Some states are running their own websites and enrolling a lot of people. State successes show ACA can work

With all the waves of bad news about the Obamacare website and the canceled policies, it would be easy to conclude that nothing in this law will ever work — that it’s just too big and complicated and messy.

But that’s not the complete picture of the Affordable Care Act rollout. There are a few bright spots — just enough to suggest that, for all the early disasters, the law’s fate isn’t final yet.


There are states that are running their own websites and enrolling a lot of people, way more than the amateur-hour federal website that serves most of the states. Medicaid enrollment, another part of the law, is going significantly better than the signups for private insurance — nearly 400,000 people were determined to be eligible in October.

( Understanding Obamacare: POLITICO's guide to the Affordable Care Act)

And nationally, 1.5 million people applied for health coverage in October — suggesting that there’s a lot more potential interest than the 106,000 who got all the way through the federal and state Obamacare websites to select a private health plan.

So what do the bright spots tell us about the future of Obamacare? They certainly don’t tell us that the rollout is going well. But they do suggest that it’s not impossible for the law to work, health care experts say — because if it really were impossible, it wouldn’t be working anywhere.

In other words, the Obamacare rollout that we’ve all seen is not the story of a fatally flawed law. It’s a story of incompetence.

That’s probably not the talking point the White House is looking for. But it does suggest to health care experts that if the federal HealthCare.gov website ever does get its act together, there’s more potential for success in achieving the main goal — expanding health coverage to millions of Americans who couldn’t get it before — than the early numbers suggest.

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“What we’re seeing is what’s possible under the Affordable Care Act,” said Alan Weil, executive director of the National Academy for State Health Policy. “The question is, how long will it be before we see those possibilities?”

In California, nearly 80,000 people had selected private health plans as of Nov. 19 — way beyond the 27,000 people who had picked private health plans in October through the federal website that serves 36 states. In New York, more than 76,000 had enrolled as of Nov. 24, including roughly 41,000 in private health plans and 35,000 in Medicaid. Enrollment has been also been going smoothly in Washington state and Connecticut — and even in Kentucky, Mitch McConnell’s home state, where Democratic Gov. Steve Beshear has been a vocal advocate of the law.

Only 14 states and the District of Columbia are running their own health insurance exchanges, so the law can get only so far with their efforts. But the lesson of these states’ early successes is that “where a state wants to make this work, it looks like they can,” said Peter Lee, executive director of Covered California, the state’s health insurance exchange.

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Elaine Kamarck, a former adviser to Al Gore who worked on the “reinventing government” project in the Clinton administration, says that even at the national level, it shouldn’t have been impossible to build a functioning health care website. Despite all the federal government’s IT procurement problems, “the federal government does technology fairly well,” she said — from the advanced electronic surveillance capabilities of the National Security Agency to the rovers NASA sends to Mars.

The real lesson of the rollout, Kamarck said, is that the Department of Health and Human Services broke every rule for managing a big technological project well — and the successful states didn’t.

The three basic rules for launching a successful government tech project, Kamarck said, are to give one person the power and responsibility to supervise the entire project; build and test the technology repeatedly, since everyone knows websites crash; and create an environment where people feel free to give the boss bad news.

“Somehow, every rule of managing technology in government was broken with this website,” said Kamarck, who’s also the founding director of the Brookings Institution’s Center for Effective Public Management.

The bright spots don’t erase the other unpopular tradeoffs that Americans are discovering with the law — they’ll still be furious over canceled policies and whatever other nasty surprises are around the corner.

And there won’t be any end to the debate over whether the law has basic problems that can never be overcome. Lanhee Chen, Mitt Romney’s former policy director and now a research fellow at the Hoover Institution, says he believes the law is fundamentally flawed — even if a few states do well with it — because the conditions for success are too narrow to work across the country.

“There are going to be states where they won’t get help from state regulators. They’re not going to get that promotional push to get people enrolled,” said Chen. “The fundamental flaw in the law is that it requires people to be enrolled who don’t want to be enrolled.”

The successes also don’t even mean every state is doing well. Maryland, a blue state that was determined to be one of the leaders in implementing Obamacare, is still struggling with its website. Oregon’s website has never worked and hasn’t signed up a single person, according to Reuters. Hawaii’s is barely bumping along.

But the states that have made their own health insurance exchanges work — so far — show it can be done. And they offer some general lessons about what works and what doesn’t.

One rule of thumb is: Less is more. In Connecticut, officials racing to meet the deadline got rid of some of the bells and whistles they wanted on the website, like automated systems for granting the hardship exemptions people can get from the law’s individual mandate, according to Kevin Counihan, chief executive officer at AccessHealthCT, the state’s health exchange.

“We made the decision … that we would lose 30 percent of the functionality we wanted and focus on the other 70 percent to make sure we could do it well,” said Counihan. “We can’t be all things to all people, so what can we live with?”

The successful states also made two crucial decisions: They used existing technologies built by experienced vendors, and they put the outside contractors in charge of the project rather than trying to integrate all the systems themselves, according to Dan Schuyler, director of exchange technology at Leavitt Partners, a consulting firm that has been working with the states.

By contrast, HHS “decided to build [the federal website] from the ground up and manage it internally, and those were two fatal errors,” said Schuyler.

A supportive political climate definitely helps, and that’s something that’s not available in all the states — certainly not in the ones that took a pass on building their own health insurance exchanges.

“We are not swimming upstream against politicians and advocacy groups that are spreading a campaign of misinformation,” said Lee of Covered California. In the more than 30 states that refused to build their own health insurance exchanges, “they said, ‘let’s try to kneecap the ACA by not participating,’” he said.

Donna Frescatore, executive director of the New York health exchange, said the effort there has benefited from the support of Gov. Andrew Cuomo, a focus-group-tested ad campaign, and a “high level of engagement” from insurance agents and brokers. It also doesn’t hurt that, because of New York’s unique rules — which used to guarantee coverage to sick people with no individual mandate to pull in the healthy people — premiums will actually go down under Obamacare.

But picking the right vendors also helps. It’s not clear yet which ones had the best overall track records. But of the best-known successful states, California used Accenture as their main contractor, New York gave the job to Computer Sciences Corp., and Kentucky, Connecticut and Washington state all used Deloitte, according to a list compiled by the Avalere Health consulting firm. (By contrast, Hawaii’s main contractor was CGI — the same firm that took the lead on HealthCare.gov.)

“States that started early had an advantage, and the states that picked the right vendors — whatever those are — had an advantage,” said Dan Mendelson, Avalere’s chief executive officer and founder.

Of course, the states also had the advantage of being able to work on a smaller scale than HHS ever could with the federal website. In Kentucky, health exchange executive director Carrie Banahan noted, the Deloitte contractors are right down the hall — “so if there’s a problem, we can just go ask them about it.”

But the states that are doing aggressive outreach also are finding that it makes a difference. California is spending $37 million on outreach and education grants and is running TV ads in Cantonese, Mandarin, Korean and Vietnamese to reach the state’s substantial Asian population.

A lot of the early enrollment has been in Medicaid, not private health insurance. In Washington state, for example, 98,000 people had enrolled through its Obamacare exchange as of Nov. 14 — but only about 12,000 of those picked private health insurance plans. The rest will be in Medicaid, including 47,000 people who will get the expanded coverage next year and 40,000 who qualify under the old, pre-Affordable Care Act rules.

That’s not surprising, health experts say, and the lesson is pretty simple: Medicaid enrollment is going faster because it’s easier. Under Medicaid, you either qualify or you don’t. If you’re eligible, they just sign you up. You don’t have to choose from a variety of health insurance plans, and there are no complicated calculations to figure out whether you get a subsidy. And you don’t have to pay your first premium before you’re officially enrolled.

“Medicaid is an established program. The states know how to enroll people,” said Mendelson.

That doesn’t mean the Affordable Care Act can be considered a success on Medicaid alone — the private health insurance signups will have to catch up. And that will either have to happen through a patched-up federal website, through workarounds, or both.

But the bottom line is that if the technicians working on HealthCare.gov can fix it up with enough duct tape, there’s potential for the rest of the nation to end up with enrollment numbers that look more like the successful states, said Drew Altman of the Kaiser Family Foundation.

“That should, in the long term, reflect the norm, not the exception,” said Altman. “If California can do it, if Kentucky can do it, other states can do it, too.”