Obamacare Exchanges: "Iron Man 3" or "The Lone Ranger"?

Hollywood is coming to the Obamacare exchanges, but what if the Obamacare exchanges went to Hollywood?

The latest buzz is that the White House has enlisted the help of friends in Hollywood to promote use of the health insurance exchanges established by the Affordable Care Act, commonly known as Obamacare. With this mesh of Hollywood and health reform in mind, I began thinking about the exchanges in movie terms. Just as summer 2013 saw a mix of moneymaking blockbusters and major flops, the launch of the Obamacare exchanges next week holds the potential for great success or embarrassing failure. Will they be a huge hit or a thudding disappointment -- and who wins either way? Let's go to the movies.

Source: Wikimedia Commons. 

Blockbuster
Iron Man 3 lays claim to being one of the biggest winners in theaters this summer. The latest in the Disney series inspired by the comic book character has raked in more than $1.2 billion worldwide so far. Robert Downey Jr., Gwyneth Paltrow, and company scored with nonstop action and great special effects.

If the health insurance exchanges kick into gear on Oct. 1 with no glitches, many will view the feat as a blockbuster achievement. There have been significant doubts about the readiness of the underlying technology supporting the Obamacare exchanges, particularly those run by the federal government. An error-free first week could dispel that skepticism and generate positive public relations momentum that helps build confidence for Americans who might be on the fence about purchasing insurance through the exchanges.

Several companies would likely bask in the glow if this scenario plays out. CGI Group (NYSE: GIB  ) , for example, is an information technology consulting firm that has been heavily involved with building the federal health insurance exchanges, as well as several state-run exchanges. A smooth launch for the Obamacare exchanges would be a feather in the cap that could help CGI land additional contracts down the road.

Another probable beneficiary could be eHealth (NASDAQ: EHTH  ) . Shares soared in July after the federal government awarded a deal that allows the online health insurance broker to enroll individuals in subsidized plans approved under Obamacare. If the technology behind the exchange systems works well, eHealth could see plenty of new business in coming months.

Box office flop
Some would argue that the Obamacare exchanges have much more in common with The Lone Ranger than they do with Iron Man 3. The movie about the legendary Texas ranger flopped, costing Disney more than $160 million. Even before its release, reports swirled about missed schedules and production problems.

Similar issues have plagued the Obamacare exchanges. "Operational challenges" led important functionality of the small employer exchanges to be delayed until 2015. The Government Accountability Office reported that 44% of tasks scheduled to be completed by March were still undone as of May. A security review initially scheduled for 51 days was cut down to just 10 days because of missed deadlines. The multitude of problems led Michael Astrue, who served as commissioner of the Social Security Administration until earlier this year, to state in August that "a functional and legally compliant federal exchange almost certainly will not be ready on Oct. 1."

It's easy to identify stocks that would probably take a dive should serious issues occur during the start-up of the Obamacare exchanges. Clear winners from that potential outcome aren't so easy to find. UnitedHealth Group (NYSE: UNH  ) might not experience a huge uptick as a result of exchange problems, but shares could receive a bump.

UnitedHealth CEO Stephen Hemsley said earlier this year that the large insurer will largely stay on the sidelines with respect to Obamacare exchanges. Hemsley's concern wasn't about technical issues, though. He prefers a wait-and-see stance because of fears that the initial wave of enrollees will have high medical costs.

Coming attraction
Sometimes movies that are expected to fail actually perform well at the box office. At other times, anticipated winners end up being total duds. Studios don't know for sure what will happen until their movies hit the silver screens and audiences show up -- or don't.

The Obamacare exchanges will probably follow a similar path. We won't know until the audiences respond. It won't be very much longer, though. The exchanges will be showing on your screens (of the computer rather than theater variety) beginning next week.

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  • Report this Comment On September 24, 2013, at 4:55 PM, misterfrost wrote:

    Obamacare it's going to be more like "A Clockwork Orange" than anything else.

    " Well. Well, well. Well, well, well, well, if it isn't little Alex. Long time no viddy,

    It will be time for the old in out, in out and Obama will get all the stars on the viddy to nudge us on our way..

    "Well, put it this way, I feel very low in myself. I can't see much in the future, and I feel that any second something terrible is going to happen to me."

    Thanks Hollywood, you've been so cooperative..

  • Report this Comment On September 24, 2013, at 5:01 PM, CrazyDocAl wrote:

    Since the exchanges are already being filled up with older part time workers by companies that found a cheap way out of the cost for health insurance I would say flop.

    These are not the young healthy people the exchanges need to keep costs down. They are part time workers who will get subsidies driving up the government's cost, The subsidies are not free nor is the punishment for these businesses for doing so going to cover the unforeseen costs. That money will need to come from somewhere (any guesses middle class).

    The idea that this will lead to a single payer plan is foolish. That would take a major act of congress, in case you missed it the GOP is not going to go along and even if the Dems got enough votes to pass it they got hammered in 2010 after they passed Obamacare. The odds on Obamacare working are very low.

    Besides how long will it be before all the healthy young adults realize all they need to do is just adjust their federal tax withholdings so at the end of the year they owe a few bucks. Since the IRS can only withhold part of your tax refund to punish you for not having insurance there's no teeth. But it's not like they know how to use the internet or social networks to pass along that information, right???????????

  • Report this Comment On September 24, 2013, at 7:00 PM, Baxter1939 wrote:

    Even after the Tax Credit a new $57 a month bill for low income people is a lot of money if they are only barely getting from pay check to pay check. And the size of the pay check doesn’t change the problem of only barely getting by to the next pay check, this occurs with people making a $100,000 a year also. So unless they been caring insurance all along these subsidized Obamacare prices is not going to set well with the people. In general if people have not been providing for themselves all along Obamacare is going to be a problem.

    .

    Obamacare with Lipstick is still just a pig.

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