America's Bitter Pill

by Steven Brill

  Two days later, on Saturday, August 24, a CGI email to CMS reported that 62 percent of the exchange was now built.

  * * *

  *16. It was only months later, after I began working on this book, that I became aware of the panicked internal emails, infighting, and lack of leadership that preceded the launch.

  CHAPTER 19

  THIRTY DAYS TO GO

  September 2013

  ON SEPTEMBER 6, 2013, CGI EXECUTIVES WARNED CHAO IN AN email that “due to the compressed schedule there is not enough time built in for adequate performance testing.”

  Yet ten days after that CGI senior vice president Cheryl Campbell told a House of Representatives subcommittee that “at this time, CGI Federal is confident that it will deliver the functionality that CMS has directed to enable qualified individuals to begin enrolling in coverage when the initial enrollment period begins on October 1, 2013.”

  Make believe you’re a lawyer and reread that statement looking for the escape clauses. Campbell was saying CGI would deliver the functionality that CMS had directed to enable qualified individuals to begin enrolling in coverage. What if they could “begin” enrolling but not complete the process? What if the other contractors hadn’t delivered on their pieces of the puzzle, such as the mechanism vetting the identity of consumers after they began enrollment? How many “qualified individuals” would be able to enroll? What if CMS had directed the wrong functionality? And what if it all hadn’t been tested to check for all of that?

  By now, Bryan Sivak—the chief technology officer at CMS parent HHS, who had built the exchange’s consumer-facing home page and was supposed to be his agency’s chief innovation officer—was whispering to friends that there was “no way” the launch was going to succeed. He had created and launched dozens of software projects, he told anyone who would listen, and there were always bugs that you could never anticipate no matter how good the coders were—“and these guys probably weren’t very good,” he feared. “You can’t do something like this without months of testing,” he confided.

  Sivak talked to Sebelius and others at the Department of Health and Human Services about his qualms. But he was told that he didn’t have the information they had—which was true because Chao and the others had shut him out. The staff working on the build had assured her, Sebelius told him, that while there might be some glitches, everything was proceeding on course.

  As for Todd Park, who was now the chief technology officer at the White House, he had tried to go to Lambrew’s meetings, but was shut out of most of them and not given the information he requested about the status of the build. He occasionally called or emailed Chao, but Chao assured him that they were going to fix whatever problems still loomed. “Todd is just too nice a guy to have dumped on these people or gone to higher-ups to blow the whistle,” recalled one of his close colleagues. “So, he just accepted it when they told him everything was okay, and passed that up the chain, saying the CMS team was working really hard and that they were good people.”

  CMS head Tavenner was “nervous but confident,” she would later tell me. “We knew it was a big project with lots of moving parts, and I knew Henry [Chao] was nervous. But tech people are always nervous at launch.… He never said that we needed to delay it. And, frankly, we were much more focused on the marketing and whether we could get the message out so people would come to the exchange.”

  “OBAMACARE WILL QUESTION YOUR SEX LIFE”

  Tavenner and the rest of the Obama team couldn’t be blamed for worrying about getting their message out. There was all kinds of noise that they had to shout over. As the October 1, 2013, launch approached, a barrage of Republican attacks increasingly picked up traction in the press.

  The Republicans made headlines with a charge that the economic recovery was lagging because 8.2 million part-time workers couldn’t find full-time work because the employer mandate requiring full-timers to be given health insurance made it too expensive for them to be hired. Yet the CBO had said the mandate’s effect on employment would be minimal. Besides, the mandate had now been delayed for at least a year.

  The New York Post ran a column—which was then circulated widely online—headlined “Obamacare Will Question Your Sex Life.” The article tried to twist the law’s incentives to expand the use of electronic medical records into a mandate that people had to tell the government whether they were “sexually active.” The author was Betsy McCaughey, a conservative healthcare activist and former New York State lieutenant governor, who had launched the “death panel” charges in 2009 that Sarah Palin had trumpeted.

  There were multiple stories, including a front-page article in The Wall Street Journal, describing how the young invincibles were unlikely to sign up because the Obamacare premiums they would have to pay would be so much higher than the insurance they could buy now. Although that was often true, it was not the full story. First, the insurance they could buy under Obamacare had far more complete coverage, including for preventive care, than the policies many had been buying, some of which had such severe limits that the coverage was nearly worthless. (Remember how Sean Recchi’s and Steven D.’s insurance coverage evaporated when they got cancer?)

  Second, and most important, the premiums the press usually described didn’t take into account the subsidies most Americans would get from the government to help pay for them. That gap in most of the articles describing the high premiums was, in large part, the Obama administration’s fault. The political team was still gun-shy about touting how much of a welfare program Obamacare actually was.

  As October 1 neared, the press came up with their own negative stories largely based on ammunition supplied by the stumbling launch effort.

  When the administration finally announced that the small business exchanges that Sebelius had promised to Baucus would be “ready in every market” would not be ready, Politico’s headline was “Another Obamacare Delay.” The article reported that a planned Spanish language version of the website was also being put off, and mentioned that a link allowing the federal exchange to transfer Medicaid applications to the states electronically had been delayed earlier that week.

  Republican senator Orrin Hatch of Utah, who had been a booster of Baucus’s reform ideas at the June 2008 summit, gave Politico a killer quote to end the story: “This law will never be ready for prime time. It’s what happens when government takes over healthcare.”

  Another Politico article—“Obamacare: One Blow After Another”—tied the dropped or delayed exchange features with the Republican governors’ refusal to launch their own exchanges or to expand Medicaid, along with the overall “unrelenting Republican opposition,” to paint a picture of a program that was just plain jinxed.

  All of the incoming fire directed at Obamacare seemed to come together on the home page of Matt Drudge’s Drudge Report on September 23. Featuring a picture of President Obama in a surgeon’s gown staring out at readers and holding a stethoscope pointed at them, Drudge’s headline, in red, was “T Minus 7 Days.” Surrounding that were these subheadlines linking to other stories:

  • “Doctors Brace for Health Law’s Surge of Ailing Patients.” This was a Bloomberg Businessweek article that was, in fact, a balanced story speculating that hospitals might be overwhelmed with newly insured patients (which never happened, in part because there is an oversupply of hospital beds in the United States), but pointing out the obviously positive impact of people getting access to healthcare for the first time.

  • “Forbes: Obamacare Will Increase Healthcare Spending by $7,450 for Family of Four.” This linked to an opinion piece in Forbes, written by someone who had a grant from a conservative foundation to study healthcare economics. More important than the writer was his math, which confused overall national expenditures for healthcare, which obviously would go up under Obamacare as more people got care, with a family’s expense. And a close read revealed that the $7,450 in the headline was the supposed total increase in cost over eight years.

 
• “Movement Grows to Repeal Obamacare Exemption for Congress.” This was an issue that opponents had cooked up, by distorting a provision inserted into the law by Republican Charles Grassley. When Grassley was still negotiating with Baucus, he would later tell me, he mentioned to Baucus that at a town hall meeting someone had asked why, if these exchanges were going to be so great, members of Congress shouldn’t have to use them. Grassley thought it was a good idea, and so did Baucus.

  So Grassley’s staff had written a provision requiring members of Congress and their staffs to use the exchanges to buy insurance. The provision, as proposed by Grassley, also made clear that the government would still pay for the insurance for the members and their staffs just the way it now did. They would just have to use the exchanges to buy it and get reimbursed by the government for the same share the government already was paying. After all, why should congressional staff be the only employees thrown off their employers’ insurance under Obamacare?

  However, when the final bill was drafted, the language had somehow become less clear, and there was a plausible, though tenuous, way to read it as not providing for the same employer reimbursement that had always been in place. For staffers making $80,000 a year with families, that could mean a sudden $10,000 or $15,000 drop in income.

  To fix the problem, members of Congress from both parties, including Grassley, had suggested that the federal Office of Personnel Management should issue a clarification that made sure Grassley’s intention would prevail. But now this had been exploited by the Obamacare opponents. Across the blogosphere and cable news echo chamber there were outraged complaints that Congress and the administration were secretly seeking to exempt Congress and its staff from the horrors of Obamacare.

  Some of the negative press had to do with the fact that anything bad about healthcare now had a new law, or person, to blame it on. One of the most courageous aspects of Obama having persevered and insisted on getting broad reform passed was, as his communications director Jennifer Palmieri later told me, that “we knew that from now on we owned everything about healthcare, good and bad.”

  Employers had been cutting back on their insurance benefits for years. Now, when they announced higher deductibles or co-insurance obligations, they could blame it on Obamacare. Most did, which often resulted in news stories about the new burdens being put on workers. It was true that the more generous coverage of preventive care that was now required for all insurance packages added extra costs. But that was not nearly as much of a factor in raising premiums as were the continuing upward trends in medical costs. Besides, that more complete coverage made the workers’ insurance more valuable.

  Similarly, when firms dropped coverage of workers altogether, which was another long-term trend, most of the press coverage linked the move to Obamacare, although Obamacare would force those same firms to add coverage once the employer mandate kicked in.

  Even the coming Obamacare changes meant to contain costs got a negative spin. Now, whenever hospitals announced job cuts or other cost-cutting measures, which was not often, it was blamed on the new law’s tightening of Medicare payments to hospitals—which had been negotiated with the hospitals’ lobby in return for hospitals getting all of those newly insured customers.

  Besides, if healthcare costs as a percent of the economy were going to be cut, that had to mean that the abnormally high percentage of American workers employed in the healthcare industry—about 16 percent versus less than 10 percent in France, which had better healthcare outcomes—had to come down. So, yes, jobs would be lost.

  Of course, hospitals talked about the cuts not only as costing jobs and hurting the economy but, more poignantly, as endangering patients. That piece of the blame game had started in December 2012 when The New York Times ran a story about how threatened cuts in hospital payments might affect patient care. Steven Safyer, chief executive of Montefiore Medical Center, a large ostensibly nonprofit hospital system in the Bronx, complained to the Times, “There is no such thing as a cut to a provider that isn’t a cut to a beneficiary.… This is not crying wolf.”

  Actually, Safyer seemed to be crying wolf to the tune of about $196.8 million, according to his hospital’s IRS filing for the year closest to when he talked to the Times reporter. That was his hospital’s operating profit. With $2.586 billion in revenue, Safyer’s business was more than five times as large as that of the Bronx’s most famous enterprise, the New York Yankees. Surely, without cutting services to patients, Safyer could have cut what had to have been some of the Bronx’s better non-Yankee salaries: his own, which was $4.065 million or those of his chief financial officer ($3.243 million), his executive vice president ($2.22 million), or the head of his dental department ($1.798 million).

  PTSD?

  Polls taken throughout September 2013 showed the cost of all the bad press. CNN reported that support for Obamacare had slipped from 51 percent in January to 39 percent. Fox News reported that “68 percent of Americans are concerned about their personal healthcare” under the new law. A poll by the Kaiser Family Foundation (which specializes in healthcare issues) found that 64 percent of all Americans and 74 percent of uninsured Americans did not know the exchanges were opening on October 1, and “slightly over half of those polled said they do not have enough information about the law to understand it.” An Atlanta Journal Constitution survey echoed the same lack of awareness, but noted that a higher number disapproved of it than said they understood it.

  These and other polls generated their own headlines and still more bad-news stories.

  About ten days before the launch, I asked one of the press people at CMS whether anyone was considering a delay in the launch in order to make sure everything would work smoothly.

  “Are you kidding?” he shot back. “Do you have any idea what they would do to us?”

  He then described the mood there as “all of us walking around with PTSD”—post-traumatic stress disorder. “We are all just in a defensive crouch, afraid to do anything or say anything. We just want to launch and prove everyone wrong.” Two of his colleagues used the same PTSD analogy that day.

  Public relations people and government administrators comparing their stress to that of soldiers stopping bullets or stepping on improvised explosive devices was more than an over-the-top expression of self-importance and self-pity. It was emblematic of their amazing ability to be indignant—to assume the role of the victims—when it was their own failure to govern that had fortified and emboldened the opposition. From the president and Valerie Jarrett on down, they had sloughed off the details of governing when it came to their most important and difficult domestic initiative. It was as if they either believed that they were big policy thinkers who were above worrying about the details of making the law work, or that they didn’t understand that effective government does not happen automatically. Or both.

  All of which had produced the ammunition for the fierce, multi-front attacks that had, indeed, shocked them. Many of the people working on Obamacare at CMS and HHS, even the press spokesmen, were veterans of congressional staffs or advocacy groups that had been in the healthcare reform fight for years. They believed in the cause, so much so that they had gone along, though not always happily, with the strategy of accommodating the Republicans by adopting the Republican Romneycare plan. To the extent that the new law was so complicated that there were all of these hiccups in implementing it, that was only because those accommodations to the conservatives involved strapping reform onto the old patchwork system instead of scrapping it and going with the single-payer, Medicare-for-all alternative that most of them favored. In their indignant view, Republicans should be the last ones to attack them for that.

  In 1936, Social Security enrollment had been delayed because no one in the pre-digital age could figure out how to create a system that would produce twenty-six million uniquely identifiable account numbers for America’s workers. But although Republicans had relentlessly attacked Social Security, once the law was passed the blowbac
k over the launch problems had been relatively minimal. That was a management dilemma, not a political issue.

  With little political fallout, Lyndon Johnson got Congress to delay the deadline for signing up for Medicare by two months in 1966 because he wanted more people to have a chance to enroll. (Ninety percent of those eligible had already signed up, which apparently was not enough for LBJ.)

  Times had changed. Congressional districts had been gerrymandered to make legislators more worried about primary challenges from their right or left than about pleasing the middle. Big money had come to dominate campaigns, issue advocacy, and lobbying in a way that similarly encouraged fighting until the bitter end, rather than compromise.

  So, the CMS people launching Obamacare were right. Almost anything anyone did or said threatened to spark another firefight in today’s Washington. In September 2013, they didn’t dare look up from their foxholes and tell the White House that October 1 wasn’t going to happen.

  LIKE APPEASING THE NAZIS

  The Republicans, of course, wanted more than a delay. They wanted to block the law for good. And, as with Senator Cruz of Texas and his defund rallies, some were willing to go further than others to make that happen.