( Crash and burn risk ? Obamacare Program goes completely sideways unless the nearly impossible task thrust on Accenture is finished in less than sixty days ! This year " March Madness " will not be NCAA Men's Basketball......)
Aetna CEO: We might have to pull out of ObamaCare because it’s not attracting uninsured
POSTED AT 9:21 PM ON JANUARY 23, 2014 BY MARY KATHARINE HAM
One of the nation’s biggest health insurers is worried enough about a scenario in which it would have to pull out of Obamacare exchanges that its CEO is willing to talk about the possibility on national TV from Davos. It may be partly a signal to the administration to get this train moving, but it’s no doubt also a reckoning with reality. Obamacare is not attracting the uninsured, and if the administration would stop changing the rules long enough for insurers to get a handle on who is in the exchange population, they’d no doubt find that population is far more sick and expensive than it was supposed to be.
Aetna CEO Mark Bertolini told CNBC on Wednesday that Obamacare has failed to attract the uninsured, and he offered a scenario in which the insurance company could be forced to pull out of program.The company will be submitting Obamacare rates for 2015 on May 15.“Are they going to be double-digit [increases] or are we going to get beat up because they’re double-digit or are we just going to have to pull out of the program?” Bertolini asked in a “Squawk Box” interview from the World Economic Forum in Davos, Switzerland. “Those questions can’t be answered until we see the population we have today. And we really don’t have a good view on that.”He said that so far, Obamacare has just shifted people who were insured in the individual market to the public exchanges where they could get a better deal on a subsidy for coverage. “We see only 11 percent of the population is actually people that were firmly uninsured that are now insured. So [it] didn’t really eat into the uninsured population.”For Obamacare to work better, it needs more flexibility and choice of insurance programs, Bertolini said. “We need to make it a lot more simpler for people. There needs to be more choice. When you get more choice, you make it more of a market and you get more people in the program.”
Bertolini’s comments illustrate the bind the insurance industry is in—and, yes, they jumped in with Obama on this deal expecting a bunch of people to be forced to buy their product. Obamacare has failed in such a way as to force them to raise rates dramatically. If they raise rates dramatically, the very administration that needs them to stick with the program will be calling them bad apple patent medicine salesmen because vilifying them will be the only hope for politically extricating itself from its policy failure, at least temporarily. And, in the meantime, the industry can’t even get a handle on who is in the exchanges because the administration keeps changing the rules every five minutes. A couple of industry folks told me last week, even if the news about the make-up of the exchanges is bad, it’d be better to figure it out, get some experience with the population, and gauge what can be done for cost containment. Obama’s short-sighted game of switcheroo doesn’t allow much actuarial science to take place.
As to Bertolini’s prescription for more choice and market forces, something like this, perhaps?
This week, health care analyst and Obamacare opponent Megan McArdle went to the Upper West Side and debated the proposition that Obamacare is already doomed…and won. Her analysis, coupled with Bertolini’s message should be chilling to Obamacare fans:
Obamacare’s exchange facility was conceived as a “three-legged stool”: guaranteed issue, community rating, mandate. Guaranteed issue means that an insurer can’t refuse to sell you a policy. And community rating means that they can’t agree to sell you a policy — for a million dollars. The problem is that if you set things up this way, it makes a lot of sense to wait to buy insurance until you get sick, at which point premiums start spiraling into the stratosphere and coverage drops. Enter the mandate: You can’t wait. You have to buy when you’re healthy or pay a fine…Unfortunately, whenever someone has voiced discontent with the way things are going, the administration has taken a hacksaw to another leg. For example, some folks who had policies they liked before were being forced to drop them and buy new policies they didn’t like so much. That caused an outcry, followed by an emergency grandfathering rule.
McArdle offers a timeline for Obamcare’s demise, stipulating that its few popular provisions will survive:
Many of the commentators I’ve read seem to think that the worst is over, as far as unpopular surprises. In fact, the worst is yet to come. Here’s what’s ahead:· 2014: Small-business policy cancellations. This year, the small-business market is going to get hit with the policy cancellations that roiled the individual market last year. Some firms will get better deals, but others will find that their coverage is being canceled in favor of more expensive policies that don’t cover as many of the doctors or procedures that they want. This is going to be a rolling problem throughout the year.· Summer 2014: Insurers get a sizable chunk of money from the government to cover any excess losses. When the costs are published, this is going to be wildly unpopular: The administration has spent three years saying that Obamacare was the antidote to abuses by Big, Bad Insurance Companies, and suddenly it’s a mechanism to funnel taxpayer money to them?· Fall 2014: New premiums are announced.· 2014 and onward: Medicare reimbursement cuts eat into hospital margins, triggering a lot of lobbying and sad ads about how Beloved Local Hospital may have to close.· Spring 2015: The Internal Revenue Service starts collecting individual mandate penalties: 1 percent of income in the first year. That’s going to be a nasty shock to folks who thought the penalty was just $95. I, like many other analysts, expect the administration to announce a temporary delay sometime after April 1, 2014.· Spring 2015: The IRS demands that people whose income was higher than they projected pay back their excess subsidies. This could be thousands of dollars.· Spring 2015: Cuts to Medicare Advantage, which the administration punted on in 2013, are scheduled to go into effect. This will reduce benefits currently enjoyed by millions of seniors, which is why they didn’t let them go into effect this year.· Fall 2015: This is when expert Bob Laszewski says insurers will begin exiting the market if the exchange policies aren’t profitable.Emphasis mine, and Mark Bertolini’s.
Security Expert Hacks Obamacare Website In 4 Minutes; Accesses 70,000 Records
Submitted by Tyler Durden on 01/20/2014 22:02 -0500
Submitted by Michael Krieger of Liberty Blitzkrieg blog,
The hits just keep on coming for ObamaCare. It was less than two weeks ago that I highlighted the potential premium rate death spiral that ObamaCare faces due to the fact that only old and sick people are signing up for the program. Now it seems there are further security related concerns plaguing the site, as cyber-security expert David Kennedy recently claimed that “gaining access to 70,000 personal records of Obamacare enrollees via HealthCare.gov took about 4 minutes.”
It’s actually hard to be this incompetent if you tried. More from the Washington Times:
The man who appeared before Congress last week to explain the security pitfalls of HealthCare.gov took to Fox News on Sunday to explain just how easy it was to penetrate the website.Hacking expert David Kennedy told Fox’s Chris Wallace that gaining access to 70,000 personal records of Obamacare enrollees via HealthCare.gov took about 4 minutes and required nothing more than a standard browser, the Daily Caller reported.“And 70,000 was just one of the numbers that I was able to go up to and I stopped after that,” he said. “You know, I’m sure it’s hundreds of thousands, if not more, and it was done within about a 4 minute timeframe. So, it’s just wide open.”“You can literally just open up your browser, go to this, and extract all this information without actually having to hack the website itself,” he said.
For some context on this very important issue, check out the video below:
Full article here.
Cyber security expert: Healthcare.gov “much worse off” now
POSTED AT 9:01 AM ON JANUARY 20, 2014 BY ED MORRISSEY
David Kennedy has been sounding this alarm for months. The former Marine Corps cyberwarfare expert and now a private-sector entrepreneur in cyber security testified before Congress to the huge gaps in data security in Healthcare.gov, the Obama administration’s web portal for ObamaCare. After a large amount of frantic reprogramming in November, Kennedy thought the problems would worsen. After doing his own research into the web portal, Kennedy says he has confirmed that the site is now “much worse off” (via Daniel Halper at TWS):
KENNEDY: I have to completely disagree with her. And it’s not just myself that is just saying this website is insecure, it is also seven other independent security researchers that also looked at all of the research that I’ve done and came to the exact same conclusion. And these are folks that work really well in the industry. And they’re highly respected, have an extensive experience of working for the government. And, you know, if you read the testimony and you read what she had actually said, she said that it’s done end to end security testing. They don’t say what type of testing that is. It could have been an audit that just looks at paperwork. It could have been, you know, really rudimentary testing that looks for just basic things. But what is pretty evident right now is that the site itself is not secure.WALLACE: All right.KENNEDY: It’s much worse off.
Chris Wallace then asked Kennedy why, if the site is so vulnerable, there haven’t been any hacks against it. That was the question asked by Gary Cohen, the HHS manager overseeing Healthcare.gov, claiming that “there have been no successful attempts of what anyone has been able to attack the system and penetrate it.” Kennedy declared this defense of Healthcare.gov to be “one of my favorites,” and says … how do they know it hasn’t been hacked? Emphases mine:
KENNEDY: And that’s great. This is one of my favorite ones out of the whole testimony. And so they (inaudible) that there has been no successful hacks that they’ve been able to detect. If you look at — there’s November testimony by Congress that basically said that a third party company was contracted to build out what we call the security operations center, which is what would actually detect these types of attacks. As of November, it hadn’t even been started yet. So, if you look at how long these security operations centers take to put into play, it takes several months, if not years to actually implement and fully build the attacks out there. So, as of November we have no modern detection. And that, from my understanding, it’s still not happening to this date. So they’re accurate in their statement. They haven’t detected any attacks on the website,because they don’t have the capability to detect them.
So how does Kennedy know that the website is vulnerable? He’s glad you asked:KENNEDY: That’s a great question. There is a technique called — what we call passer reconnaissance, which allows us to query — look at how the website operates and performs. And these type of attacks that, you know, I’m mentioning here in the 70,000 that you’re referencing is very easy to do. It’s a rudimentary type attack that doesn’t actually attack the website itself, it extracts information from it without actually having to go into the system. Think of it this way. Think of something where you have a car and the car doors are open and the windows are open, you can see inside of it. That’s basically what they allow you to do. And there is no real sophistication level here. It is just really wide open. So, there is no hacking actually involved. And 70,000 was just one of the numbers that I was able to go up to. And I stopped after that. You know, and I’m sure it’s hundreds of thousands, if not more and it was done within about a four-minute time frame. So, it’s just wide open. You can literally just open up your browser, go to this and extract all this information. Not actually having to hack the website itself.You don’t need to hack the website. The data is right out there for anyone to gather, apparently.The full interview is below, and well worth watching:Update: It’s David Kennedy, not Doug Kennedy (an author). My apologies to both men for the confusion.
Only 11% of ObamaCare signups previously uninsured?
POSTED AT 11:01 AM ON JANUARY 20, 2014 BY ED MORRISSEY
Remember when the uninsured in America contributed to the “fierce urgency of now” that demanded that the federal government seize control of health insurance? Only with top-down federal control of that market would those uninsured gain coverage. Since that was the case, we should expect that the new
enrollees sign-ups would tilt heavily toward the uninsured.
Instead, the Wall Street Journal reports, they may be as low as 11% of sign-ups (via United Liberty):
Early signals suggest the majority of the 2.2 million people who sought to enroll in private insurance through new marketplaces through Dec. 28 were previously covered elsewhere, raising questions about how swiftly this part of the health overhaul will be able to make a significant dent in the number of uninsured.Insurers, brokers and consultants estimate at least two-thirds of those consumers previously bought their own coverage or were enrolled in employer-backed plans.The data, based on surveys of enrollees, are preliminary. But insurers say the tally of newly insured consumers is falling short of their expectations, a worrying trend for an industry looking to the law to expand the ranks of its customers.About 48 million Americans were uninsured in 2012. The health law is expected to cut 25 million from that total by expanding state-run Medicaid programs and the pool of privately insured people who buy through state marketplaces, also called exchanges.Only 11% of consumers who bought new coverage under the law were previously uninsured, according to a McKinsey & Co. survey of consumers thought to be eligible for the health-law marketplaces. The result is based on a sampling of 4,563 consumers performed between November and January, of whom 389 had enrolled in new insurance.
Part of the difference is probably related to the actual status of the uninsured. Most of them were uninsured by choice or uninsured in transition, according to US Census Bureau data available in 2009. The estimate of those uninsured by economic circumstances and not covered by Medicaid was 14 million at most. That was about 5% of the American population, rather than the 16% assumed in the 48 million number.
When seen from that perspective, 11% looks a little like overperformance — if we see these as final numbers. But of course, they’re not the final figures, but the people who first came into the system. One would expect that the 14 million previously uninsured would have either enrolled right away in either the Medicaid expansion or the Healthcare.gov system. Instead, we’re at 2.2 million for private insurance sign-ups (not confirmed enrollments), and 3.9 million enrolling in Medicaid over the last quarter, which may or may not be too far off the regular pace of enrollments.
What we definitely aren’t seeing is a mad rush for government-run health insurance, such as we’d see if the problem of the uninsured was as dire as it had been advertised to be. And what we have seen is that the government solution to lack of insurance has thrown more people out of their existing insurance than it has solved the problems of the uninsured by a very wide margin. It’s yet another facet of this disaster that has become painfully obvious to anyone paying attention.
By the way, for those who aren’t rushing to sign up in Healthcare.gov, what’s the main impediment? A majority of 52% say … affordability. Wasn’t that supposed to be the point behind the Affordable Care Act?
While we muse on that, let’s also ask this question: Were there no American firms who could rescue what the Obama administration screwed up?
President Obama spent $831 billion of taxpayer money on a stimulus plan for the economy. He gave nearly $50 billion in aid to GM to keep it afloat. He lost $500 million on energy company Solyndra. All in the name of saving jobs.Yet when it comes to his own signature initiative, the president doesn’t care about American workers. He’s outsourced ObamaCare.After the disastrous rollout of HealthCare.gov, the administration hired Accenture as the new lead contractor. The deal is estimated to be worth $90 million and is now in the hands of the poster boy for global labor arbitrage and offshore tax havens.Accenture has 80,000 Indian workers, 35,000 in the Philippines and only 40,000 in the United States. Over 40 percent of their worth comes from outsourcing. In all probability, the tech jobs awarded under this contract and paid for with US tax dollars are going abroad.
“In all probability” doesn’t mean “confirmed.” This is conjecture, but conjecture based on numbers. Besides, this is the very thing for which Team Obama attacked Mitt Romney in 2012, is it not?
Maryland’s ObamaCare exchange has been directing customers to a Seattle pottery store
POSTED AT 2:21 PM ON JANUARY 20, 2014 BY ERIKA JOHNSEN
Mary Katharine mentioned the other week that Maryland’s state-run ObamaCare exchange — which crashed the first day it was launched last fall and has been stuck in an interminable loop of fail ever since — had been accidentally directing Maryland insurance-seekers in search of help to other states’ ObamaCare navigators. Apparently, however, that was hardly the least facepalm-worthy of the website’s proffered misguidance, via the Baltimore Sun:
Critics said Saturday that the latest problem to hit Maryland’s online health exchange — an incorrect help-line number that directed hundreds of callers to a Seattle-based pottery business — was another symptom of the poorly operating website.“You can’t make this stuff up, and I guess if it wasn’t so serious, it could be funny,” said Senate Minority Leader David R. Brinkley, a Frederick CountyRepublican.The website mistakenly listed a 1-800 number that sent some Marylanders attempting to pick a health insurance provider to Seattle Pottery Supply instead of Maryland’s call center. The number appears under the words “State Advantage” and “call a representative.” The correct number for help shows up multiple times on the site before the incorrect number appears.A state spokeswoman said Saturday that she had no update on efforts to fix the problem. Maryland officials were unaware of the problem until contacted Friday by The Baltimore Sun.
Way to stay on top of things, guys. Maryland is hoping to have 150,000 residents signed up for insurance by the end of March, but so far, they report that they have fewer than 23,000 enrollees with no definitive end in sight to the website’s glitchiness. The state legislature has been organizing hearings to try and figure out exactly what went wrong with the website’s construction, but in the meantime, the O’Malley administration finally ruled out one Congressman’s proposal to temporarily switch over to the federal exchange while the state-run version gets it act together. The CEO of Carefirst sent off a quick letter to Gov. O’Malley during that deliberative process which perhaps aptly demonstrates why they decided against it, via WaPo:
Governor,As a follow on to our recent communication, I just want to say that, while I know your frustrations with Maryland’s efforts on the Exchange have been great, a move to the Federal Exchange at this time would present substantial new risks and costs. Indeed, it may go so further complicate an already complicated situation as to make any near term remedy virtually unattainable.We are dealing directly with the Federal Exchange in Virginia and have extensive day to day experience with it. We find that there are many serious and persistent operating and technical issues that undermine effective enrollment. Missing functionality limits the ability to do basic things such as correct and maintain life event changes for people once they are enrolled. We are concerned about the confusion, poor service and anger this will produce.All things considered, my strong advice would be that the State stay its course and fix as much as it can with its own Exchange during this current open enrollment period. … It also greatly facilitates our efforts to support you since we are very familiar with the work that is being done by the Maryland Exchange and with the processes and technology that underpin it (however flawed).
What a mess.
( Crash and burn risk ? Obamacare Program goes completely sideways unless the nearly impossible task thrust on Accenture is finished in less than sixty days ! This year " March Madness " will not be NCAA Men's Basketball......)
"Entire Healthcare Reform Program" Jeopardized Unless Accenture Fixes Healthcare.gov By Mid-March
Submitted by Tyler Durden on 01/19/2014 11:27 -0500
A few days ago, when we reported that the existing main IT contractor behind Obamacare, CGI Federal, was kicked out and replaced by Accenture, we wondered the reason was that the government was unable to go through the "full and open competition process" before awarding them with a $91 million contract. Recall that "because of time constraints, CMS is awarding the Accenture contract on a sole-source basis." Naturally in a process plagued with mistake after mistake, awarding an express contract with no RFP or contract bidding, is merely the latest one.
So how does the Federal government explain this scramble to hand over the "sole-sourced" healthcare.gov IT contract (to a company made possible thanks to Enron) so late in the process? Simple: the usual mutually assured destruction tactic used so "effectively" in all other recent rushed decisions. As The Hill reports, unless Accenture finishes (and fixes) the back-end of the HealthCare.gov portal by mid-March, the healthcare law will be jeopardized, according to a procurement document posted on a federal website. The punchline: "It says insurers could be bankrupt and the entire healthcare industry threatened if the build out is not completed." In other words, a newly retained consulting company has less than three months to fix all the errors of coding by a different company, and make sure healthcare.gov is working properly... all 500 million lines of healthcare.gov's code?
The Hill has more:
The document says officials realized in December that the need to bring on Accenture is so urgent that there is no time to go through the “full and open competition process” before awarding them with a $91 million contract.“There is limited time to build this functionality and failure to deliver…by mid-March 2014 will result in financial harm to the government,” the document says.“If this functionality is not complete by mid-March 2014, the government could make erroneous payments to providers and insurers,” it continues. “Additionally, without a Financial Management platform that accounts for enrollments and associated program costs that integrates with the existing CMS Accounting platform, the entire healthcare reform program is jeopardized.”Many of those who have signed up for ObamaCare are eligible for federal subsidies, which the government pays directly to the insurers. The document says that failure to complete the project by mid-March can result in “inaccurate issuance of payments to health plans which could seriously put them at financial risk; potentially leading to their default and disrupting continued services and coverage to consumers.”
Wow: so some pretty dire consequences if an outside third party fails at its task? So what exactly will Accenture have to fix :
According to the document, the system is vulnerable to “inaccurate forecasting” of the risk mitigation programs in place to pay insurers who enroll a higher-than-expected number of sick patients with expensive bills, “potentially putting the entire health insurance industry at risk.”By mid-March, Accenture must build a financial management platform that tracks eligibility and enrollment transactions, accounts for subsidy payments to insurance plans, “provides stable and predictable financial accounting and outlook for the entire program,” and that integrates with existing CMS and IRS systems.Accenture will also have to clean up some aspects of the project that CGI failed to complete, such as the notorious 834 enrollment transmissions to insurance companies that in October and November were transmitting inaccurate and garbled data.In November, CMS deputy chief information officer Henry Chao told lawmakers that 30 percent of HealthCare.gov was still under construction, but the specifics and consequences remained murky.
Perhaps a better question is "what it won't have to fix" as it is absolutely impossible that in under three months the new consultancy will be able to fix all the errors in coding left over by the former contractor. Which is why we find it quite surprising that suddenly the fate of Obamacare and the "Entire Healthcare Reform Program" lies in the hands of a measly $91 million contract. Although, if the intention is to merely have a scapegoat for a failed ponzi scheme, then this is precisely the way one would go about it. And if indeed Obama drops the hammer on Accenture, well... we hear the name Andersen Consulting is available.