Shocker! California’s Obamacare Exchange Plagued By Incompetence, Mismanagement

Incompetence, Mismanagement Plague California’s Obamacare Insurance Exchange – Daily Signal

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California’s health insurance exchange, established under the Affordable Care Act, has been held out as a national model for Obamacare. In some ways – not all of them good – it is. Whether it’s falling far short of 2015 enrollment goals or sending out 100,000 inaccurate tax forms, Covered California is struggling with its share of challenges.

Now, several senior-level officials integral to the launch of Covered California – who enthusiastically support the Affordable Care Act – are speaking about what they view as gross incompetence and mismanagement involving some of the $1 billion federal tax dollars poured into the state effort.

‘Somebody Must Have Been Smoking Something’

Consultant Aiden Hill became a “foxhole convert” to Obamacare in July of 2010 when he lost his insurance, had a serious medical issue and couldn’t get a new policy.

“I lived through a health care nightmare. That’s one reason why I took a cut in my pay rate to work for Covered California.”

In March 2013, Hill was hired as project manager over Covered California’s massive $120 million call center effort. In just six short months, it would face an avalanche of customers seeking insurance mandated under the new law.

But five months on the job converted Hill from avid supporter to disenchanted whistleblower. He says the secretive and dysfunctional culture was more interested in cheerleading than real results. After he persistently raised concerns, Covered California abruptly terminated his contract. He says the experience drove him to raise allegations about waste and cover ups at a Covered California board meeting.

Covered California quietly launched an independent investigation into Hill’s grievances. Nine months later, the results were summarized in four sentences stating that evidence did “not support” Hill’s complaints. Hill calls the probe a sham and says the inquiry didn’t include interviews with many witnesses he suggested.

Today, Hill describes himself as disgusted by the process – and soured on Obamacare.

“I really believe that we’ve created a monster – and it’s an unaccountable monster,” Hill told The Daily Signal.

Covered California declined comment on Hill’s allegations.

Other officials integral to Covered California’s efforts concur with Hill’s assessment. One of them headed the largest call center.

“They started this way too late for what they needed to do,” says the official who was hired in April 2013, five months before the website’s launch. He has since left that position and asked not to be named to protect his current job status.

“This program had to touch 58 counties, 11 federal agencies, all medical carriers and all advocates. To have a system that would be integrated seamlessly – somebody must have been smoking something if they thought that was going to happen.”

Disappointing Enrollment

It’s against that backdrop that Covered California finds itself now grappling with a big disappointment: low enrollment growth. California ranked near the bottom in overall growth, with a scant 1 percent increase over last year.

“It’s a tiny fraction of the growth they were expecting,” says an official who helped implement the Affordable Care Act and examined California’s numbers.

As recently as last fall, the official says, California hoped to increase enrollment by 500,000 this year. But only an additional 7,098 have “selected a plan” for 2015.

“Their total enrollment is a step in the right direction but nowhere near what anyone thought it would be for the largest state in the country.”

Covered California would not answer our questions about enrollment figures.

Another telling statistic is Covered California’s poor retention rate. Even though people are required by law to have health insurance, only 65 percent of Covered California’s 2014 customers reenrolled in 2015. The rest dropped off.

Covered California would not address our questions about lackluster retention and growth.

Last month, the agency issued a press release touting a younger and more diverse mix of customers.

“New enrollment for 2015 coverage is strong and has brought in consumers who our marketing and outreach targeted,” said Covered California Executive Director Peter Lee, overlooking the fact that his organization’s retention of last year’s customers was among the lowest in the country.

Hoping for a bump, California followed the lead of the federal HealthCare.gov effort and repeatedly extended this year’s enrollment deadline. The Feb. 15 cutoff was pushed back to Feb. 20 and then Feb. 22. Now, it’s been extended to the end of this month.

“I lived through a health care nightmare. That’s one reason why I took a cut in my pay rate to work for Covered California.”

In March 2013, Hill was hired as project manager over Covered California’s massive $120 million call center effort. In just six short months, it would face an avalanche of customers seeking insurance mandated under the new law.

But five months on the job converted Hill from avid supporter to disenchanted whistleblower. He says the secretive and dysfunctional culture was more interested in cheerleading than real results. After he persistently raised concerns, Covered California abruptly terminated his contract. He says the experience drove him to raise allegations about waste and cover ups at a Covered California board meeting.

Covered California quietly launched an independent investigation into Hill’s grievances. Nine months later, the results were summarized in four sentences stating that evidence did “not support” Hill’s complaints. Hill calls the probe a sham and says the inquiry didn’t include interviews with many witnesses he suggested.

Today, Hill describes himself as disgusted by the process – and soured on Obamacare.

“I really believe that we’ve created a monster – and it’s an unaccountable monster,” Hill told The Daily Signal.

Covered California declined comment on Hill’s allegations.

Other officials integral to Covered California’s efforts concur with Hill’s assessment. One of them headed the largest call center.

“They started this way too late for what they needed to do,” says the official who was hired in April 2013, five months before the website’s launch. He has since left that position and asked not to be named to protect his current job status.

“This program had to touch 58 counties, 11 federal agencies, all medical carriers and all advocates. To have a system that would be integrated seamlessly – somebody must have been smoking something if they thought that was going to happen.”

Disappointing Enrollment

It’s against that backdrop that Covered California finds itself now grappling with a big disappointment: low enrollment growth. California ranked near the bottom in overall growth, with a scant 1 percent increase over last year.

“It’s a tiny fraction of the growth they were expecting,” says an official who helped implement the Affordable Care Act and examined California’s numbers.

As recently as last fall, the official says, California hoped to increase enrollment by 500,000 this year. But only an additional 7,098 have “selected a plan” for 2015.

“Their total enrollment is a step in the right direction but nowhere near what anyone thought it would be for the largest state in the country.”

Covered California would not answer our questions about enrollment figures.

Another telling statistic is Covered California’s poor retention rate. Even though people are required by law to have health insurance, only 65 percent of Covered California’s 2014 customers reenrolled in 2015. The rest dropped off.

Covered California would not address our questions about lackluster retention and growth.

Last month, the agency issued a press release touting a younger and more diverse mix of customers.

“New enrollment for 2015 coverage is strong and has brought in consumers who our marketing and outreach targeted,” said Covered California Executive Director Peter Lee, overlooking the fact that his organization’s retention of last year’s customers was among the lowest in the country.

Hoping for a bump, California followed the lead of the federal HealthCare.gov effort and repeatedly extended this year’s enrollment deadline. The Feb. 15 cutoff was pushed back to Feb. 20 and then Feb. 22. Now, it’s been extended to the end of this month.

Call Center Chaos

The devastating crash of Covered California’s website and call centers on Oct. 1, 2013 was “the canary in the coalmine, an early warning of deep dysfunction,” according to Hill.

Pre-launch testing had proven disastrous. As with the national HealthCare.gov website, “it was breaking at the first click of the button,” says the former call center manager who worked under Hill. “Behind the scenes, states were worried. I know we were worried.”

Covered California contractors projected 10,000 calls the first day. The call center manager says he knew they were way off. “I and my training manager, who had launched call centers before, projected 20,000. We had 21,000 on day one. Our contractors were wrong.”

The HealthCare.gov website was on a parallel trajectory. It, too, suffered under hasty development and failed performance tests days before launch – all while the Obama administration put on a positive public face.

“Everybody knew it wasn’t going to function,” says a third Covered California official. “Calls start coming in and within the first hour, the entire system went down – phone and web.”

“The train was coming off the rails,” adds Hill. “The call center was going into meltdown.”

The meltdown lasted for months and fixes proved costly. Covered California would not provide a tally of expenses, but the agency ended up asking the federal government for an extra $155 million. That put the cost of Covered California at more than $1.06 billion federal tax dollars.

Enrollment Exaggeration?

Covered California’s disastrous debut triggered a house of cards. When the website crashed, consumers were directed to fill out paper applications; they were 33 pages long and took at least an hour to complete. What’s more, they couldn’t be coordinated with the electronic version because of a major design flaw. The forms didn’t match.

But Covered California counted duplicate applications as if they were enrollments, giving the impression that more people had successfully signed up. (The Obama administration did the same with national HealthCare.gov applications.)

For example, Covered California’s Lee publicly touted 30,000 successful enrollments for the first month. Hill says the actual number was closer to 4,000.

“A lot of the information that came out of Covered California was misleading or outright lies,” Hill insists.

Another Covered California official agrees.

“There’s no way he didn’t know he wasn’t telling the truth,” says an official, who still works at the agency and asked not to be identified. “We were fully aware that those numbers were inflated. It was horrible… morale busting. Things were being said that were blatantly untrue.”

The Daily Signal asked for Lee’s side of the story, but Covered California declined to make him available.

Hill says misinformation was aided and abetted by an uninformed press. In the midst of Covered California’s fiasco, he was stunned to read a New York Times article claiming the Golden State was an Obamacare utopia: the crown jewel of the health care reform effort.

On Nov. 24, 2013, Paul Krugman of The New York Times gushed:

What would happen if we unveiled a program that looked like Obamacare, in a place that looked like America, but with competent project management that produced a working website? Well, your wish is granted. Ladies and gentlemen, I give you California… The California authorities have been especially forthcoming with data tracking the progress of enrollment. And the numbers are increasingly encouraging.

That assessment was far from the reality, say the Covered California officials who spoke to The Daily Signal.

Covered California declined to respond to our questions but issued this statement:

Covered California is proud that it has been the portal for nearly four million people to find coverage through one of our participating health plans or through low cost/no cost Medi-Cal; is helping more than a million people access financial assistance to lower their monthly health insurance premiums; through the Affordable Care Act has reduced the number of uninsured in California by half.

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FL Governor: Obama Resorting To Extortion In Attempt To Force State Further Into Obamacare

Fla. Gov. Suing Administration For Trying To ‘Force Our State Further Into Obamacare’ – CNS

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“It is appalling that President Obama would cut off federal healthcare dollars to Florida in an effort to force our state further into Obamacare,” a furious Florida Gov. Rick Scott (R) said Thursday as he announced that he plans to sue the Obama administration.

“It’s outrageous,” Scott told Fox News Thursday night.”The federal government started a program in our state in 2006. It’s called the Low Income Pool. It’s (health care) for low income families,” Scott explained. “Now, what they are saying is they are not going to keep that program going unless the state expands Obamacare (Medicaid). So this, first off, is horrible.”

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“It sounds like extortion,” Fox News’s Kimberly Guilfoyle told Scott.

“Absolutely,” the governor agreed. “First off, you think about the families in our state that are relying on this. Second, (Supreme Court Chief) Justice Roberts said…that it’s not lawful for the federal government, for the Obama administration, to use coercion tactics, basically held a gun to our head, if we don’t expand Obamacare. They say they can’t do that.”

The Supreme Court in 2012 upheld Obamacare’s individual mandate, but it also said the federal government could not compel the states to expand Medicaid coverage for low-income people. As of this writing, 28 states and the District of Columbia have ageed to expand Medicaid. The federal government has agreed to pay 100 percent of the expansion costs through 2016, but after that, the states must pick up a larger share of the costs, and that’s what worries Scott and other governors.

In July 2012, shortly after the Supreme Court ruling, Gov. Scott announced that Florida would “opt out of spending approximately $1.9 billion more taxpayer dollars required to implement a massive entitlement expansion of the Medicaid program.”

“Floridians are interested in jobs and economic growth, a quality education for their children, and keeping the cost of living low,” Governor Scott said at the time. “Neither of these major provisions in Obamacare will achieve those goals, and since Florida is legally allowed to opt out, that’s the right decision for our citizens.”

He also noted that “Florida already has health care safety net programs for those with the greatest need.”

Scott told Fox News on Thursday that he and his attorney general are working on a lawsuit right now.

He questioned whether President Obama really cares about the low-income families in Florida for whom the federal government created the LIP program in the first place.

“And doesn’t everybody now understand that this is an administration that’s going to use coercion tactics, and when it’s appropriate, they’ll cut back funding if you don’t do another program they want?”

“One, they don’t care about the low income families because they are willing to walk away from a program. And then, two, they are using bully – this is a Sopranos. They are using bullying tactics to attack our state. It’s wrong. It’s outrageous just that they’re doing this.”

A White House spokesman, asked for his reaction to the anticipated Florida lawsuit, said he hadn’t seen “specific details.”

“But what is true is that expanding Medicaid in the State of Florida would ensure that 800,000 Floridians would get access to quality health-care coverage,” Josh Earnest said on Thursday.

Earnest noted that under Obamacare, the federal government picks up the full cost of expanding Medicaid through 2016.

“So there’s not a good reason why anybody in Florida would be in a situation of trying to block a policy that would benefit 800,000 Floridians. In fact, they would have a positive impact on the finances in the State of Florida.

“And it’s difficult to explain why somebody would think that their political situation and their political interest is somehow more important than the livelihood and health of 800,000 people that they were elected to lead.”

In a message on his website Thursday, Scott said the Centers for Medicare and Medicaid Services (CMS) sent him a letter this week, saying that “the furture of LIP’ and “Medicaid expansion are linked.”

“We will fight to protect the healthcare of Floridians, and their right to be free from federal overreach,” Scott said. “Our citizens already pay federal taxes that go into the federal LIP program. Now, President Obama has decided that the state must take on a larger Medicaid program, forcing our taxpayers to pay even more to government, before they get their own federal tax dollars back. This is outrageous, and specifically what the Supreme Court warned against.”

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Maryland Obamacare Exchange Wrongly Billed U.S. Taxpayers $28M

MD’s Exchange Wrongly Billed U.S. Taxpayers $28M – Sweetness & Light

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From the United Press International:

Audit shows Maryland health exchange improperly billed $28.4 million

March 27, 2015

WASHINGTON (UPI) – Maryland’s health insurance exchange improperly billed the federal government $28.4 million, a Department of Health and Human Services audit reported Friday.

In another patented Friday evening news dump.

An inspector general’s probe found a lack of oversight and internal controls, not criminal wrongdoing, was the cause of the exchange’s problems since the marketplace opened in 2013.

Their incompetence seems to border on criminality.

The Maryland Health Connection was among the first state exchanges approved by the federal government, but its website crashed on its first day of operation and it experienced numerous software problems and feuds between contractors.

The entire technological infrastructure of the exchange was scrapped in 2014 and replaced by a platform used by Connecticut’s exchange.

In other words, it was a typical Obama-Care success story. By the way, wouldn’t Maryland’s governor make a great President?

The audit said the state used a 2013 and 2014 federal grant to cover the exchange’s costs when it should have used funds from a Medicaid program jointly financed by Maryland and the federal government…

We’re sure it was an innocent mistake. The state wouldn’t want to try to cheat the federal taxpayers in other states.

The audit found two accounting errors, a $15.9 million misallocation caused by out-of-date enrollment data, and $12.5 million through an unidentified contractor’s incorrect calculations.

It recommended Maryland pay back the $28.4 million, then apply for the actual amount due it from the federal government…

Don’t hold your breath.

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Leftist Politicians Beg Obama To Illegally Change Obamacare Rules So Their Constituents Can Avoid New Tax Penalties

Democrats Beg Obama To Bend Obamacare Rules To Avoid Tax Penalties For Millions – Big Government

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Three senior House Democrats are pleading with the Obama administration to bend the Obamacare rules to prevent their constituents and millions of Americans from being hit with Obamacare tax penalties.

Reps. Sander Levin (D-MI), Jim McDermott (D-WA), and Lloyd Doggett (D-TX) have strongly requested a special sign-up for the uninsured who will all be hit with a $325 fine or two percent of their income (whichever is higher) for failure to enroll in 2015. In 2016, the Obamacare tax penalty will be an average $1,100, reports the Associated Press. For 2014, the Obamacare tax was $95 or one percent of income.

“Open enrollment period ended before many Americans filed their taxes,” the three lawmakers said in a statement. “Without a special enrollment period, many people (who will be paying fines) will not have another opportunity to get health coverage this year.”

The lawmakers’ pleas come on the heels of a devastating New York Times article published last week titled, “Insured, but Not Covered,” which revealed that many Obamacare customers are hitting the harsh wall of reality about how expensive and flimsy their Obamacare plans truly are. As the Times notes, “A recent New York Times/CBS poll found that 46 percent of Americans said they had trouble affording health care, up 10 percentage points in just one year.”

Obamacare remains deeply unpopular. According to the RealClearPolitics average of polls, just 39% of Americans support Obama’s signature legislative achievement.

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*VIDEO* Net “Neutrality” – The ObamaCare Of The World Wide Web


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H/T Powerline

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Buried In The Numbers: Obamacare’s Costs Are Climbing, Not Receding (Sally Pipes)

Buried In The Numbers: Obamacare’s Costs Are Climbing, Not Receding – Sally Pipes

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Late last month, the Congressional Budget Office reported that the provisions within Obamacare expanding access to insurance coverage would cost 20% less than the agency estimated in 2010, when the law passed.

The White House was ecstatic. “The estimates released today by CBO once again confirm the progress we’ve made,” said deputy press secretary Eric Schultz.

Taxpayers, however, should worry. A closer look at the CBO’s numbers shows that Obamacare is growing much more expensive – and disruptive.

The CBO now expects Obamacare to cover far fewer uninsured than it previously thought. In a March 2011 report, the nonpartisan agency predicted that Obamacare would extend coverage to 34 million uninsured by 2021. It has since downgraded that number to 27 million – and concluded that Obamacare will leave 31 million Americans without insurance.

So the law’s overall price tag has declined only because it’s covering fewer people.

Left unsaid is the fact that Obamacare is set to spend more per person. If the law is not repealed, Obamacare will shell out $7,740 in subsidies for every person who gains coverage in 2021. That’s a 7% increase over the agency’s per-person estimate in 2011.

The CBO now projects that the law will cost nearly $2 trillion over the next ten years. Obamacare’s subsidies alone will cost $1.1 trillion. In 2010, the agency put the cost of the entire law at $940 billion over its first decade.

Obamacare hasn’t just failed to expand coverage as projected – it’s caused more people to lose their insurance than its architects intended. The CBO now estimates that 10 million people will lose their employer-provided health benefits by 2021. That’s a tenfold increase over the agency’s 2011 projections.

Indeed, the CBO originally predicted that Obamacare would boost employer-based health coverage by several million from 2011 to 2015.

This latest round of CBO projections could look downright rosy if health costs rise in the future.

That seems likely. National health spending shot up 5.6% last year. The agency predicts that it will climb 6% a year for the foreseeable future. That’s a 50% uptick from the average annual health inflation rate over the past six years.

Meanwhile, by offering subsidies for the purchase of insurance on state or federal exchanges, Obamacare will increase demand for it. That will fuel further price inflation.

Obamacare architect Jonathan Gruber admitted as much in a January 2014 interview, saying, “The law isn’t designed to save money. It’s designed to improve health, and that’s going to cost money.” The president, of course, promised otherwise.

The law’s costs could rise even faster if companies dodge the employer mandate, which require firms with at least 100 full-time employees to offer health plans or pay a fine starting this year. Those with at least 50 full-timers must do the same beginning in 2016.

Employers might cut back on their workers’ hours so that they’re considered part-time — or stop hiring workers. Some firms may dump their health plans altogether, thanks to Obamacare’s many other cost-inflating mandates and regulations. The fine may be cheaper than the cost of coverage.

That may be good for their bottom line. But workers would suddenly have to pay for their own coverage on the exchanges. Taxpayers would have to pick up a share of the tab for those that qualify for subsidies.

These possibilities are becoming reality. A recent survey of small companies in southwestern Michigan found that one-quarter planned to drop their health plans this year because of Obamacare. Another quarter expect to do so next year.

Dr. Ezekiel Emanuel, another of Obamacare’s architects, believes these mass exoduses will continue. He predicts that Obamacare will bring about “the end of employer-sponsored insurance.”

It doesn’t have to be this way. Our healthcare system can deliver better quality care at lower cost – but only if the federal government repeals the Affordable Care Act and replaces it with a healthcare law based on market-friendly reforms.

Consider the market for senior care – dominated, of course, by Medicare. Lawmakers should replace the current, open-ended, fee-for-service system with means-tested vouchers available to beneficiaries at age 67, just as Social Security is. Under such a system, seniors would be able to pick from a variety of privately administered health plans. Competition can do the job of reducing costs and improving quality.

It’s already done so in the Medicare Part D drug benefit, which allows seniors to choose from among prescription drug plans offered by competing insurance companies. According to the CBO, Part D’s cost between 2004 and 2013 was 45% lower than the agency predicted at the outset.

Lawmakers should adopt a similar approach to reforming Medicaid, the joint state-federal health plan for the poor. A fixed block grant for each state – and private options for Medicaid enrollees – would empower states to experiment with their programs to determine how to deliver the best care at the lowest cost.

There’s evidence that this approach can save money and improve care. In 2011, Oregon convinced the Obama administration to give it a block grant of sorts. The results have been impressive. Emergency-room visits declined 17%. From 2011 to 2014, costs fell 19%.

If Oregon’s approach were adopted nationwide, Medicaid spending could decline by more than $900 billion over the next decade, according to CMS.

Obamacare is failing to reduce our nation’s health costs and to expand access to insurance as promised. Congress’s own budget watchdog now admits as much.

Congressional Republicans have finally begun to do something about that reality, with their vote to repeal Obamacare last week and their reinvigorated drive to formulate a replacement. They must complete the job.

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*VIDEO* The Trillion-Dollar Obamacare Tax Tsunami Is Upon Us


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