and the major reason behind this low number is a struggling website. December will be a break it or make it month. However, the troubling part about enrollments is that even after a smooth performing marketplace, the enrollments have not demonstrated a major jump, as was expected. Surprisingly, this holds true for states where the state-based exchanges have been running well since the launch.
For instance, in California, enrollment numbers in private plans is somewhere around 107,000. When you couple that with the 800,000 policies that were recently canceled due to incompliance with the ACA; and with 2.5 million people who are uninsured, with half of them qualifying for subsidies, the slow enrollment rate is worrying. The same is true for New York, which currently has approximately a half million enrollments, but has a population of two million uninsured. Out of these uninsured, a half million are eligible for subsidies, and it makes sense for them to purchase health insurance off the exchange, , but they still haven’t enrolled.
Backoffice Problems, the Real Culprit
While enrollments are increasing, the backoffice problems are the exchanges Achilles’ heel. The 834 transaction errors, which are errors that are occurring during the transfer of information from the federal marketplace to health plans, are still preventing successful enrollments on the health payor end. While the numbers have substantially improved from October, they are still ranging between 5 and 10 percent, leading to several failed enrollments.
Unfortunately, these issues have existed for way too long, with no major improvements toward resolving this matter. A plan to build a reconciliation system, a system that resolves this discrepancy in data, is in the pipeline. As and when it goes live, the health plans will receive notifications and electronic files with potentially thousands of enrollment records, which they will have to integrate into their system. In January, this number will go up dramatically, adding excessive overhead for health plans. Also, there is no means to issue the payment subsidies to health plans for those applicants who have applied for subsidies on the online marketplace. Again, this is going to add heavy overhead for health plans. In a nutshell, there is a lot that needs to be done to the backend of the federal marketplace, and time is running out.
Government’s Action Plan
While the administration is working night and day to fix these backoffice issues and drive up enrollments, their approach has to be thought through. The quicker the backoffice issues get fixed, the better the enrollment numbers will be, and, thus, lower the problems for health plans will be. Ideally, the next step for the government should be to weed out the backoffice problems from the federal health insurance marketplace completely.