- The Washington Times - Thursday, October 3, 2013

The Obama administration’s health care rollout may have been rockier than expected this week because so many states refused to cooperate, leaving the federal government to run far more exchanges than initially planned, according to analysts studying the Affordable Care Act.

And the intense interest from researchers, journalists and market analysts actually may be preventing some customers from being able to access the websites set up to help consumers navigate the health exchanges.

“Every insurance company in the country wants to know what everyone else is doing,” said Dan Mendelson, CEO of Avalere Health, a Washington-based advisory company.


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Three days after the exchanges went live, reports continued to surface of major interest from potential customers, but also of technical glitches the federal government said it was working to correct.

As written, the Affordable Care Act allows states to choose whether to set up their own exchanges or have the federal government do it for them.

Congress and the administration had anticipated most states would want to craft the market to their residents’ needs.

But that didn’t happen.

Instead, 34 states opted to let the federal government run all or part of their exchanges, funneling residents of those states to one federal website.

That site, HealthCare.gov, sent visitors to a “holding page” message due to heavy volume. The portal is supposed to let users without employer coverage apply and shop for coverage — often with the help of income-based subsidies — or direct users to state-run exchanges in 16 states and the District of Columbia.

Meanwhile, state-run exchanges have reported success stories.

“The state sites are up and running,” Mr. Mendelson said.

Visitors to Kentucky’s exchange, Kynect, had started 11,000 applications for coverage as of Wednesday. Officials attributed its relative success to keeping all operations within one agency and its long-standing infrastructure.

“We were able to incorporate IT resources we already had within our state, and also designed the system to allow us to scale up or down in terms of processing power without having to take the site off-line,” Kynect spokeswoman Gwenda Bond said.

Kentucky is notable, because it is the only state in the South that decided to set up its own exchange.

Many of the states that deferred responsibility for the exchange to Washington were led by Republican governors or lawmakers, who, after the defeat of GOP presidential nominee Mitt Romney in November, decided to let the Obama administration accept the responsibility or potential fallout from setting up Obamacare.

The issue has produced unintended consequences, including political debate and lawsuits over language in the law that suggests government subsidies should only go to consumers who use an exchange established by a state.

Jonathan Gruber, an MIT professor who worked on Massachusetts’ pioneering health care reforms before helping the Obama administration, said the state-based decisions might have contributed to the overwhelmed federal website.

“On the other hand, if these states had done it themselves without being fully invested, they probably would have done a bad job and that could be even worse,” he said.

Mr. Mendelson said the federal government also might have underestimated the number of interested parties who drove up Web traffic because they want to check out the new program.

The Department of Health and Human Services said its system works and capacity is improving by the hour, but it has not released any figures on enrollment to back up its assertions that millions are flocking to the sites because they are hungry to enroll in coverage.

That makes it difficult to parse actual customers from interested parties who simply wanted to click around the enrollment website.

“The demand here is because people want to understand the marketplace,” Mr. Mendelson said.