Timothy B. Lee passes along the above chart illustrating how complicated the Obamacare system is:
If the exchanges were just insurance marketplaces, getting them to work might have been a lot easier. Much of the complexity comes from the fact that the exchanges are used to administer the complex system of subsidies the Affordable Care Act provides to low-income consumers. Figuring out whether a customer is eligible for a subsidy, and if so how much, requires data from a lot of federal and state agencies.
A reader argues – persuasively to me – that the system could have been much simpler:
David Auerbach does a good job describing the poor execution of the federal exchange, and I’m sure there’s more of this kind of investigation to come. But the federal government also made an infinite number of policy decisions, and one of those is, perhaps, the original sin of the design. They decided, very intentionally, not to allow window-shopping.
The administration knew that letting consumers shop anonymously and look at what is available, including the general price ranges, was an important factor. However, they also knew that the federal subsidies reducing those ultimate prices would be a vital enticement. They decided that letting consumers know about the subsidies was the more important policy. But to make that happen, the site would have to require people to actually sign into a formal account, provide financial and other information, and only then proceed to the products available to them. That is a very intensive technological process, particularly in light of privacy concerns, and is a considerable part of the problem most consumers are having to suffer through. The benefit is that once through the application stage, they will know not only what products are available, and at what price, but also that they will get a subsidy if the information they’ve provided qualifies them for one.
Placing the subsidy as the primary policy goal came at the expense of allowing people to enter a few basic pieces of information anonymously (age, family structure, zip code, say) and simply explore the options and general prices. If they see something attractive, they can then either go into the application process at that point, or come back to it at a more convenient time (since no one needs to sign up immediately for coverage that won’t begin until January 1 at the earliest). That would have virtually eliminated the front-heavy technology that was enormously hard to manage, and was predictably glitch-prone. Anonymous shopping is far easier to design and implement, makes for a better consumer experience, and allows people more time to gather the necessary (and necessarily complicated) information they must have when they are finally ready to actually buy health insurance.
The problems in execution are blameworthy, but it is more than fair to hold the administration’s feet to the fire over their policy decision to prioritize subsidies over shopping. State-based exchanges had the same options available to them, and many chose shopping as the priority. Score one more for the wise decision in the ACA to let states take the lead in health care reform, and one more shake of the head at the states who chose to let the federal government do the job rather than doing it themselves.
When is Kathleen Sebelius going to be fired?