Should You Be Paying Attention to This New 35-Day Obamacare Countdown?

For more than 100 days we counted down to the opening of state and federally run health exchanges as mandated by the Patient Protection and Affordable Care Act, which you probably know better as Obamacare. And for the past 26 days, the vast majority of Americans has been adding up the number of days they've tried to access the health exchange in their state without any luck.

With the exception of close to a dozen state-run health exchanges that have seen decent enrollment figures despite minor traffic overload and technical issues, the rollout has been marred by innumerable glitches on the federal exchange, which have appeared as everything from incomplete insurance applications sent in to insurers to faulty prices being offered to consumers. Other users can't even get past the personal identification stage of the process. In short, things haven't run nearly as smoothly as the Department of Health and Human Services anticipated.

Setting the record straight
What we haven't had during this process from regulators was any clarity as to when these problems would be fixed and exactly how severe the problems were in the first place. We did hear rumors from USA Today earlier in the week that Verizon (NYSE: VZ  ) was likely to be hired to utilize its networking expertise to diagnose the federally run health exchange,, which covers 36 separate states. Whether that comes to fruition and is officially announced remains to be seen, but Verizon alone is unlikely to be able to fix the enormity of problems seemingly apparent with the exchange.

Yesterday, though, finally brought some concrete answers from the White House. We learned from White House spokesperson Jeffery Zients that UnitedHealth Group (NYSE: UNH  ) subsidiary Quality Software Services, or QSSI, is now going to be the responsible contracting party overseeing the technological progress and fixes of Previously the Centers for Medicare and Medicaid Services was in control, but critics of Obamacare had questioned its role as technical director of the website with such little previous experience in leading such a complex rollout.


The other long-awaited concrete answer we received is the timeframe as to when would be working smoothly. According to Zients, the website isn't a lost cause as some people had suggested and placed an end-of-November target, 35 days from now, on getting everything working smoothly for a majority of Americans. Zients also noted that through three and a half weeks, approximately 700,000 applications between state and federal exchanges have been filled out across the country. This doesn't exactly tell us how many of those people were able to enroll, but it still leaves the daunting target of 7 million enrollees many miles away.

While I'm certainly glad that regulators have finally come clean about's problems and put a company clearly in charge of's technical aspects in UnitedHealth Group's QSSI, I'm somewhat torn about the prospect of regulators placing a 35-day countdown on fixing

Why a 35-day countdown is great news
On one hand, setting a definitive date could be viewed as a positive for a number of reasons. To begin with, it provides accountability when previously there had been no measure of accountability. We clearly know QSSI is in charge of technical operations and there's a good likelihood that other contractors could be brought in to help diagnose some of the technical problems. Trust is going to be a key factor of luring in uninsured Americans, and this increased transparency via visible goals could go a long way to establishing that trust.

Another point of contention is that a visible countdown improves American's awareness of the new health reform law. Regardless of whether it's good or bad press, simply having the PPACA in the news on a daily basis is raising awareness of a law that roughly two-thirds of Americans had little to no knowledge of just weeks ago. The ability to make informed decisions utilizing transparent pricing on state and federal health exchanges is one of the primary reasons Obamacare was developed. If people don't understand the law, they can't make informed decisions.

Why setting a deadline is also silly
Then again, setting a concrete countdown to a "fixed by" date seems equally meaningless for its own set of reasons.

For one, we already know that the majority of people are going to wait to the very last moment possible to sign up for health insurance. We live in a land of procrastinators (I should know -- I'm one!), and it's really difficult to get someone to sign up for insurance now when they aren't going to be billed for or receive the benefits of a product for two months and a few days from right now. Even more so, with the cutoff date looming at the end of March, many of those individuals who would prefer not to have health insurance in the first place, but will purchase it anyway because of the individual mandate, will wait until the very last minute to make their purchase, thus avoiding three months of premium at the beginning of the year. In other words, this is going to be a very back-loaded sign-up period and I wouldn't expect enrollment to exactly soar even if the website were running smoothly come Dec. 1.

Also, while transparency is a great thing, as is accountability, what sort of consequences will there be if isn't ready to go by Zients' end-of-November proclamation? Obviously, regulators can install a new contractor to oversee, but there aren't any real consequences to these existing contractors or involved parties should the deadline be missed. Really, the only thing at stake here is another public shaming of, the HHS, and the Obama administration should the website fail to be ready on time.

What does this all mean?
Ultimately, it's looking as if enrollment is going to be pushed out as long as possible for many Americans. The real challenge for regulators is going to be whether they can lure young, healthy adults into signing up, especially given the numerous technical glitches that tend to drive the younger and more technically savvy generation away.

The story for your investments, though, hasn't changed much. Insurers such as Aetna (NYSE: AET  ) are still going to be looking at disappointing enrollment figures for the first couple of quarters as Americans wait until the last couple of days before the end of the coverage cutoff to sign up for health insurance. While this really doesn't affect insurers over the long haul, expectations for rapid gains out of the gate have been baked in for some time. For Aetna, its strong ties to federally run states could put an extra damper on its results over the near-term.

Not all insurers are in bad shape over the near-term, though. eHealth (NASDAQ: EHTH  ) rocketed higher yesterday after reporting what looked like a ho-hum third-quarter report. The real boost came from its 24% membership growth, which could accelerate even faster given the problems with eHealth has years of experience operating private platform health insurance marketplaces for individuals, families, and small businesses, and it could continue to thrive as long as struggles.

For CGI Group (NYSE: GIB  ) , QSSI's appointment to head the technical aspects of might be the best thing to happen to it in weeks. The success or failure of is now squarely on QSSi's shoulders, allowing CGI Group to possibly back away from this PR nightmare. In addition, QSSI's open commentary about last-moment changes to the system and the government's lack of testing is helping to take some of the heat off of architect CGI Group. I'm still concerned that CGI could face long-term headwinds from this debacle that could cost it future orders, but it remains to be seen if that will come to fruition.

For now, the clock is ticking; now let's see whether regulators can deliver on their 35-day window!

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Read/Post Comments (9) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 26, 2013, at 6:34 PM, quacker wrote:

    I wana bet some one on that timetable

  • Report this Comment On October 26, 2013, at 6:34 PM, allenmet wrote:

    They'll never fix it in 35 days.

  • Report this Comment On October 26, 2013, at 7:13 PM, johnE wrote:

    Obama is getting daily free press and will look like a hero when its fixed, holdup is by design to justify the development costs and cover up the $$$$ amount you will have to pay for limited coverage...Obamascam

  • Report this Comment On October 26, 2013, at 7:16 PM, Foreeverlong wrote:

    I am so sick of Obama, and his ""one man" program to change America. I wouldn't pay a bit of attention to Obama's 35 day deadline.Why, why, why did you people re-elect this guy. He is killing the U.S. economy by doing all of the wrong things.

  • Report this Comment On October 26, 2013, at 7:41 PM, chaser55 wrote:

    I want 2 know if illegal aliens get this policy or do you prove your an american citizen before this is available.

  • Report this Comment On October 26, 2013, at 11:43 PM, skypilot2005 wrote:

    Why would anyone be surprised by the website problem? It is the signature achievement of a President whose primary “claim to fame”, before being elected President, was being a “Community Organizer”.

    The website problems are just a precursor to the disaster coming to our Health Care system. This is going to be “Change You Can Believe In” for the worse. Count on it.

    I am not surprised that I saw Democrats blaming Republicans for the website not working, today.

    Even though not one Republican voted for OBama Care and not one Republican has anything to do with operating it....

    Sadly, some citizens will believe the "Regime"'s lies.

    Next, we'll hear "it's Bush's fault".

    Come on..........

  • Report this Comment On October 27, 2013, at 12:06 AM, Netteligent09 wrote:

    Blue Screen of Healthcare Plan affectionately known among IT Pros as the Spectacular Crashes.

    CGI Federal is in Fairfax VA is only front end, CGI HQ is in Quebec, Canada, is known to contract out their jobs overseas and lack quality control of their programmers from India.

    UnitedHealth Group unit Quality Software Services Inc (QSSI) is even worse.

    These companies have had bad reputations but special connections.

    Small business contractors in America are innovative with quality results and get the jobs done. All smart American employees left to be small contractors with little inputs. There are many professional American programmers with knowledge and unemployed due to cheaper outsource to India and China.

    Learn from development and management teams in India and always ready to say yes to support the boss. You have to be part of the system. Just listen, go to do your work and appear busy for the next 30 years with lucrative contracts.

    Most real development is in India and other countries.

    Who will own, maintain, support, and continuous development for the rest of its useful life?

  • Report this Comment On October 27, 2013, at 12:10 AM, Netteligent09 wrote:

    One more thing: are you willing to put these important personal information in the hands of outsiders?

    Sometime, it is better to start from beginning and do it right.

    More than $700 Million already spent on the website for this P*O*S bill and the A*S*S* . What will the government do? The government will pay their incompetent CGI and QSSI contractors, even more money to fix the problems the contractors caused to begin with. Government is only want to deal with big players with all rosy promises and they've got what they wanted. The cost of fixing these platform will be far less than the 24 Billion dollar 16 day shut down by the GOP.

  • Report this Comment On October 27, 2013, at 1:16 AM, dannystrong wrote:

    The Feds will cook the books no matter what. Numbers in the (somewhat more successful) separate state units will be rolled in quietly (and probably more than once) to "prove" that everything is well, and you should believe the President and his flunkies, and not your lying eyes.

    This system is a disaster, because it was created by people who didn't know what they were doing for people who didn't know what they wanted -- just that something had to be 'ready' by October 1. Never tested? Doesn't matter. Subcontractors don't talk to each other? Doesn't matter. Design decisions critically flawed? Doesn't matter.

    It is fortunate indeed for the President that media pundits have even less understanding of what's going on than he or his staff do, or else they'd be calling it the disaster too. Well, maybe not -- after all, they've just sort of collectively shrugged about all the other disasters. He might be a moron, but he's a moron wearing the blue. Think of the media as junior members of the crips. It's a better metaphor than you might at first suspect.

    The goal all along was to throw us all off the cliff and hope the President could knit us all parachutes on the way down (though not exactly caring if it actually happened.) Think of this as the President's policy toward Syria, just playing with the health and wealth of citizens, not foreigners.

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