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HealthCare.gov's Missed Opportunity: Private Online Insurance Brokers Still Left Out

BY Alex Howard | Tuesday, February 25 2014

Nearly five months after the troubled launch of Healthcare.gov, private online health insurance brokers are still not selling plans eligible for subsidies under the Affordable Care Act directly to consumers over the Internet, even though the mammoth law explicitly mandates that option. While consumers who aren't eligible for subsidies can use the online alternatives to Healthcare.gov, like eHealthInsurance.com, GetInsured.com and GoHealth.com, just as they have been able to do for years prior, a key component of the Obama administration's efforts to get people insured still isn't working quite right.

Such brokers, classified as "Web-based entities" (WBE) by the United States government, have been chafing at the delays.

"We have the data necessary, but the integrated user experience does not meet eHealth’s standards for stability and usability," said Sam Gibbs, senior vice president of eHealth, a private online brokerage. "Because of this, eHealth is currently not enrolling subsidy-eligible consumers in qualified health plans via healthcare.gov and will not until these standards are met."

While senior officials in the Obama administration confirm that efforts to provide what they need continue, the time to provide necessary technical support to directly sell subsidized plans before the window of open enrollment closes at the end of March is drawing short.

The Center for Medicare and Medicaid Services (CMS) confirmed that they have entered into over 30 agreements with web-brokers to providedirect enrollment, as of December 2013, and have continued to do so on a rolling basis for somelarge insurance companies. CMS also confirmed to me, however, that such brokers cannot directly access the data hub that powers both the state and federal marketplaces, for legal reasons related to data governance at the IRS.

If the Obama administration can quietly meet the stability requirements of eHealth and other WBEs, they'll have engineered a crucial strategic win. Enabling private brokers to sell ACA plans to consumers concerned about security, frustrated by errors or discouraged by negative media coverage of Healthcare.gov would still matter, particularly to young consumers on mobile devices. (The federally facillitated marketplace in Healthcare.gov is not particularly mobile-friendly.) If not, the inability of federal government officials and contractors to find a way to do better by the third-party websites will be added to the annals of the winter's IT failures. It would be, as CNBC aptly called it, adirect enrollment flop.

As ever, historical context for how long it can take to get such massive initiatives working well is worth adding. Previous major federal government health programs have faced struggles at the outset, from the troubled beginning of the Medicare Part D prescription drug benefit last decade to the launch of Medicare itself, in the 1960s. If the White House does carry through on a long-term vision for a system built on open standards and an ecosystem of providers, it will matter, but… oh, what might have been.

One of the bitterly ironic lessons from the failed launch of the Healthcare.gov marketplace last October is that the tech-savvy Obama administration could not only have created a fallback option if the federally-facilitated marketplace wasn't ready for launch -- and it famously wasn't -- but pursued a strategic option that didn't require the development of a massive end-to-end solution at all.

Imagine if, on October 7th, 2013, when the Obama administration finally acknowledged to the New York Times that theissues with Healthcare.gov went beyond the surge of traffic created by marketing and consumer interest, the paper of record also published the following list of other websites (provided by CMS) where consumers could go online to shop for insurance, calculate subsidies and get enrolled:

Afford Health Technologies, Amerilife (ACA Insurance), Benefinder, CBC Insurance, Connected Health, Corporate Benefits Concepts, Inc (MyHealth), CS Strategy, eBix, eHealth, FUSE Benefits, GoHealth, Health Compare Insurance Services, Inc, HealthPlanOne, Insphere Insurance Solutions (SureBridge), Insure Monkey, InsureXHealth (Flexible Benefit Service Corporation), Intuit, IOIX, JLBG Health, KSS Insurance, Maxwell Health, Messer Financial, Mutual Med, MyInsuranceRates.com (Leadco Insureco), Navix, One Exchange (Extend Health), Plan Matcher (User Health Systems), Quotit Corporation, RxHealth (Connecture), The Insurance Center (TIC), U.S. Exchange Management, URL Insurance, and Vimo (Getinsured.com).

When the New York Times ran a subsequent story reporting that the crashes at Healthcare.gov were the result of poorly crafted software , the administration could have pointed to millions of people who had lost insurance getting enrolled through these options.

While the failed launch continued to hamper the administration throughout the fall and winter, successful enrollments around the country would have written their own narrative: despite the spectacular failure of health insurance exchanges in Minnesota, Massachusetts, Oregon and Maryland , private online health insurance brokers enabled by the administration would have picked up the slack and get consumers on the rolls.

These Web-based entities have, after all, been successfully leading consumers through the process of buying insurance over the Internet for many years, a process that's considerably more complex than shopping for new socks or plane tickets.

Obviously, that's not what happened. Instead, Greg Ferenstein published a post in late October at TechCrunch wondering why a tech-friendly administration had "screwed startups" and the Obama administration endured months of well-deserved criticism regardingwhat went wrong at Healthcare.gov, from bad management to poor technology choices and implementation, agency insularity and political sensitivity at the White House. We won't know how many consumers successfully direct enrolled through these brokers until public companies like eHealth report their earnings or otherwise disclose the data.

Some people deeply versed in health care policy had expected otherwise, predicting that WBEs would start selling the new plans created under the Affordable Care Act directly to consumers over the Internet last fall. The first United States chief technology officer, Aneesh Chopra, wrote an op-ed for VentureBeat in October 2013 regardingthe next chapter of Healthcare.gov, declaring that "the real story, likely to play out over the coming months, will be its rise as a new platform for innovation – one that will lead to the creation of new private sector services to improve our nation’s health."

In addition to existing private online brokers like eHealth and GetInsured, wrote Chopra, "a growing array of startups like Fuse Insurance and Gravie will offer more personalized recommendations," all of which would be "built on top of data from Healthcare.gov."

Given guidance from CMS for web-brokers issued last year, my expectation had been that many private Web-based entities would be able to enable consumers to browse and apply for insurance online, spreading out demand from Healthcare.gov. From page eight of the guidance:

"To the extent permitted by a state, beginning in October 2013, CMS intends to work with web-brokers that meet all applicable requirements to provide an alternate option to help consumers select QHPs [Qualified Health Plans] online. Web-brokers will provide an additional channel for Federally-facilitated Marketplaces to reach consumers and to help them enroll in QHPs. CMS is developing the capability to support integration between the web-broker’s website and the Federally-facilitated Marketplace’s website using secure redirect and application programming interface mechanisms. The application programming interface will allow a qualified individual to initiate his or her shopping experience on the web-broker’s website, connect securely to the Federally-facilitated Marketplace website to complete the eligibility application and determination process, and return securely to the web-broker’s site to compare plans and select a QHP."

In the summer of 2013, in fact, eHealth signed an agreement with CMS to operate a web-based entity which seemed to provide for access to the federal government's data hub which would enable eHealthinsurance.com to authenticate users and calculate eligibility for subsidies. From the press release:

"The FFE agreement just signed by eHealth and CMS allows eHealth to access the Federal electronic data hub, which is necessary for a determination of tax subsidy eligibility and the amount of a subsidy. It also provides for additional strict consumer- and privacy-protective requirements and standards beyond those spelled out in regulations. An additional agreement encompassing the federal requirements for agents and brokers will still need to be signed by eHealth and CMS in order for eHealth to begin enrolling subsidy-eligible individuals into qualified health plans made available by the ACA."

A statement provided to me this winter by the Center for Medicare and Medicaid Services, which operates Healthcare.gov, reset my expectations: "IRS regulations prohibit third party sites (such as those of web-brokers) from accessing Federal Tax Information. Consequently, this limits the ability to seamlessly integrate the eligibility application as part of the shopping experience on a partner website. Also, the process for determining eligibility for Advanced Premium Tax Credits, and Cost Sharing Reductions currently involves a complex user interface workflow that is best implemented by the Federal Marketplace. Therefore, a consumer trying to enroll in a qualified health plan through a partner website currently needs to be transferred to the Federal Marketplace to submit an eligibility application."

In plain English, that means that private insurers have to transfer consumers over to Healthcare.gov to complete the authentication, eligibility and subsidy calculation process, as opposed to a seamless experience on the third party's website. Today, here's how the experience for consumers works:

  • Browse and compare insurance plans at the broker's website (WBE).
  • Create an account with the WBE.
  • Securely connect to the marketplace (what consumers think of as "Healthcare.gov") to determine eligibility for subsidies.
  • Go back to the WBE and choose a qualified health plan.
  • Complete an application, which results in an enrollment form going from WBE to the insurer.

At launch in October, the federal government had not found a way to securely provide such access directly to private Web-based entities, for both regulatory and technical reasons. As a result, eHealth and other entities were not getting access to the data hub. Months later, that's still the case, with the open enrollment window closing fast, despite pressure from eight Democratic U.S. Senators to provide an alternative.

"eHealth received necessary information and test environment from the Federal government in late September, right before open enrollment and began the integration process at that point," said Gibbs. "Due to Healthcare.gov’s delays and technical issues throughout October and November, eHealth was not able to begin rigorous testing of this web-based entity implementation until Healthcare.gov’s technical problems were adequately addressed from the government’s side. eHealth reviewed the fixes (in late November) to healthcare.gov and continues to work closely with CMS to implement a Web-based enrollment solution that would allow us to enroll qualified individuals into subsidy-eligible plans through healthcare.gov."

In early December, according to Gibbs, eHealth was able to enroll a small number of subsidy-eligible customers using its Web-based integration withhealthcare.gov. "The company is actively documenting and working closely with the federal government to address, but because the issues lie outside of the eHealth domain, it cannot control the timeline for resolution," he said. "Additionally, the company cannot ensure that these issues will be resolved in any specific timeframe."

The current state of affairs, characterized by a mostly functional Healthcare.gov with unknown security issues and a languishing third-party ecosystem, is the result of limited resources, time and strategic choices by the administration. The "tech surge" team that performed a near-miracle in getting Healthcare.gov operation prioritized the function of the federal website, including the data hub that drove it, not enabling 3rd parties in industry to use it. Given the performance issues at Healthcare.gov, the data hub simply may not have been able to handle the load -- and without full access to that data, the private online health insurance brokers that were supposed to help Americans enroll in Obamacare plans have been stymied.

The fact that CMS has reportednearly 2 million people have been able to sign up for health insurance through the federal marketplace after the "big fix to Healthcare.gov" is not a result that many skeptical observers expected from the "tech surge," from venture capitalistMarc Andreessen toyours truly.

Health and Human Services Secretary Kathleen Sebelius testified in Congress in December about the ability of online entities to directly enroll consumers, noting that people "sitting in an office with a broker, can do it with the E-HealthInsurance folks."

The trick is that such entities can only do so for people that are not eligible for subsidies, a key aspect of the Affordable Care Act. Today, consumers that do not qualify for subsidies may even be better served through such private brokers than the government's website, given nagging Healthcare.gov security concerns.

Authenticating consumers, confirming their incomes, calculating subsidies, leading consumers though applications, and completing and securely transmitting enrollment forms are the functions that differentiate Healthcare.gov from sites like HealthSherpa.com. They require secure access to government agencies through the so-called data hub -- and that's almost certainly at the heart of why getting these private brokers selling plans has been delayed. Over time, that will likely change, which is one reason that senior officials describing a vision for an eventual ecosystem of third-parties providing digital services based upon open standards is intriguing. Whether it comes to pass under this administration is a chapter of history yet to be coded.

Alexander B. Howard is currently a fellow at the Tow Center for Digital Journalism, at Columbia University ow Center for Digital Journalism at Columbia University and a fellow at the Networked Transparency Policy Project at the Ash Center at Harvard University.