Non-functional Obamacare exchange websites? $500 million estimated to date. 2014? Priceless. (US)

Updated/Revised for breaking news and analysis, 12-14 October (US). Much new information noted in dark blue. (Grab your tea or coffee…this is a long one as this story rolls on.)

The mainstream reports continue to build that both the Federal site, which provides health exchange enrollment for 36 states, and many of the state-run health insurance exchanges (14 plus District of Columbia) are a nightmare of programming glitches and simply don’t work. It is not the demand–which has been high but not unanticipatedly so with an initial 8 million hits–but more disturbingly, the programming appears to be is unsound.  “Computer experts” quoted by CBS This Morning are making statements like “It wasn’t designed well, it wasn’t implemented well, and it looks like nobody tested it,” going on to say ” It’s not even ready for beta testing for my book. I would be ashamed and embarrassed if my organization delivered something like that.” A more technical dissection of the site’s multiple system architecture problems is provided by Reuters here, with the best quote “The site basically DDOS’d itself,” he said. (DDOS–distributed denial of service, a hacking technique but here, the website overwhelmed itself!) 

Counting the cost

A rough calculation of the cost has been made on a tech website, Digital Trends. Andrew Couts (who is pro-Obamacare) ran some public numbers on the IT cost of setting up the Federal part of the exchanges and add in associated 2012-13 costs, and arrives at $500 millionnot including the $2 billion to build out and operate the exchanges in 2014 (General Accounting Office). Larger numbers north of $600 million have been bandied about, but this Editor will go for now with Mr. Couts’ perhaps low estimate which has been supported by more mainstream reporting.

Ed. Donna: He is rightly irate that US taxpayers forked over $500 million to date + $2 billion going forward for a system that collapsed with the first heavy and anticipated use. Rightly also, he points out that $500 million is more than the early rounds of funding for LinkedIn and Spotify, which came out of the gate working just fine, else heads would have rolled! Bad code, incomplete transactions and inadequate servers do not bode well for keeping secure data.  We paid over $500 million for the Obamacare sites and all we got was this lousy 404

Independently, New York Magazine, hardly a ‘right wing rag’, ran its own totals through a source at HHS and came up with $515 million. Mr. Couts’ educated guess was right on the money. Many of those contracts were through a Canadian company, CGI Federal. How Much Did the Government Pay for Obamacare’s Broken Website? (And a photo of what most people see when the site is overloaded–not reproduced here as it belongs to Getty Images.)

The hits go on with the state websites too. Other mainstream reports tell that Hawaii’s website was technically unable to sell a single insurance plan, so they are relaunching on 15 October (CBS DC). A user can buy directly from an insurer, but that tax subsidy that made the hefty premium affordable….no soap. And Iowa, as Middle America as you can get, has perhaps 5 enrollees due to multiple glitches. (Weekly Standard with KCCI and KCRG videos) Covered California claimed 5 million ‘hits’ on Day 1–and promptly walked that back to 645,000 without one sale. (Forbes) New York seems to be faring best with its claim of 40,000 enrollees, undoubtedly seeking relief from that state’s extraordinarily high rates.

By the numbers

Americans often have to go to UK sources such as the Daily Mail for quality reporting on certain (ahem!) events in the US, and this is no exception. Their inside sources at HHS have confirmed, independently of each other, that “attracted just 6,200 new customers on its launch day and 51,000 after the first week.” To put that into perspective, that is equivalent to the population of Tiny City, NJ (Hackensack) plus neighboring Tiny Town, NJ (Little Ferry). HHS is not releasing any official numbers until (perhaps) November.

The Mail also reviews the general ‘brokenness’ of the system, but then performs some calculating on the run rate for the six-month open enrollment period: 1.32 million through plus about 700,000 through the 14 state + DC exchanges. That is less than 29 percent of the 7 million break even projected. Then there are the disturbing projections about the composition–more young and healthy must enroll to shoulder the higher premiums that subsidize the premiums of the older and sicker, and it is questionable despite all the cheerleading that that they, in the numbers needed, will pay the price versus a small penalty on their tax forms. 

But once through, will you get your insurance?

Whatever is getting through now ultimately must pass through to an insurer with subsidy information attached–and early reports indicate that insurers and brokers are receiving seriously glitched information. Washington Post: “Compounding the confusion, these electronic enrollment files are missing a critical element that they were built to include: a time stamp that would let a health plan track whether a consumer’s last step on the site was to actually sign up.” (Editor’s emphasis) In other words, where’s the actual record of conversion? A simple retail transaction problem here that reveals that the 51,000 ‘attracted’ may not be actual enrollments. This report in the WaPo goes on to detail the generating of multiple records, the user name confusion, and more. Federal health exchange sending confusing enrollment information to insurers. provides more details on why ‘behind the curtain’ with something called ‘834 files’ that have to be manually reviewed and fixed are striking terror with insurers, who may rue the day they plumped for the ACA: Insurers Getting Faulty Data From U.S. Health Exchanges. Which begs another question: what will then happen when the fixes are made and the real volume begins?

Perhaps the House offer of another year should have been taken?

An event in Pittsburgh, Pennsylvania which was designed to showcase the new system (PA uses the Federal exchange) turned out to be an embarrassment. With HHS Secretary Sebelius at the football Steelers’ Heinz Field, at owner Dan Rooney’s side ‘blocking’, Émile Coué ruled: “Believe me, we had some early glitches. But it’s getting better every day.” The optimistic autosuggestion technique wasn’t working though in the back room, where 20 of those ‘certified navigators’ armed with laptops were fruitlessly trying to enroll citizens on the spot. Sebelius visit fails to reassure as health care website glitches persist (

MedCityNews picks a cartoon from the talented Steve Kelley that (unfortunately) says it all for the consumer reaction.

There’s a deadline to crash time

It is estimated that 50 million qualify for the exchanges–and the rush will begin on 1 January as employers begin to dump employees and retirees into the system. Can the system be fixed enough to stand this second storm?

A former HHS executive gives a time frame of now less than one month–mid November–to get the fixes in place (TIME)–if not, the young and cheap-to-cover age group that the whole structure is financially built on may never enroll. Are these fixes even possible in this time frame, or by 1 January?

Locating the problem

….is beyond our scope, but the International Business Times‘ tally of the spend on the companies contracted to make the plans, the websites and the back end programming puts some company names to the fail: Booz Allen Hamilton, CGI Federal, Mitre Corporation, Quality Software Service Inc. (QSSI), Experian and others. Companies Behind Obamacare Health Exchange’s Construction And Its Technical Failures

As young (by his picture) Steven Spencer @steveCodes Tweeted:

#obamacare #website still not loading. over a week now. My sites never go down more than an hour. Hire a hacker, noobs.

A bad case of ‘get-there-itis’, Federal style

Which may lead one to the conclusion that the whole thing should have been subcontracted to, say, Amazon. But with the Federal Government one enters the Bizarro World of IT. Ars Technica (Condé Nast) serves up the proposition from a techie with apparently plenty of experience with Federal systems that despite CGI Federal’s experience with the state exchange for Massachusetts, plus QSSI and Booz’s deep experience, “Federal IT projects are infamous for blowing out the “iron triangle” of project management—cost, scope, and schedule. hits all three sides of the triangle.”  He baldly states that it wasn’t tested and that internally HHS, CMS and the GAO knew it was not ready for 1 October. The surprise to this writer was that HHS got up anything at all, and that three years and an expected final cost (his numbers) of $683.81 million, was not enough (!) Obamacare site hits reset button on passwords as contractors scramble

In aviation, this whole scenario is something called ‘get-there-itis’, where the pilot focuses more on getting to the destination than on readiness of aircraft, weather and crew. If severe enough, it too often ends in an incident or a horrible crash. (That is why there are pilot checklists–including the pilot.)

Why was it simply not delayed a couple of months ago?

Was it actually built to fail?

Previously in TTA: Data insecurity in Obamacare insurance exchanges 

Editor Donna Note: Again I have chosen to focus on mainstream media reporting with the exception of the Digital Trends analysis which is now being picked up in broadcast media and is being backed by separate analyses as noted. I hope to offer a balanced view of what has gone wrong as an object lesson in How Not To Get Back To Individual Insurance.

Categories: Latest News, Opinion, and Soapbox.