Monday, October 07, 2013

What's Wrong With the Exchanges?

When the insurance exchanges went live last week, people all over the country tried to access the system. Almost none of them got in? Almost none of them got in. The official explanation was that the opening day crowd overloaded the system.

The few who did get in discovered that they had to create an account before they could browse insurance rates. Creating an account includes answering some personal questions based on information from credit agencies. This would be similar to Amazon requiring you to enter your credit card and shipping information before it shows you the top seller list.

Several things are going on. The first is that the system just wasn't ready. Three years is a short amount of time to create a system like this from scratch. The system has not been properly load tested and there are numerous bugs left in the system. It is an alpha release rolled out as a finished product.

The Obama Administration should have admitted that the exchanges weren't ready and delayed implementation. They did not for political reasons.

The requirement to create an account before you see rates is different. It turns web sites on their head but it makes sense if you remember the Obama Administration's history of being to clever by half.

I suspect that the designers had two thoughts in mind. The first was that everyone has to sign up for insurance so they might as well force them to create an account at the beginning.

The second consideration is that the policies in the exchanges aren't that good. If you allowed someone to just browse, they might see this and give up, especially when presented with a complicated enrollment process. By putting the enrollment up front, it means that people have already invested time in the process. Even if they don't like the policies offered, they are more likely to choose one to justify the time and effort they have already put into the exchanges.

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