Freedom Line Blog

Add Hawaii to the growing list of states that can’t afford to continue funding their financially unsustainable ObamaCare exchange.

“The state’s exchange is drowning in their own debt and is set to shut down by September 30,” writes Kristina Ribali of the Foundation for Government Accountability. “Administrators had been hoping to get a funding boost from state lawmakers, during their current legislative session, but that will not happen.”

Hawaii’s death spiral became clear in January when the federal government notified the state that it was out of compliance with ObamaCare’s performance benchmarks. By this year state exchanges have to prove their long term financial viability, and their IT systems must be integrated with the Medicaid database. The latter requirement ensures that applicants are correctly channeled to the appropriate government assistance program.

Hawaii – like Oregon, Nevada, New Mexico, Colorado, Minnesota, Maryland, Massachusetts and Vermont – isn’t generating enough revenue in enrollment fees to make its exchange solvent. Its failure to integrate IT systems is likely the final blow before the state hands over its exchange function to Healthcare.gov, the federal counterpart.

Like the other states just mentioned, Hawaii’s ObamaCare exchange failure has been expensive: $204.3 million.

And counting…

If you are one of the estimated 800,000 Americans who purchased an ObamaCare-compliant health insurance policy for the 2014 enrollment year through Healthcare.gov – the federal exchange portal – and received the wrong tax reporting form, you now have until October 15 to file your taxes.

The Treasury Department announcement came last Friday, less than two weeks before the traditional tax filing deadline.

Credit where it’s due – this is the right call by the Obama Administration since it was the government – not taxpayers – that fouled up the process by mailing error-laden reporting forms. The six month extension relieves the pressure on taxpayers and their accountants and hopefully gives the bureaucracy enough time to fix the problem.

Nevertheless, like all of the other unilateral delays and waivers granted under ObamaCare, this development is yet another indication that the federal government bit off more than it can chew and the number one casualty is the rule of law.

Last week the Associated Press revealed that the Obama administration is allowing e-commerce companies to collect private information from people using Healthcare.gov – the government website connecting citizens in 34 states to ObamaCare-compliant insurance plans.

The data points retrieved include ZIP code, age, income, pregnancy status and tobacco use.

Now, the website has reduced the amount of information it is sending, but privacy advocates say more needs to be done.

A tech expert with the Electronic Frontier Foundation says the Obama administration’s website should not allow third-party tracking services to capture the information received from visitors who enable the “do not track” feature on their browsers.

Better yet, the government should get out of the business of sharing sensitive information it mandates citizens to divulge.

“Have you been researching a chronic illness like coronary artery blockage? Do you shop online for smoking-cessation aids? Are you investigating genetic markers for a certain type of breast cancer? Are you seeking help for financial problems, or for an addiction?”

Those are just some of the information items potentially being collected on Healthcare.gov – the federal government’s ObamaCare website used by millions of Americans to shop for health insurance.

A report by the Associated Press confirmed that “dozens” of third party vendors like Google, Twitter and Facebook are gleaning personal data points from Healthcare.gov users. These can be sold to internet advertisers to market products directly to consumers who’ve searched for similar items.

The hidden presence of these websites drew concern from two cyber security experts interviewed by the AP, in part because tracking firms can piece together a user’s identity through IP addresses and patterns of behavior.

Once upon a time there was concern that hackers would find a way to access a person’s health and financial records through a weakness in Healthcare.gov. As it turns out, all they need to do is pose as an e-commerce vendor.

Next year’s ObamaCare premiums won’t be available through Healthcare.gov – the federal insurance portal servicing 26 states – until the week after the November 4^th midterm elections.

“Insurers say one big challenge for next year will involve millions of returning customers,” the AP reports. “It’s not really a technology issue, but a time crunch that also coincides with the Thanksgiving and Christmas holidays.”

In this case, it’s not the health insurance companies who are to blame, but rather the Obama administration. Late last year when Healthcare.gov was glitching its way into infamy, news leaked that the enrollment period for 2015 would be pushed back a month – from October 15 to November 15. Everybody who could read a political calendar knew the primary motivation was to hide the true cost of ObamaCare’s second year premiums from voters before going to the polls.

This is just one more reason why it’s a bad idea to have the government in control of health care pricing – those responsible will never allow the public to hold them accountable.

H/T: Townhall Tipsheet

A new report by Bloomberg Government indicates that Sylvia Burwell, the Secretary of Health and Human Services (HHS), gave a potentially misleading answer when she told Congress that Healthcare.gov – the federal government’s ObamaCare portal – cost taxpayers $834 million to build.

Nicole Kaeding at the CATO Institute teases out some of the unstated, but related, costs that balloon the overall price tag to $2.14 billion, far north of Burwell’s testimony.

I’ve summarized them here as bullet points:

• $300 million contract to process paper applications to serve as backups to electronic files

• $387 million for real-time interfacing between the IRS and Healthcare.gov to verify income and family size for insurance subsidy calculations

• $400 million in accounting tricks HHS used to pay for creating Healthcare.gov when 26 states refused to take federal start-up grants to build their own. Congress made no appropriations to build Healthcare.gov, so HHS shifted money from other units to fund the project.

• $255 million in spending between February 2014 – the end of Burwell’s timeline – and August 20, 2014, the most recent information available. Bloomberg also included projected spending at current levels through September 30, 2014, the end of the fiscal year.

These are the kinds of expenses that Members of Congress would expect the HHS Secretary to include when testifying about full cost of a program. The fact that Burwell gave a low-ball estimate when these figures were easily accessible to her or her staff weakens her credibility as an honest broker of information. As her departing colleague Eric Holder knows, once Congress loses its ability to trust a Cabinet official, the gloves come off.

A CNBC report says that multiple states now operating an ObamaCare exchange could decide the costs are unsustainable and relinquish control to Healthcare.gov, the exchange run by the federal government.

The reasons are multiplying. Oregon decided to shutter its woebegone website after spending $248 million and failing to enroll a single person online. Massachusetts is abandoning its software program, but if its replacement isn’t ready to launch by the next enrollment period in November it plans to default to Healthcare.gov. Colorado and Rhode Island are trying to figure out how to make their exchanges financially viable once federal subsidies run out. And at least one expert thinks Nevada and Hawaii may also decide to let the feds be responsible for continuing IT updates and rules changes.

But it’s not like the once foundering Healthcare.gov is experiencing smooth sailing. Recent testimony before Congress confirmed the existence of duplicate enrollments that cast doubt on the Obama administration’s overall enrollment claims.

“Due to website glitches, some individuals may have enrolled multiple times,” explains the Illinois Policy Institute. “For example, if there are three people with one enrollment each and one person with two enrollments, the government will report this as five total enrollments. If the first three people paid for each of their policies and the fourth person paid for one policy, the insurer will report 100 percent payment. In this way, the government numbers may be further overstating enrollments.”

And with it, Healthcare.gov’s ability to handle the increased responsibility for processing many more people.

House Republicans are getting ready to ring in the New Year by focusing on Obamacare’s security risks.

As I’ve written previously, personal information entered into an account on Healthcare.gov – the federal Obamacare insurance exchange – may not be protected from identity thieves.

Amazingly, “Under current policy, an agency within the Department of Health and Human Services is tasked with deciding whether there is a risk of harm and whether individuals need to be notified whenever a security breach occurs,” says Fox News. “Republican lawmakers argue that the notification should not be optional.

A memo authored by House Majority Leader Eric Cantor (R-VA) calls for the chamber to vote on bills that would require HHS and its affiliates to notify the public if a security breach occurs.

Democrats are crying foul, but their opposition is self-serving. The only reason not to support the change to mandatory notice is to preserve the false sense of security that no notice means that all is safe.

President Obama once promised that his is “the most transparent administration in history.” The least he could do is apply that promise to the law that bears his name.

According to management experts, there are three pretty obvious reasons why the Obama administration was ill-prepared to make Heathcare.gov work.

“The heart of the issue, many of these people say, is that Obama and his inner circle had scant executive experience prior to arriving in the West Wing, and dim appreciation of the myriad ways the federal bureaucracy can frustrate an ambitious president,” reports Politico. “And above all, they had little apparent interest in the kind of organizational and motivational concepts that typically are the preoccupation of the most celebrated modern managers.”

In other words, no one in an Obamacare leadership position had relevant experience in this area. Worse, the President himself doesn’t appear to think this glaring deficiency matters.

It’s hard to fathom how a program so central to Obama’s legacy could be quarterbacked so poorly for so long, but here we are. The President thought that simply passing Obamacare would be enough to cement his status as one of the nation’s all-time greats. But if Republicans unite around an alternative and win back Congress this year, he’ll be lucky to leave office with anything resembling a workable program.

Since President Barack Obama refuses to replace any of his political appointees responsible for the epic bureaucratic failure that is Healthcare.gov, liberal supporters of health care reform are trying to turn the crisis into a potential power grab.

“Advocates have been quietly pushing the idea of a CEO who would set marketplace rules, coordinate with insurers and state regulators on the health plans offered for sale, supervise enrollment campaigns and oversee technology,” says a Reuters report.

The move would consolidate responsibility in the hands of one person that reports directly to the White House.

In other words, it would create a “Healthcare.gov Czar,” or, to use the title preferred by FDR when naming such deputies, a dictator.

Since no such position exists in the text of Obamacare, its creation would amount to a unilateral executive action by the President. Unlike the Secretary of Health and Human Services and the Director of the Centers for Medicare and Medicaid, the proposed dictator would not be confirmed by the U.S. Senate. If created, the position would be immune from virtually any oversight from Congress.

Moreover, erecting a Healthcare.gov CEO within the confines of the White House would be a fundamental rejection of the intended operating structure of Obamacare by the very President who signed it into law.

These reasons, plus others, may explain why the White House is said not to be entertaining such a drastic break with the health law’s basic architecture. Even they fear the likely blowback from a move that further centralizes political control of the health insurance industry.

Still, the fact that Obama’s most liberal supporters are pushing this idea – including Ezekiel Emanuel and wonks at the Center for American Progress – shows that the tendency on the Left is to interpret any problem in implementation as stemming from a lack of power. The endpoint for them is a single-payer system run exclusively by the feds.

Even if this proposal goes nowhere, its currency among the liberal elite shows us where this train is heading. Better to dismantle it before it passes the point of no return.

A consensus is forming in the public relations world about what went wrong with Obamacare’s horrendous Healthcare.gov rollout.

In what Politico calls “a case study for crisis management consultants and their clients of what not to do,” three problems are clear.

First, the Obama administration wasn’t truthful. By downplaying the website’s crashes and error messages as “glitches” due to heavier-than-expected traffic, the White House misled the public on how bad the system actually was.

Second, updates lacked success stories. That’s probably because only 6 people successfully enrolled via the website on its first day.

Finally, despite more than three years to get ready Obamacare still lacks an effective spokesperson.

But that’s not quite right.

Until recently, President Barack Obama was a very effective spokesman when he told anyone who would listen that his signature bill would expand coverage, reduce costs and improve quality – all without requiring anyone to forfeit their current plans, doctors and hospitals.

Though the criticisms from PR consultants of the Obama administration’s handling of its latest fiasco are well-deserved, the problem with Obamacare runs much deeper than a textbook failure of crisis management. The problem with Obamacare is that it was designed by ideologues, implemented by amateurs and sold on a lie.

No amount of spin or surrogacy can fix that.

All four of the cyber security experts that testified before a House committee yesterday agreed that Americans should not use Healthcare.gov until its security features are enhanced, or in some cases, built.

Three of the four said the website should be shut down until the security problems are fixed; preferably by rebuilding the site from scratch.

While that may sound drastic, an Obama administration official responsible for developing Healthcare.gov says that up to 40 percent of the site isn’t finished yet – including the parts that deliver subsidies to insurance companies on behalf of qualified Obamacare enrollees.

And it’s not like the roughly 60 percent of the website that is completed is running smoothly, as HHS Secretary Kathleen Sebelius discovered when it crashed while she was demonstrating its (in)effectiveness to the public.

Bombarded as we are with the epic ineptitude of this fiasco, it’s hard to improve on Charles Krauthammer’s sentiments: “…this is a level of incompetence that is indescribable. And it stands to reason. We have a president who never ran anything. He was never a governor. He never ran a hot dog stand in his life and he presumed that his team could remake one-sixth of the American [economy] and this is what happens.”

Brace yourself. There is much more to come.

If you’re thinking about using Healthcare.gov to shop for an Obamacare-approved insurance plan – wait.

The personal information you enter to create an account may be unprotected from hackers.

That is the startling reality uncovered in testimony given by one of Healthcare.gov’s top IT officials to House investigators. Apparently, a memo documenting several “open high findings” – including the website’s vulnerability to identity thieves – was kept away from the person responsible for green-lighting its launch.

As the plot thickens, Avik Roy asks several pertinent questions: “First: Did Tony Trenkle intentionally conceal this critical information about high security risks from Henry Chao, or was it an accident? Second: Would Chao have recommended that the exchange go forward if he had been aware of high findings? Third: Did Marilyn Tavenner—the head of CMS—know about these issues when she issued the final go-ahead authorization? Fourth: Now that this information is public, why is the Obama administration encouraging people to enter their sensitive personal data into the non-secure healthcare.gov website?” (Emphasis added)

Why indeed?

Could it be that there is such a rush to spike Healthcare.gov’s enrollment numbers that Obama administration officials are willing to overlook the potential risk to millions of Americans’ private information?

It brings a whole new ominous meaning to the warning buyer beware.

Generation Opportunity, a national organization of young people focused on promoting liberty, presented the main contractor behind HealthCare.gov – the Obamacare website – with the first ever Youth Defender Award.

In a deliciously tongue-in-cheek press announcement released on Monday, Generation Opportunity noted that CGI Federal, the American subsidiary of the Canadian multinational CGI Group, has done “more than anyone to date to save young people from the increased costs and privacy invasions of Obamacare.”

Generation Opportunity continues:

“Sure, CGI is billing the government over 300% of their original contract, and taxpayers could be on the hook for $292 million dollars for the healthcare equivalent of Project ORCA. But no cost is too much to bear to help young people avoid this expensive and creepy law.

Generation Opportunity congratulates all the worthy candidates, including the runner-up, HHS Secretary Kathleen Sebelius, who reminded young people on The Daily Show that they can get the same exemption from Obamacare as businesses by opting out and paying the penalty. After all, Sebelius had the foresight to hire CGI knowing they had a track record of protecting patients from government-run health care. The Canadian government had previously fired CGI’s parent company for failing to create a functioning website for Ontario’s medical registry.

Generation Opportunity developed the awesomely sardonic award in order to promote its OptOut.org website, which encourages young Americans to choose health insurance plans outside of the Obamacare exchanges.

The young folks at Generation Opportunity deserve an award themselves – for providing those of us who despise Obamacare with a big laugh.