Market transitions really is the purest political failure

Screen Shot 2013-10-21 at 8.14.05 AMWhile the US was distracted in its negotiations over whether to have a government, the health insurance exchange,, launched. It was beset by technical issues. Put simply, it couldn’t handle the load. This isn’t surprising. The right way to design a site like this is for robustness in on-going use — that is, for the stable flow of applicants — and not for the initial influx — that is, the stock of currently uninsured. The problem is that the launch was open to all and so you have the flow trying to handle the stock with inevitable consequences. It is claimed that these troubles were unexpected but I find that pretty near impossible to believe. Enough people knew this problem was coming. The question is: why was it ignored?

To understand this, we need to think about what should have happened. needed a private beta whereby the stock was managed into a flow via specific invites; basically, a queue was needed. The problem was that the queue meant that some would get health insurance earlier than others. And that was when the idea of a private beta became politically unpalatable. There would be a queue and someone, somewhere was worried that the media could find someone not getting medical care and another insured but not using medical care and there would be a really bad looking story.

The alternative was technical chaos. But the one thing that was true about the chaos is that it could be perceived as fair. Everyone is having trouble! It is, of course, the worst kind of policy to deal with inequity; make sure no one is getting a better deal than others by giving everyone the worse deal.

I don’t think it is much more complex than that but this narrative really puts the political decision-makers on the hook for responsibility. This type of political failure is endemic in democracies. The problem is that it is rewarded and not punished. Instead, some technology officer will likely take the hit. That doesn’t sound too fair really.

What could they have done? The most politically diabolical way of having a private beta queue would be to put the states whose legislatures are refusing to implement Obamacare at the end of the list. You could reward those who were apparently keenest for it. I suspect that this might pose a constitutional difficulty.

The alternative was to randomly allocate invites. Think of the opportunity this would have borne about to study the effects of health insurance coverage. It would be the Oregon experiment (which by the way was a counter example to the political failure argument here) on a national scale. You could learn in a scientific way what works about Obamacare and what doesn’t. Great policy.

Finally, the most obvious thing to do would have been to separate health insurance coverage start dates from the date you signed on to Basically, tell everyone that you are covered from October 1st so long as you sign up by December 31st. No need to rush. To be sure, some people will get suck in that time and switch from being not covered to being covered. But that seems a small price to pay for a sensible launch.

[Update: Apparently they did do the “most obvious thing.” Steve Waldman tells me that you are covered from January 1 if you enroll any time between Oct 1 and Dec 15. Well that is almost the right thing. But why not be covered from October 1?]

4 thoughts on “ really is the purest political failure

  1. As your post illustrates, it isn’t a political failure. It is a failure of the media to do their job. The misinformation surrounding Obamacare is almost completely because the media keeps giving people who are stating outright and obvious falsehoods equal (possibly more) air time as people who are saying the truth. And the media is failing to call out the liars.

    Hence you have a situation where someone well informed like yourself can state a solution which is precisely what they did.

  2. “Well that is almost the right thing. But why not be covered from October 1?”

    Most insurance contracts are yearly by calendar year or June to June AFAIK, so I imagine nobody wanted to offer a 3-month insurance plan.

    1. Also, as for why you might not want to use a queue system, probably due to expectations of people irrationally fearing that there would be limited space for coverage and they might miss out by being farther back.

  3. You seem to be assuming that they were competent to build a robust enterprise computing system that would interface properly with a plethora of legacy systems. It’s hard to imagine that any administration staffed by lawyers or politicians would be able to do that, so it begs the question as to why the “A” team was not deployed a year ago rather than after the embarrassment occurred.

    Some assumed that a brilliant social media strategy would translate into a great online ACA website. Even the top 2012 campaign strategist thinks that was foolish optimistic:

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s