Front-End HealthCare.gov Problems May Be Masking Bigger Back-End Problems

Quickly fixing Obamacare's most visible problems could be a disaster for the health care law.

By now, pretty much everyone knows that HealthCare.gov, the main portal to access the law's new insurance exchanges, doesn't work. When the site first launched, hardly anyone could create an account to begin shopping for coverage. And though the registration problems have gotten better, enrollment is still an uphill climb.

The site's disastrous front end has overshadowed another set of serious problems on the back end. Insurance companies say they're seeing widespread errors in the trickle of applications they do receive through the exchanges.

And until those errors can be fixed, it might be best to leave enrollment at a trickle.

"Is CMS stupid enough to fix the front end of this thing before they fix the back end?" asked Bob Laszewski, a health care consultant who works closely with insurers.

(Jeffrey Zients, the former White House budget director who's been assigned to the HealthCare.gov recovery effort, later on Friday said the site would be operating smoothly by Nov. 30 and that back-end issues topped on the repair team's punch list.)

In Laszewski's view--and he's hardly alone--the fact that users can't easily log in to HealthCare.gov is a blessing in disguise. Sure, it's a political and public-relations headache for the White House, but leaving the back-end problems unchecked could be a bigger one.

Insurance companies are seeing a range of errors in the applications they receive through HealthCare.gov. One anecdotal report said a man showed up as having three spouses, two of whom were actually his dependents.

Insurers also say they've gotten an enrollment, followed by a cancellation, followed by another enrollment. They don't know why, and in some cases, the various documents don't have time stamps--so the insurance company doesn't know which is the most recent and, presumably, the accurate transaction to process.

CGI, the contractor that built most of HealthCare.gov, downplayed the back-end errors during a congressional hearing Thursday.

"We have uncovered a number of those scenarios--not significant--but a number of them. … Most of them are isolated, not across the board for all insurers," CGI's Cheryl Campbell said.

But an insurance industry official said the problems are actually much more widespread than Campbell indicated. Insurers simply don't have much confidence in the data they're getting, even the applications that don't contain obvious errors.

Laszewski questioned whether CMS is truly working overtime to fix the site's front-end problems, in which case "they're about to flood the insurance companies with crummy data," or quietly letting the sign-up problems linger to help identify and fix back-end errors.

The latter would be the smarter move, he said, but it would also be an acknowledgement of serious problems in the enrollment process.

"They're either really stupid or they're smart. And if they're smart, this is de facto shut down," he said.

Right now, the flow of new enrollees from HealthCare.gov is so slow that insurance companies can monitor applications by hand, tracking down inconsistencies one by one. But if hundreds or thousands of people start to come through the system, insurers won't be able to keep up--and they could end up getting the blame from angry customers for problems they didn't cause.

Insurers also don't yet know the extent of the exchanges' bad-data problems.

HealthCare.gov batches and sends over all of its enrollments every night. But only two of the state-run exchanges (which total 14, plus the District of Columbia) are submitting enrollments to insurance companies; the rest are holding off until at least Nov. 1, while they continue to test their own systems.

States are giving each insurer a sense of how many people signed up for each plan, but the companies don't know who their new customers are--whether they're the young, healthy consumers insurers covet, or older, sicker enrollees who are more likely to file expensive claims.

Chris Clark, the technology program manager for Kentucky's state-based exchange--widely considered one of the best in the country--said the state and insurance companies agreed early on to a delayed submission process. Kentucky is still testing the accuracy of the enrollment forms it will submit to insurers.

"We're very confident that that process is going to work smoothly," Clark said.