Bloomberg News

Obamacare Website Flaws Imperil President’s Activist Agenda

October 26, 2013

Obamacare Website Flaws Imperil Activist Agenda President Backs

President Barack Obama leaves after talking about the error-plagued launch of the Affordable Care Act's online enrollment website in the Rose Garden of the White House on Oct. 21, 2013. Photographer: Chip Somodevilla/Getty Images

The rocky debut of the insurance exchanges at the heart of President Barack Obama’s health-care law poses risks to his political agenda and the activist role for government that he has championed for his second term.

White House officials say they expect a surge in online enrollment to begin in mid-November, meaning the administration may have only about three weeks to fix the flaws before negative public perceptions about the new program begin to harden.

“This is your signature program, and you’re marching it onto the field and everybody stumbles,” said Peter Hart, a veteran Democratic pollster. “It’s hard to see competency, and it puts a giant question mark behind the future plans.”

Some Republicans have called it a Katrina moment, likening the health-care rollout to President George W. Bush’s botched response to the 2005 hurricane that ravaged the Gulf Coast and led to more than 1,800 deaths.

Bill McInturff, a Republican pollster, says Obama has time, possibly even months, to fix the snags before suffering lasting political damage from the initial performance of the website.

The public isn’t likely to hold early difficulties with the Patient Protection and Affordable Care Act against Obama if they fade quickly, said McInturff, who consulted with the Bush administration on the Medicare prescription-drug rollout.

“There’s some tolerance in the beginning,” he said. “In general, people are not shocked that you can have some problems as a major new federal program gets off the ground.”

Addressing Issue

Obama -- whose second-term woes also have included Edward Snowden’s disclosures of National Security Agency telephone and Internet surveillance and opposition to his request to use force in Syria -- has moved to address the insurance-signup issue.

The president appeared in the White House Rose Garden on Oct. 21, days after the conclusion of the government shutdown, to promise action. He drafted Jeffrey Zients, a health-care entrepreneur whom he had already chosen as his next top economic adviser, to help mend the electronic marketplace.

Zients told reporters on a conference call yesterday that the federal exchange, healthcare.gov, will be fixed by December. Ten Democratic senators led by Jeanne Shaheen of New Hampshire called on the Obama administration to extend the health law’s first open-enrollment period, now scheduled to end March 31.

Sentiment Shift

Public skepticism about government competence drove the political shift from Lyndon Johnson’s Great Society programs of the 1960s to Ronald Reagan’s limited-government philosophy in the 1980s, said David Osborne, co-author of “Reinventing Government.”

The perceived failures that reshaped public sentiment lasted for years and had a far-reaching impact on society: the Vietnam War, urban race riots, soaring crime rates, failing public schools and then-President Jimmy Carter’s inability to rein in inflation, said Osborne, a former adviser to then-Vice President Al Gore. He said he doesn’t think the issues with the exchange rise to that threshold.

For Obama, the health-care law is the centerpiece of a first-term program that included an $830 billion economic stimulus, ramped-up support for clean-energy production, and the most far-reaching financial-regulatory law since the Depression.

He has set an expansive second-term agenda that includes a revamp of immigration policy, action to control climate change, greater access to pre-kindergarten education, and a boost in infrastructure spending. Much of that agenda has been impeded by the Republican-run House and the deadlock over taxes and spending that led to the 16-day federal government shutdown.

First Impression

Americans’ initial impression of the online health-care exchanges hasn’t been good. Twenty-nine percent say they are working very or fairly well while 46 percent say they aren’t, according to a Pew Research Center poll conducted Oct. 9-13.

The federal website was hobbled by software errors and overwhelmed by higher-than-anticipated consumer demand after it opened on Oct. 1. About 8.6 million people visited the site in the first week, running into long waits that kept many from registering to check out insurance options.

At one point, the online exchange posted error messages in at least 24 states. Independent, state-run web sites have seen fewer waits and flaws.

Lawrence Summers, Obama’s former top economic adviser, voiced concern Oct. 24 at a conference hosted by the Center for American Progress, a research group that advocates a greater federal role in addressing social issues. The website’s flaws won’t help “if we want to renew confidence in the public sector,” Summers said, according to Slate magazine.

States Succeed

Several states running their own exchanges have reported fewer issues than the federal marketplace, which was designed for states that didn’t set up their own version. Many Republican governors refused to do so because they opposed the program.

Massachusetts, which has operated an exchange since 2006 and revised its system to comply with the federal law, saw 23,025 applications for insurance started since Oct. 1 and 7,592 completed, Jason Lefferts, a spokesman, said Oct. 24.

California, the most-populous state with an economy that would be the world’s ninth largest if it were a country, embraced the law and established a state exchange. More than 125,000 insurance applications were started as of Oct. 19, according to a statement from the exchange, Covered California.

Nonetheless, Michael Gerson, a former chief speechwriter for Bush, said the federal website’s flaws have “potent symbolism” with voters because they are “right at the point of interaction” with the government in the president’s signature domestic initiative.

The exchanges are administered by government, though the insurance sold on them is issued by private companies.

‘Inherent Fear’

“It’s going to add to an undifferentiated skepticism of government action on a vast scale,” Gerson said. “Americans have an inherent fear of take-a-number-and-wait medicine. This website is the embodiment of take-a-number-and-wait medicine. You don’t even get a number and you have to wait.”

Gerson drew a parallel with the political importance some state governors have placed on improving customer service at motor-vehicle facilities because that’s a common direct experience voters have with government.

Former Indiana Governor Mitch Daniels, a Republican, demanded biweekly reports on the average time customers had to spend at the state’s Bureau of Motor Vehicles, according to spokeswoman Shelley Triol.

“There’s a reason they do that,” Gerson said.

Doubting Government

Hart, the Democratic pollster, said he expects to see the experience of the federal exchanges highlighted by Obama critics as another reason to doubt government’s capacity to deliver. That could include the president’s proposed revamp of immigration law to allow a pathway to citizenship for undocumented workers in the U.S., he said.

“You can see how the opposition will take this and extend it to immigration and other programs,” Hart said. “If you can’t sign up people who blah, blah, blah, we’re talking about 12 million people who are roaming this country illegally.”

Democratic supporters of Obamacare argue that the public will consider the insurance plans a good value once the system is up and running. Former Republican National Committee Chairman Haley Barbour and other critics predict the opposite.

Barbour said the issues with the website were reminiscent of the Bush administration’s response to Hurricane Katrina because it suggests “large-scale incompetence.”

Boosting Obama

Bolstering the Obama administration’s reputation for competence are the killing of al-Qaeda leader Osama bin-Laden under the president’s watch, the recovery of the economy from the 2008 financial crisis and withdrawal of U.S. troops from Iraq, Hart said.

Forty-nine percent of Americans said Obama is “able to get things done” in a Pew Research Center poll taken in May. That’s comparable to the 50 percent who described Bush that way in July 2005, just before Katrina, though lower than 64 percent for President Bill Clinton in August 1997, when the economy was expanding at a more than 5 percent pace.

While the federal online exchange is one of the most visible components of Obamacare, only a minority of Americans is likely to have direct experience with the site, Hart said.

Just 25 percent of the U.S. population is either uninsured or covered through individual health policies -- the group most likely to shop for insurance on the exchanges. The rest already receive insurance through either an employer, Medicare, Medicaid or other government program, according to 2012 data released last month by the U.S. Census Bureau.

Easy Use

Even among those who shop through online exchanges, many won’t use the federal website. Fourteen states, including such heavily populated ones as New York, have insurance marketplaces run by their own governments.

Avalere Health, a consulting firm in Washington, projects that 33 percent of enrollments in the Obamacare plans during the first year will be processed through state-run exchanges.

That may be one reason why many people report satisfactory experiences with online exchanges even with the federal website’s woes. Among those who said they have visited an online exchange, 56 percent said the website was very or fairly easy to use, according to a Pew poll conducted Oct. 9-13.

McInturff, the Republican pollster, said Americans’ views on the role of government in recent years have been in a “steady state” that will be difficult to disrupt.

Responses have fluctuated within a narrow band in a Wall Street Journal/NBC News poll that has asked 14 times since Obama took office whether government “should do more” or “is doing too many things,” McInturff said.

In February 2009, as Obama took office in the middle of the economic crisis, 51 percent said government should “do more” versus 40 percent who said it’s doing “too many things.”

In the most recent poll, taken Oct. 7-9 during the partial government shutdown, 52 percent answered “do more” and 44 percent “too many things.”

By comparison, in December 1995, when Clinton and Republican House Speaker Newt Gingrich were battling over the federal budget, 32 percent said government should do more against 62 percent who said do less.

To contact the reporter on this story: Mike Dorning in Washington D.C. at mdorning@bloomberg.net.

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net.


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