If you were to start pointing fingers and assigning blame for who may be at fault for the lackluster opening of Obamacare's federally run health exchange, Healthcare.gov, you'd quickly run out of fingers.
The first five weeks and change haven't been very memorable for many Americans eager to sign up for Obamacare and get health insurance. According to internal memos released at the end of October, a meager six people out of the 4.7 million that visited the website on the first day from a combined 36 states managed to fully sign up and enroll for health insurance. By day two, the combined successful enrollments had risen to only 248.
In short, the scope of the problems, ranging from server overloads to poorly constructed IT architecture and source code, is still somewhat unknown, and it's casting doubt on whether Obamacare can be successful if the Obama administration can't even get Healthcare.gov off the ground.
State-run exchanges outperform -- except for these two
Statistically speaking, most state-run exchanges are running circles around Healthcare.gov based on what limited enrollment data we have thus far. According to Politico, the early stage Obamacare enrollment champions have been New York, Kentucky, and Washington state, which, despite minor problems, have delivered the bulk of state-run health insurance enrollment. New York and Washington shouldn't come as a big surprise here, given that both states were strongly in favor of Obamacare's approval, but it should be noted that Kentucky has been a positive surprise so far and could portend strong enrollment for other Ohio River Valley and Southern states -- should Healthcare.gov get up and running, that is.
On the other end of the spectrum we have the technical disaster that is Oregon and Vermont, the two state-run exchanges that are far and away in worse shape than any other health exchange in the United States. Hawaii had been a big question mark as well, but after a two-week delay in opening its site for enrollment, and enduring a crash immediately upon going live, Hawaii has been running relatively glitch-free ever since.
If a tree falls in a forest ...
For Oregon, the original plan was to have Cover Oregon, the state's health exchange, up and running by Nov. 1. As you can obviously tell, that deadline has come and gone, and there's concern that Oregon may not even have its website up and running by the Dec. 15 enrollment cutoff to ensure health coverage by Jan. 1.
According to The Oregonian, some 150,000 people are set to have their health insurance policies cancelled on Jan. 1 as insurers phase out policies that no longer meet the beefier minimum benefit requirements as set forth by the Patient Protection and Affordable Care Act. This puts the state and its residents, which have for the most part been ardent supporters of Obamacare, in quite the pickle.
Now here's the really interesting part: The contractor assigned to build Cover Oregon that's been working around the clock trying to fix its problems is none other than Oracle (NYSE:ORCL). Keep in mind that the Department of Health and Human Services has already turned to Oracle as one of the companies it's highlighted in its so-called "tech surge" to help diagnose and fix Healthcare.gov. Yet Oracle is having all sorts of issues figuring out how to repair Cover Oregon's numerous technical issues. With Oracle's cloud-based revenue growth already weaker than many of its middleware peers, it can ill afford any more bad publicity.
In response to these ongoing problems Oregon has announced plans to hire 400 paper processors to handle what are expected to be an influx of paper applications over the coming weeks in lieu of the Dec. 15 cutoff period to receive coverage by Jan. 1. This is certainly a state worth keeping your eyes on as it's expected to play a large role in getting enrollment figures to HHS Secretary Kathleen Sebelius' target of 7 million new enrollees.
The Obamacare disaster du jour
Despite being the second-least populated state in the country, Vermont's state-run health exchange, Vermont Health Connect, is without question the least functional of all.
No one expected Vermont's health exchange to be operational on time, but many figured it wouldn't have any problems meeting the already lenient Jan. 1 target to open for business. However, Vermont Gov. Peter Shumlin last week was forced to yet again delay the opening of its state-run health exchange for at least another three months. With that in mind, Shumlin also announced that Vermont residents would be allowed to stay on their current health plans through at least March 31.
As may come as no surprise, the lead contractor behind the bungled Vermont health exchange is none other than CGI Group (NYSE:GIB), the same lead architect that's taking fire for its leading role in constructing the relatively non-function federal website, Healthcare.gov. If the hits just keep on coming for CGI Group, it could very well begin to lose future contracts, which would almost certainly affect its top and bottom lines in a bad way.
If there is a bright spot here, it's that on a percentage basis Vermont had the second-lowest uninsured rate in the country next to Massachusetts before the start of Obamacare, so the monumental health exchange disaster may not wind up being so catastrophic for the state after all.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.
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