The Con and Other State Exchange Black Holes

Posted: Nov 21, 2013 9:05 AM

"It's not my dog. He didn't bite you. Besides, you kicked him first."

Thus the trial lawyer's complete defense. And President Obama's too when it comes to the epic fail of Obamacare:

"He didn't know it was so badly constructed."

"It's working better now."

"And besides, the state exchanges are running so smoothly that they prove the concept is a good one. Too bad those Republican governors blocked other state exchanges"

This last bit of malarky seems to have been swallowed whole by a media eager to spin for the floundering, fading, 37% approval-rating president.

One example: The reliably left-wing (and reliably fading from sight and relevance) Los Angeles Times ran a story Monday with the fabulous headline "Healthcare plan enrollment surges in some states after rocky rollout."

Read the article and you find very few actual, specific figures and hard numbers, though, and no figures at all about the projected enrollments from earlier in the year, or the pace at which enrollments must arrive in order to meet California's share of the national goal of 7 million non-Medicaid enrollees paying premiums by the end of March.

Look through the article for any word that more than 1 million Californians have had their policies cancelled under the new law.

This is basic reporting, and it isn't being done. In fact, the state exchanges --while not all as abjectly miserable failures as are close behind the federal failure in ineptitude and some are actually worse.

One survey cited Hawaii's exchange as the worst, but the Christian Science Monitor's recent report tabbed Maryland's as rock bottom, including this summary:

"• All 11 state-run exchanges had at least 1,000 enrollees, led by California at 35,364. By contrast, of the 36 states using, 27 had fewer than 1,000 enrollees.

• Within the 11 states running their own exchange websites, results vary widely. Vermont and Connecticut have done a lot better than Minnesota or Nevada, in the share of potential enrollees signed up. Maryland, where website users have run into significant technical challenges, is signing up people at a pace only slightly faster than Delaware, a neighboring state that’s relying on"

Here's the problem with this and almost every other example of "reporting" on the state exchanges: An "enrollee" isn't truly "covered" until he or she has made a payment and been issued a policy. There are significant connection issues between application and actual coverage issuance throughout the entire system, and the directors of the state exchanges are not leveling with the press --or the press isn't asking-- about the honest-to-God effective medical coverage policies being issued and upon which consumers can rely.

The biggest con of all seems to be running out of California, where the huge flaws in the "" scheme are getting easier and easier to understand as a fraud upon the people of the Golden State, even as the Los Angeles Times and other MSM outlets flee the facts.

The executive director of, Peter Lee, declined to appear on Wednesday’s radio show, but found time to spread more misinformation about the Obamacare subsidiary in the Golden State's Central Valley. From Bakersfield CA Channel 9's report:

"Peter Lee, Executive Director of Covered California, spoke at Clinica Sierra Vista Wednesday afternoon.

The East Bakersfield clinic has had 46 people become certified enrollment counselors to help people through the enrollment process.

Lee said Covered California had over 177,000 people complete applications for healthcare in October.

According to Covered California almost 60,000 enrollment applications were started from November 9 through November 16.

Peter Lee also said the Covered California website has been much more successful than the much maligned site.

'Our website is working just fine,” said Lee, “Actually 70% of people that go through the enrollment process online said it was easy.'”

Note that Lee does not distinguish between Medicaid applicants and non-Medicaid applicants, either for the October or the partial November numbers. Note the "were started" language for the November application number.

The crucial numbers would refer to actual paying customers of the new plans, even those receiving sizable subsidies. Who, if anyone, has made a payment to their new health plan? Almost certainly no one, which Lee will excuse as unnecessary right now. Who, at least then, has gotten a real bill? Who has in hand a policy that will pay claims incurred after 1/1/14?

How many people have a new insurance card in their wallet with a policy number and a known price, deductible and doctor network?

Compare Mr. Lee's puff talk with this article from January ion the Sacramento Business Journal which states 4.7 million California's may be served by eventually, but without a timetable.

As for the "working fine" declaration, well, read this post.

Ask yourself what the month-by-month enrollment in non-Medicaid policies must be to make the announced goals for Here's what the comprehensive assessment of conducted by California's hospitals concluded regarding the number of non-subsidized enrollees needed this year and beyond:

"The long-term goal of Covered California’s marketing and outreach efforts is to provide coverage to 5.3 million of California’s residents. It will take many years to achieve this goal.

The goals for enrollment of individuals in subsidized coverage through the Covered California marketplace, or to purchase health coverage without subsidies in the individual market for the next few years, are as follows:

  • 1.4 million by 2015
  • 1.9 million by 2016
  • 2.3 million by 2017"

Now, with the paltry number already signed up (backed by an enormous expenditure in PR dollars), and against the backdrop of declining ad budgets and rising public suspicion of the security and efficacy of the website and especially the program and its staggering costs, who believes the nonsense peddled by Mr. Lee in Bakersfield Wednesday? Other than the Los Angeles Times, that is?

When does the MSM start asking Mr. Lee and his team hard and all the other state questions? When does's Board of Directors? Governor Brown? Anyone?

After discussing the con on Wednesday's radio show, I got the following email, the author of which I will keep anonymous for obvious reasons:


I am currently working to implement ACA for a major insurer in California. You have been talking about claiming that 50,000 enrollees is a win for Covered California even though the numbers fall far short of the estimates. It's even worse than that. We have yet to fully process a clean file from the exchange. At the insurer level, this effectively means that we have enrolled and effectuated zero users as of today.

The process requires enrollees to make a payment to be truly "enrolled". The state anounced in September that their payment processing would not be made available to enrolless until 2014 sometime. Covered CA was supposed to process a binder payment when users enrolled but they couldn't get it to work. Without being able to process payments, nobody has bene fully effectuated - at least at my insurer.

Once we process files, we will notify enrollees that they must make a payment before they are enrolled. I have serious doubts that we will see high rates of payments which means that the current estimates of 50-60K enrollees will drop dramatically when people are asked to pay to finish their enrollment. We don't even know who has enrolled for our plans yet.

It is truly a failure.

I'm sending from a personal e-mail account - please keep this anonymous as I need this job!


All across the country for the past five years, the Manhattan-Beltway media elites and their country cousins swallowed the Obamacre rhetoric and din't push, didn't prod, and didn't ask basic questions.

The crash of has been so spectacular that the MSM couldn't avert its collective eyes, so they cover it intermittently.

But not the story of the state exchanges. There the same journalistic malpractice is repeating itself. The con goes on, abetted by left-wing journalists on dying platforms, wondering why they have ever declining pools of readers.

Trending Townhall Video