Obama Administration response to online health insurance site is cool, but proposal reveals backup possibility. EHealth offers to help Covered California, too.

Ken Terry, Contributor

October 30, 2013

6 Min Read

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eHealth, which operates a leading online health insurance site, ehealthinsurance.com, has proposed that it temporarily take over the enrollment process for HealthCare.gov while government contractors try to fix the federally run insurance exchange, which has had multiple problems in signing people up for health insurance.

Gary Lauer, CEO of eHealth, announced the proposal in a press conference on Wednesday, just after Health and Human Services Secretary Kathleen Sebelius went on the hot seatdefending HealthCare.gov before a congressional committee. Sebelius took responsibility for the website's deficiencies, which included an outage on Tuesday night, the second in the past few days.

In a letter to President Obama,Lauer wrote, "We are ready to help you get this program back on track promptly, with the cooperation of the federal exchange, if you allow us to take over the shopping and enrollment process in all 36 federal exchange states --without cost to the taxpayer. While your staff is working hard to repair healthcare.gov, with your support, we can be the stopgap that is needed."

[ What's tripping HealthCare.gov? Read HealthCare.Gov Woes: Lack Of Testing. ]

The letter also noted that last summer, the Centers for Medicare and Medicaid Services (CMS) signed an agreement with eHealth allowing it to assist the federally run exchange with the enrollment process. CMS also made similar agreements with at least four other Web brokers, although Lauer didn't mention that, and a CMS spokesperson told InformationWeek Healthcarelast week that it's in the process of signing up more brokers.

Under the agreements that CMS made with the Web brokers, they were allowed to begin the enrollment of subsidy-eligible individuals for qualified health plans in the 36 states on Oct. 1. They were supposed to send their enrollment information to the CMS data hub, which determines the eligibility of applicants for government subsidies. After receiving a response, the broker would finish the enrollment and send it to HealthCare.gov, which would forward it to the appropriate health plan.

Of course, none of this has happened yet, because the online brokers can't yet connect with the CMS hub on a production basis. Last week at an earnings conference, Lauer said he expected the necessary testing to be completed within a few weeks. But at the press conference on Wednesday, he qualified his remarks, noting, "The data we've been given and the environments we've tried to test this in just aren't very good. And we won't put something up unless it works and works well. So we're not there yet. We hope to be there in the next few weeks."

What Lauer proposed to the President would hot-wire this process. Instead of having to go through HealthCare.gov, ehealthinsurance.com would go straight to the data hub, confirm eligibility, and complete enrollment. Then it would forward the enrollment files directly to the health plans, with which it already has good data connections. This would, incidentally, bypass the issues that HealthCare.gov has had in sending enrollment datato the plans.

Although Lauer said he's a strong ObamaCare supporter, it's clear that the acceptance of his proposal would be an enormous coup for eHealth. For one thing, the company would stand to make very sizable commissions from insurance companies, even if it were the federally run exchange's sole agent for just a month or two. In addition, it would give the company a big leg up on the other online brokers that are competing for consumer business in the insurance exchange. That wouldn't make those companies, such as GetInsured and GoHealthInsurance, very happy.

Although the White House has not issued an official response to the letter, CNBC quoted a spokesperson for the Department of Health and Human Services as saying that HHS isn't likely to accept eHealth's proposal because HealthCare.gov is getting better every day. HHS has promised to fix the website by the end of November.

Aneesh Chopra, senior fellow at the Center for American Progress and former chief technology officer of the U.S., told InformationWeek Healthcare in an e-mail, "I see great potential in the growth of web-based entities as a safe, secure option for consumers in addition to healthcare.gov, but not as a replacement. There is plenty of room in the market for multiple enrollment options as envisioned by the Affordable Care Act."

Covered California

At the eHealth news conference, Lauer also asked Covered California, that state's health insurance exchange, to allow Web insurance brokers to enroll people alongside the state's own efforts. Part of his argument -- as it was in the Obama letter -- is that people ages 18 to 34 would be more likely to enroll in the exchanges through an easy-to-use consumer website, and the insurance exchanges badly need those healthy young people to keep insurance rates down.

He added that, because the health plans pay online brokers, it costs the state nothing to let them enroll people in Covered California plans. In fact, the state would make money on these sign-ups because insurance companies are required to pay enrollment fees to support Covered California.

Carl Guardino, CEO of the Silicon Valley Leadership Group, which includes eHealth and many other tech companies, echoed Lauer's call for the state insurance exchange to open up to Web brokers. Speaking at the news conference, he said that Covered California should call on the expertise of not only eHealth, but also of the other experienced e-commerce companies based in Silicon Valley.

The young healthy people who are crucial to the success of the exchange, he said, "expect government insurance exchange websites to work like Google, Facebook, Amazon and Twitter." So the government has to deliver a website that is equally consumer friendly and easy to navigate as any of these companies' sites.

"The state's goal of 1.2 million enrollments by the end of 2014 will be difficult to reach without a public-private partnership to take advantage of the innovation and the technology that the private sector can offer. So I encourage and ask Covered Calif. to strongly consider utilizing the assistance of Silicon Valley's e-commerce leaders to expand access to all Californians and make the ACA the success that the citizens of our state deserve."

Covered California did not respond to a call from InformationWeek Healthcare by press time. According to its website, in the first four weeks of enrollment there were 2.1 million unique visitors, of whom nearly 180,000 started applications.

About the Author(s)

Ken Terry


Ken Terry is a freelance healthcare writer, specializing in health IT. A former technology editor of Medical Economics Magazine, he is also the author of the book Rx For Healthcare Reform.

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