Obamacare = HTTP Error 404

October 14, 2013

By: Kelly Diamond, Publisher

For an administration that ran and won on being the most transparent, it’s quite a difficult task to get a simple breakdown of the expenses that went into building the most defunct website in modern times.  The U.S. taxpayer is apparently the proud “owner” of upwards of $500 million of poorly written code brought to them by Healthcare.gov.

Dysfunctional Costs

When I think about all the measures that could’ve been taken to avoid this nonsense, the one I inevitably keep coming back to (with the exception of never “deeming” this bill into law in the first place) is the bidding process.

Clearly, the fascistic company that received the contract to build Healthcare.gov is not qualitatively the BEST suited for the task.  They are not only responsible for the poorly written code, but even after a weekend of “cleaning things up”, the site still struggles to process those who successfully are able to access it.

The October 8^th Digital Trends article goes on to say, “The site itself, which apparently underwent major code renovations over the weekend, still rejects user logins, fails to load drop-down menus and other crucial components for users that successfully gain entrance, and otherwise prevents uninsured Americans in the 36 states it serves from purchasing healthcare at competitive rates – Healthcare.gov’s primary purpose.”

According to DigitalTrends.com, and the information they were able to scrape together, there is a conservative estimate of $363 million having been spent thus far on the build-out of Healthcare.gov.  This doesn’t include how Medicare and Medicaid will be looped into the overall site, nor the expected administrative costs.  If government education is any indication of how government health insurance is going to play out, then it is reasonable to expect that the bureaucratic and administrative costs are going to be considerable as well.

“According to CMS’s [Centers for Medicare and Medicaid Services] 2014 budget request, that agency spent more than $150 million in 2012 and 2013 in relation to the Affordable Care Act – a lowball figure considering that, in its 2013 budget request, the agency asked for more than $1 billion in additional funds ‘needed to support operation infrastructure’ and open-enrollment preparations of the FFEs [Federally Facilitated Exchanges].”

This brings Digital Trends’ estimate to something in the $500 million neighborhood.  That’s a lot of coin, for so few to join.  The GAO (Government Accountability Office) estimates about $2 billion to build-out and operate the FFEs in 2014.  Am I the only one who is befuddled by how such spending is meant to NOT add to the deficit?  That was the promise, after all. 

Dysfunctional Site

Glitchy as many of the social media sites and applications can be, their glitches pale in comparison to Healthcare.gov.  And so do their expenses!

• Facebook received its first investment in June 2004, operated for six years before surpassing the $500 million mark in June 2010.
• Twitter, created in 2006, managed to get by with only $360.17 million in total funding until a $400 million boost in 2011.
• Instagram ginned up just $57.5 million in funding before Facebook bought it for $1 billion last year.
• LinkedIn and Spotify have only raised $200 million and $288 million respectively.

Dysfunctional Law

Here’s a very obvious question that anyone with an intellectual pulse would be asking right about now: If the masterminds behind Obamacare can’t even get a website – whose only job is to enroll people in the FFEs – to cost efficiently get up and running, HOW in the world will they go about enforcing and further implementing this act? 

It would seem there are several dead ends that lead to fees and fines in this rat maze.  If I don’t buy insurance, I’m fined… by the IRS.  That money isn’t given to the exchanges to offset the costs, or compensate for my absence the year before.  It goes to the federal government.  If a nonprofit hospital (of which right now 60% of them qualify as nonprofits) provides free care, they could be fined up to $50,000 and/or be forced to change their status to for-profit… and that money, again doesn’t go to the exchange program or the insurance companies to keep costs low.

It would seem there is no incentive to hire!  Why would you if you become subject to Obamacare fines after 49 employees?  Why not just get contract workers instead?  Why not demote folks to part-time?

“If employers with 50 or more employees do not offer the right kind of health insurance, and at least one employee gets subsidized coverage on the exchange, they are faced with penalties of $2,000 per employee per year. Since the first 30 workers are exempt from the penalty, moving from 49 to 50 workers can cost an employer $40,000 a year.

“No wonder that many small businesses are opting to stay at 49 workers. If they decide to expand, they can use temporary workers or contract employees.”

And where’s the incentive to get or stay married?  Not that state sanctioned matrimony is the be-all-end-all… but at the same time, it’s cheaper for two single people to get insurance on the exchanges than one married couple.  It’s cheaper for a single mom to get insurance on the exchange than it is for that same woman to stay married to her spouse who gets employer based insurance.

“Under the Act, if workers have affordable single-family coverage from an employer — coverage that by law workers are obligated to accept — their family members will not be eligible for premium subsidies on the exchanges. This can make the cost of insurance for some low- or middle-income families unaffordable. But if they divorce, they get the subsidy.”

It’s worth mentioning that insurance is only a means of paying for care.  You first need to find someone willing to accept your insurance policy before you can receive the care.  Whereas the most important question might at one point have been, “How will I ever afford health insurance?” now that you have insurance, the most important question will be, “Where on earth is the nearest healthcare provider in my insurance network?” 

Sometimes the only way to keep costs down is to exclude the most expensive care providers.  So, that means, you could be staring down a 30 minute to an hour ride to your nearest in-network provider.  It gets sadder as you look at how the rural and poorer sectors will be affected.  Between the penalties threatened against nonprofit hospitals for offering free care, the limited providers in-network, and the lack of inclusion of health clinics servicing the poorer areas, you have to wonder how exactly this is helping anyone!

“Daniel R. Hawkins Jr., a senior vice president of the National Association of Community Health Centers, said insurers have shown little interest in including the association’s 9,000 clinics, even though they serve, ‘low-income, working class uninsured people,’ who are expected to be the main beneficiaries of the program.”

There are already healthcare providers that won’t accept Medicare and Medicaid.  The hassle is not worth it and the payout is too low.  But inevitably this will be the future of the exchanges: fewer and fewer doctors will be willing to accept people with the entry level plans because the payout will be too low… and by too low, I mean not enough to keep them in business.  Back in 2009, it was predicted that by 2020, there would be a 40,000 general practice shortage of doctors.  We’re adding 15% of the population to the insurance doles so that number is rather low.  In fact, with new folks on the dole, we are looking at considerable hikes in overall healthcare spending.  (Sidebar: This article is not only spot-on, but if you scroll down to the updates, the author addresses every objection and sets the record straight on every call-out.  It’s about as in-depth a representation of facts and figures that I’ve seen on this subject.)

These are just the foreseeable flaws.  I can’t imagine the American public getting much more than an “Error 404” from every aspect of this horrific law going forward.