5 Quotes That Sum Up Obamacare Exchanges Woes

A lot has been said about the Affordable Care Act, commonly known as Obamacare. And much has been said particularly about the health insurance exchanges established by Obamacare. Here are five quotes that pretty much sum up what has happened with those exchanges this year -- and why they matter for investors.

HHS Secretary Kathleen Sebelius. Source: U.S. Department of Health and Human Services on Flickr. 

1. "No. We are determined and on track to meet the Oct. 1 deadline." -- Health and Human Services Secretary Kathleen Sebelius, April 12, 2013. 

Sebelius made this remark in response to a congressman's question about whether a backup plan was needed in case the Obamacare exchanges couldn't roll out on schedule. The projection of confidence in the ability for the exchanges to be fully operational on Oct. 1 continued in the subsequent months.

2.  "... Factors such as the still-evolving scope of CMS's required activities in each state and the many activities yet to be performed -- some close to the start of enrollment -- suggest a potential for challenges going forward." -- Government Accountability Office, June 19, 2013. 

The federal watchdog agency pointed out several significant issues found in its review published in June. What seemed like the most troubling issue then was that, as of May, 44% of key activities needing to be done by the end of March were behind schedule. Perhaps the more significant issue, though, really was the GAO's comment about "still-evolving scope" just four months prior to the scheduled launch of the exchanges. 

3. "To make further improvements to the system, we will be taking down the application part of the website for scheduled maintenance during off-peak hours over the weekend." -- HHS spokesperson Joanne Peters, Oct. 4, 2013. 

Fast-forward the clock to the first week of October. The Obamacare exchanges launched on time, but with major technical problems. Only four days after starting up, the federal government brought the exchanges down for weekend "improvements." Unfortunately, problems persisted into the following week and beyond. President Obama subsequently promised a "tech surge" to work out "the kinks in the system." 

4. "The system didn't receive adequate end-to-end testing." -- Optum VP Andrew Slavitt, Oct. 24, 2013. 

Andrew Slavitt from UnitedHealth Group (NYSE: UNH  ) business unit Optum, which owns Quality Software Services, testified before a congressional committee inquiring into Obamacare exchange problems. Quality Software Services was one of the key contractors helping to build the exchange websites. Slavitt's view that a key issue related to insufficient end-to-end testing, which was the responsibility of the Centers for Medicare and Medicaid Services, or CMS, received agreement from others involved in the development.

Cheryl Campbell, a senior vice president with CGI Group (NYSE: GIB  ) , the lead contractor on the exchanges, lamented that "no one ever gets enough time for testing." Sebelius, who had earlier expressed confidence in the exchanges publicly, said after the deluge of problems that "we didn't have enough testing" and that a year of testing was ideally needed.  

5. "By the end of November, the vast majority of consumers will be able to successfully and smoothly enroll through Healthcare.gov." -- Office of Management and Budget Deputy Director Jeffrey Zients, Oct. 25, 2013. 

Jeffrey Zients was brought in by the White House to oversee the effort to fix the exchange problems. Zients predicted that most problems would be resolved by the end of November and announced that UnitedHealth's Quality Software Services would be the lead contractor. He stated that while a lot of problems existed, those problems would be fixable -- within two months after the original launch date. 

The most interesting quotes 
While these quotes sum up the history of the troubled Obamacare exchanges thus far, the most interesting quotes in the days ahead could very well be the stock quotes of companies directly connected to how well the exchanges operate. Shares of both CGI Group and UnitedHealth have weathered the technical issues relatively well, but they're really not the most affected by what happens. Hospitals and insurance companies bear the biggest risks if Americans don't sign up for health insurance on the exchanges.

With more problems occurring on the federally operated exchanges than state-run exchanges, companies that operate in states relying on the federal healthcare.gov website could be the most affected if the problems aren't resolved timely. Tenet Healthcare (NYSE: THC  ) , for example, runs hospitals in 10 states. Nine of those states use Healthcare.gov rather than their own exchange. Tenet's stock has nearly doubled over the last year in anticipation of benefits from Obamacare.

WellPoint (NYSE: WLP  ) stands out as the major health insurer most closely affiliated with the Obamacare exchanges. The company sells insurance in 14 states -- and participates in the exchanges in each of those states. However, half of those states run their own exchange while the other half rely on the federally operated website. That potentially lessons the pain for the insurer in the event the federal website continues to experience problems.

It's quite possible that Zients' November time frame proves accurate and most problems with the exchanges are resolved by late November. Tenet, WellPoint, and others could see their shares move higher. However, if his prediction is as on track as earlier statements from key officials, shares of some hospital chains and health insurers will probably suffer more than the federal contractors. Those stock market quotes might speak the loudest of all. 

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  • Report this Comment On October 30, 2013, at 9:15 AM, Pixie1953 wrote:

    Conflict of interest or good politics?? " Andrew Slavitt from UnitedHealth Group (NYSE: UNH ) business unit Optum, which owns Quality Software Services, testified before a congressional committee inquiring into Obamacare exchange problems. Quality Software Services was one of the key contractors helping to build the exchange websites." Obamacare is going to make more millionaires out of more people than the GOP ever could have! This atrocious - Obamacare - is the largest tax hike in our history wait and see.

  • Report this Comment On October 30, 2013, at 9:19 AM, normgarry wrote:

    America USED to take in highly skilled immigrants and used them to build the America we knew up until the 60's. Now we take in low/no skilled immigrants and then enhance the welfare state so that they get free healthcare, EBT cards and Section 8 housing. I see a problem.

  • Report this Comment On October 30, 2013, at 9:33 AM, RLMerrell wrote:

    I think you missed the most important quote of all....."If you like your plan, you can keep it, PERIOD!"

  • Report this Comment On October 30, 2013, at 9:35 AM, deelf wrote:

    WellPoint (NYSE: WLP ) stands out as the major health insurer most closely affiliated with the Obamacare exchanges. The company sells insurance in 14 states -- and participates in the exchanges in each of those states. However, half of those states run their own exchange while the other half rely on the federally operated website. That potentially lessons the pain for the insurer in the event the federal website continues to experience problems. ((((shouldn't that be "lessens" the pain???)))

  • Report this Comment On October 30, 2013, at 9:43 AM, pcenemy wrote:

    sad - but i hope the 53% of the people who voted for this fool either lose their health insurance or find they have to given up a significant portion of their lives to get 'the new improved' obamacare. bottom line - the people who votef for this man and didn't know he was a blatant liar deserve to get what they voted for - and what they voted for was extremely more expensive, worse coverage, higher deductibles, decreased care ---------- if they were too stupid to see it coming, or too focused on thinking they were getting something for free or someone else would have to pay for it for them ----- how can you feel badly for them - getting what they voted for

  • Report this Comment On October 30, 2013, at 9:53 AM, jurban wrote:

    The Lyin’ King has abandoned any pretense of concern for Americans.

  • Report this Comment On October 30, 2013, at 9:55 AM, treesmiths3 wrote:

    "You will save $2500.00 per year" - Mr. Obama.

    This comment ranks highest with me, and I am counting on my President to keep his word.

  • Report this Comment On October 30, 2013, at 10:11 AM, Niems2 wrote:

    The fool has been in the White House for too many years.

  • Report this Comment On October 30, 2013, at 10:53 AM, Widowmaker6 wrote:

    you can keep your plan, you can keep your doctor, period. just another lie from the HNIC

  • Report this Comment On October 30, 2013, at 11:02 AM, daninkeller wrote:

    Anybody missing George Bush yet?

  • Report this Comment On October 30, 2013, at 11:54 AM, Fraklinmince wrote:

    Numbers, numbers, numbers, creates more nuts, by design. "we are moving forward?" Do your job, if you can find suitable employment. If not, marching in place at any job can pay bills. Hang on corrections come by mysterious means. FBI in the middle of the night, money found by accounting errors, F 5 tornadoes busting ware houses to pieces, glitches in the police state creations, etc... Will some one persuade the President to resign, and send cronies back to Chicago? The articles of Impeachment still working well. Fine tuned by Richard Millhouse Nixon. Mr. Snowden made a specific charge. "The Administration producing Oppression." The extension of this oppression, extends into community. Over the years, Managers and Doctors made attempts to remove the tenacious extending of this oppression. Managers and Doctors were removed, and had to seek employment elsewhere. It is more of the same on a larger scale, we have the right to resist Illegal. US Constitution created to protect people, and to prevent Police State. Can't change the script, because the Back Up Government does not agree with this. Back up Governments do not use money to operate. It is not about money, and it is not about republicans or Democrats. Shake off the shock and face the reality of what goes on. We did not vote for this. The fine art of swindle not so fine anymore. Focusing in one place, money attachments, when there is constant encroachment on your civil liberties. "In the name of National security?"

  • Report this Comment On October 30, 2013, at 12:21 PM, ELB1958 wrote:

    My favorite quote regarding Obamacare came from Cal Thomas in a weekend OpEd piece and pretty well sums up what has always been my position....."Ponder this for a moment: The very people who claim they are sufficiently competent to run health care, which constitutes about one-sixth of the nation's economy, can't manage to launch a workable website, even though they had at least three years to set it up."

  • Report this Comment On October 30, 2013, at 12:55 PM, kforred wrote:

    What amazes me most is the number of uninsured who pass through the busy emergency department I work in who have no idea about the exchanges. Blank stares in reply to my query about whether they've tried to buy on the website. I suspect most of them voted for Obama, if they voted.

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