Insurers brainstorm with Obama staff on health exchange fix

Back to TopCommentsE-mailPrintBookmark and Share

The heads of WellPoint Inc., Aetna Inc. and at least 10 other insurers met with the Obama administration Wednesday to discuss correcting flaws in how data from the U.S. health-care marketplaces is transferred to the companies.

“Alpha teams” of technology workers at the insurance companies and in the government “are working side-by-side to correct challenges,” the White House said Wednesday in a statement. The administration didn’t provide additional details about the meeting, which included Health and Human Services Secretary Kathleen Sebelius and White House Chief of Staff Denis McDonough.

“The CEOs were able to provide an on-the-ground perspective of how open enrollment is proceeding,” said Robert Zirkelbach, a spokesman for the insurance lobbying group America’s Health Insurance Plans, whose CEO attended the meeting. “The participants discussed the ongoing technical challenges in the federal marketplace and what needs to be done.”

The online exchanges, where people can buy private health plans with government subsidies, represent a potential windfall for insurance companies of $205 billion a year in added sales by 2021, according to a PricewaterhouseCoopers LLP report last year. Insurers, though, have raised alarms about faulty data from the federal website since it opened Oct. 1 as part of the Patient Protection and Affordable Care Act of 2010.

“We have a common goal of increasing access and affordability for health care,” WellPoint CEO Joseph Swedish told analysts on a conference call prior to Wednesday’s White House meeting. While the exchanges have had a “choppy” opening, WellPoint “remains optimistic” about the long-term.

Swedish, who runs the second-largest U.S. health plan attended the meeting, as did Mark Bertolini, the CEO of No. 3 insurer Aetna Inc., according to the White House. The chief executive officers of Humana Inc., Health Net Inc., Centene Corp. and Kaiser Permanente also were listed as having attended.

The exchange website’s flaws have made it harder for people to enroll in health plans, marring its debut and giving critics ammunition to undercut the law called Obamacare by detractors and supporters alike. The failures may discourage young, healthy, web-savvy consumers whose participation is critical to offset the risk of insuring older, sicker people and to keep the program sustainable.

Shares in Indianapolis-based WellPoint, which covers 35.5 million people, fell 3.3 percent Wednesday to close at $85.48 each, and other carriers slipped as well. Swedish declined to give specific enrollment figures for the exchanges or a profit forecast for 2014, said Thomas Carroll, a Stifel Nicolaus & Co. analyst in Baltimore.

“Companies are being just ultraconservative with respect to assumptions on exchange enrollment, the composition of that enrollment and what kind of Medicaid expansion we’ll see,” Carroll said in a telephone interview.

WellPoint raised its profit forecast for 2013, citing lower medical costs and changes from the health law. The stock had jumped 45 percent for the year through Tuesday.

Obama Tuesday drafted his soon-to-be top economic adviser, Jeffrey Zients, to help fix the flawed federal website, healthcare.gov, which serves 36 states. Fourteen state-run exchanges, including those in California and New York, have performed better.

U.S. Sen. Jeanne Shaheen, a New Hampshire Democrat, asked Obama in a letter Tuesday to extend open enrollment beyond the March 31 closing date. She said that since some people have tried and failed to enroll, more time is needed to allow consumers additional opportunities to access the site.

Rep. Nancy Pelosi, the California Democrat who was House speaker when the health law was passed by the then-Democratically controlled Congress, said she doesn’t support Shaheen’s request.

“We should try to fix what we have, move forward with the deadline,” Pelosi said at a briefing Wednesday with reporters. “While there are glitches, there are solutions as well.”

Republicans, whose opposition to the law led to a partial government shutdown, are scheduled to hold two congressional hearings on the website over the next week. The administration has already changed the direction of its rescue work on the site, creating a hit list of upgrades it seeks to check off in the coming weeks while bringing in Zients and other advisers.

Swedish, on his call, said “there are some challenges going through the application and enrollment process. We knew there would be choppiness going in.”

Each night, healthcare.gov is supposed to send a batch of new enrollments to the insurers. Called “834 files,” the data have long been an industry standard in the private sector.

Some of the electronic files are being transferred with missing data or are corrupted to the point where they can’t be opened, according to Bob Laszewski, an insurance-industry consultant based in Arlington, Va., and Dan Schuyler, a director at Salt Lake City-based health-care consultant Leavitt Partners.

To fix the files, insurers have to go through them by hand. When thousands of people sign up, as the U.S. is hoping will happen before mid-December, it may create a large backup, the two consultants said in telephone interviews earlier this month.

The White House said Wednesday’s meeting addressed problems with the “834” forms and direct enrollment.

“To that end, we have worked with the insurers and the ‘alpha teams’ we jointly established made up of insurers’ technology experts and CMS technology experts, to iron out kinks in both the 834 forms and in direct enrollment,” the White House said in its statement.

In addition to Sebelius, the meeting was attended by Valerie Jarrett, a senior adviser to Obama, and Marilyn Tavenner, the administrator for the Centers for Medicare and Medicaid Services.

Public interest in the new coverage still “appears robust,” Swedish said. WellPoint got 35,000 calls at its service center during the first week after the exchanges opened, double its usual volume, the CEO said. Some 45,000 calls came in the second week.

WellPoint has enrolled customers through the federal exchange, he said, declining to give specific numbers.

Centene, which sells exchange plans in nine states, said Tuesday that some of the problems may be clearing up. While some issues remain, the St. Louis-based insurer is “not seeing enormous problems right now” with data quality, K. Rone Baldwin, an executive vice president, said on a conference call with analysts.

Centene has adjusted its expectations for early enrollment, seeing “more of a slow ramp as opposed to a big bang,” Baldwin said.

“There is still lots of time,” he said. Still, “as we get into November, it becomes a little bit more concerning.”


  • Duh....
    Can we get our money back from the original contractors? "Google Inc. (GOOG:US), Red Hat Inc. (RHT:US), Oracle Corp. (ORCL:US) and other technology companies are contributing dozens of computer engineers and programmers to help the Obama administration fix the U.S. health-insurance exchange website."
  • Who's most qualified
    Freaking good one John!
  • Who's most qualified
    Google and the NSA already have all our medical, social security, tax and demographic data on hand; and, they already have the IT infrastructure; so, why not task them to manage the portal and automatically register all eligible participants?

    Post a comment to this story

    We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
    You are legally responsible for what you post and your anonymity is not guaranteed.
    Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
    No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
    We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.

    Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

    Sponsored by

    facebook - twitter on Facebook & Twitter

    Follow on TwitterFollow IBJ on Facebook:
    Follow on TwitterFollow IBJ's Tweets on these topics:
    Subscribe to IBJ
    1. How much you wanna bet, that 70% of the jobs created there (after construction) are minimum wage? And Harvey is correct, the vast majority of residents in this project will drive to their jobs, and to think otherwise, is like Harvey says, a pipe dream. Someone working at a restaurant or retail store will not be able to afford living there. What ever happened to people who wanted to build buildings, paying for it themselves? Not a fan of these tax deals.

    2. Uh, no GeorgeP. The project is supposed to bring on 1,000 jobs and those people along with the people that will be living in the new residential will be driving to their jobs. The walkable stuff is a pipe dream. Besides, walkable is defined as having all daily necessities within 1/2 mile. That's not the case here. Never will be.

    3. Brad is on to something there. The merger of the Formula E and IndyCar Series would give IndyCar access to International markets and Formula E access the Indianapolis 500, not to mention some other events in the USA. Maybe after 2016 but before the new Dallara is rolled out for 2018. This give IndyCar two more seasons to run the DW12 and Formula E to get charged up, pun intended. Then shock the racing world, pun intended, but making the 101st Indianapolis 500 a stellar, groundbreaking event: The first all-electric Indy 500, and use that platform to promote the future of the sport.

    4. No, HarveyF, the exact opposite. Greater density and closeness to retail and everyday necessities reduces traffic. When one has to drive miles for necessities, all those cars are on the roads for many miles. When reasonable density is built, low rise in this case, in the middle of a thriving retail area, one has to drive far less, actually reducing the number of cars on the road.

    5. The Indy Star announced today the appointment of a new Beverage Reporter! So instead of insightful reports on Indy pro sports and Indiana college teams, you now get to read stories about the 432nd new brewery open or some obscure Hoosier winery winning a county fair blue ribbon. Yep, that's the coverage we Star readers crave. Not.