The states with the four worst-performing Obamacare state health-insurance exchanges — Hawaii, Maryland, Minnesota, and Oregon — all built them with the enthusiastic, loud backing of Democratic governors and state legislatures.
One year later, there is little sign that any of those Democratic governors, or their preferred successors and allies, will suffer at the ballot box for the millions wasted on exchanges that never or rarely functioned. On paper, this shouldn’t be a partisan issue; whether you think the Affordable Care Act is the greatest piece of legislation in a generation or Satan’s handiwork, there shouldn’t be much of a constituency backing massive expenditures for online insurance shopping and purchasing systems that don’t work.
And yet . . .
HAWAII
The Hawaiian Health Connector is on its third director in less than a year.
U.S. taxpayers gave the Hawaiian state government $204 million to build the Connector system, making it one of the most costly in the nation. It failed to work properly from the beginning, and enrollment fell way below the projections, with just 10,800 people. It was expected to become self-sustaining through user fees by the end of 2014 but earned just $40,350 in its first six months, far below the $320,000 it expected. The state legislature had to step in and provide an additional $1.5 million to keep it running.
The state did add 30,000 people to Medicaid, but 75,000 Hawaiians remain without health insurance. What’s more, those who signed up may find a strikingly limited selection of options.
In August, Hawaii’s largest health insurer announced it was pulling out of the small-business side of the state’s troubled health exchange; this left only one insurance company, Kaiser Permanente, for employers. “Michael Gold, president of Hawaii Medical Services Association (HMSA), told the AP that his staff is spending too much time and money dealing with the Connector’s technical problems.”
Hawaii stands out as a state where the failed exchange may have cost an incumbent governor his job. Governor Neil Abercrombie, whose administration implemented the Hawaiian Health Connector, was defeated in the Democratic primary by state legislator David Ige in August.
Ige called the system “a disaster” in a Democratic-primary debate and pointed out that Abercrombie had appointed four cabinet members to the Health Connector’s board. The governor countered that the Connector was “a creature of the legislature.”
Hawaii may be the state with the best sign of a public backlash against the state government for the embarrassing failures.
The problems of the state’s exchange probably helped Ige in the primary fight, and both the Republican gubernatorial candidate, Duke Aiona, and former Honolulu mayor Mufi Hannemann, the candidate of the Hawaii Independent Party, are campaigning on scrapping the Hawaii Health Connector. Ige is critical of the program, but never quite calls for it to be scrapped entirely.
Polling in Hawaii is infrequent, but it appears Aiona has a shot at winning; the most recent poll put him just 4 percentage points behind Ige. Hannemann is carrying 8 percent.
MARYLAND
The Maryland Health Connection — after costing $170 million — opened for business at noon on October 1, 2013. Within a few moments, it crashed.
By the end of the day, only four people had successfully signed up for insurance through the website. Serious technical issues marred the site for months. Even when it was working, would-be purchasers confronted serious design flaws; shoppers couldn’t compare health plans until they had completed registration.
By April, the state decided to ditch the entire system and replace it with a model used by Connecticut.
Governor Martin O’Malley is term-limited and reportedly strongly considering a longshot bid to derail Hillary Clinton in the 2016 Democratic presidential primaries. His lieutenant governor, Anthony Brown, is his designated successor and also, allegedly, the O’Malley cabinet official tasked with implementing the exchange.
During the Democratic primary, Brown attempted to spin the problems at the exchange into an example of his decisive leadership. The Washington Post Fact-Checker scoffed:
When the crisis hit, did Brown spring into action and single-handedly force changes at the exchange? That’s what his comments at the first Democratic gubernatorial debate ahead of the June 24 primary imply, but we have yet to see his fingerprints on any major decisions or changes at the exchange…
The Washington Post has repeatedly asked Brown’s staff to provide information and documentation that could illuminate his role in the exchange, both before and after its launch. They have declined.
An undated statement on Brown’s campaign website boasts: “More than 340,000 Marylanders got quality, affordable health coverage, substantially improving their quality of life.” As in Hawaii, the boasts are fueled largely by the Medicaid expansion. More recent figures from the state indicate that about 81,000 enrolled in private health insurance and that “net increase in Medicaid enrollment compared to December 2013 is 262,979 people.”
In the most recent Washington Post poll, Anthony Brown holds a nine-point lead over Republican Larry Hogan in the race for governor in heavily Democratic Maryland.
Granted, this is a deep-blue state where Democrats enjoy a 2-to-1 registration advantage. But the poll results are rather maddening for anyone who wants to see something beyond knee-jerk partisan allegiance among the electorate.
For starters, Democratic incumbent O’Malley is in lousy shape: 41 percent approve of his performance as governor, 48 percent disapprove. The survey found 41 percent say the state’s economy is worse than it was eight years ago, and only 27 percent say it’s gotten better. Among those who said it had gotten worse, 48 percent say O’Malley deserves “a lot” of the blame for it getting worse; 40 percent said “some” blame.
And 63 percent of voters say Brown would be similar to O’Malley . . . yet Brown leads solidly. Frustrated with a Democratic governor, Maryland voters are lining up to back the lieutenant governor of the guy they find so disappointing.
There’s little sign that the failed exchange weighs on most voters’ minds. Only 11 percent said “health care” was the most important issue, and perhaps most revealingly, Brown leads Hogan, 50–35, on who would do a better job handling “health care” — even after the exchange failure.
Hogan recently contended that contractors that have done work on the state’s online health-insurance exchange have given large donations to the Democratic Governors Association. Democrats point out that at least one contractor in question gave a slightly larger donation to the Republican Governors Association during the past four years.
MINNESOTA
The federal government provided Minnesota with $155 million for staff, vendors, and implementation of its exchange, MNsure. The state unveiled it on October 1 — and the results were disappointing (and familiar): “Some people were locked out of their applications, while others struggled to find out if they were eligible for financial assistance. MNsure didn’t run well on certain web browsers, and many users were confronted with frozen screens.” The site had not been tested with users before the launch.
By January, Democratic governor Mark Dayton was publicly blaming contractor IBM, accusing it of not delivering “promised functionality.”
As happened in Hawaii, at least one major insurer is pulling out in Minnesota:
The insurance company that grabbed the most customers on Minnesota’s health care exchange by offering the lowest rates told state officials Tuesday that it’s pulling out of MNsure, a major blow to the exchange as the next open enrollment period approaches.
The decision by Golden Valley-based PreferredOne may mean higher rates and again puts the troubled exchange front-and-center in Minnesota’s governor and House elections.
As in Hawaii and Maryland, the vast majority of the system’s enrollments came through the expansion of Medicaid, not through the purchase of private insurance: “327,000 Minnesotans have enrolled through MNsure since it went live Oct. 1, including nearly 55,000 in private plans.”
The issues page of Dayton’s campaign website includes two sentences on “health care reform” and doesn’t mention MNSure.
Since summer, Dayton has enjoyed a 6- to 12-point lead over Republican challenger Jeff Johnson, a state legislator and founder of a firm that specializes in management and employee training.
OREGON
Perhaps no state exchange earned as much mockery as the one in Oregon, assisted in no small part by appallingly cutesy commercials that sang the praises of the state and offered little information about the exchange other than showing the URL of the site:
https://youtube.com/watch?v=Xv2UUcXCo9g
Unlike other state-exchange sites that worked intermittently, Cover Oregon has the embarrassing distinction of failing to enroll a single resident online.
In a brief interview with Portland’s ABC affiliate KATU in early January, Governor John Kitzhaber declared, ”In late October was when I first learned about the problems,” a rather surprising statement considering how the state had failed to work from day one — the first of that month. Even worse, a quality-control firm hired by the state had been issuing warnings about the site’s readiness for two years.
The state did manage to process quite a few residents through old-fashioned pen-and-paper applications, enrolling 102,596 in private insurance and the Medicaid-funded Oregon Health Plan. As The Oregonian’s health-care reporter Nick Budnick observed, “Through this December, the estimated cost of manual enrollment will run more than $50 million, on top of the more than $250 million spent on other Cover Oregon work. And due to a flawed manual enrollment process, thousands were mis-enrolled or suffered errors or lengthy delays causing them stress, hassle and heartache.”
In April, the state concluded that the entire $305 million exchange was not salvageable and suggested the state switch over to the federally run exchange site, Healthcare.gov, for those seeking private insurance. Those being moved to the state’s Medicaid-funded program would be steered through a “stripped down” version of the old exchange.
In a development that will surprise very few people, The Oregonian newspaper recently reported:
A key portion of the work underway on the troubled Cover Oregon health exchange project — that affecting people enrolling for the state’s Medicaid program -– may not be ready as planned when the new federally assisted exchange “goes live” in November.
Here’s how the editorial board of The Oregonian addressed the issue in their gubernatorial endorsement:
The failure of Cover Oregon, the state’s health exchange, was humiliating and costly, and Kitzhaber ultimately is responsible. If that’s the only issue Oregonians care about, then perhaps Kitzhaber ought to go. Thoughtful voters, however, will consider the governor’s full record.
The editors endorsed Kitzhaber.
The lack of discernible voter anger over the exchanges in these states is an ominous indicator not merely for Republicans in these deep-blue states, but for those who hope to see good government. If a state is spending hundreds of millions of dollars for a piece-of-junk website and it doesn’t anger a voter, it’s unlikely much else will.
Perhaps the anger is mitigated by the perception that the money spent was federal money, from Washington — an illogical but comfortable conclusion that some other taxpayer somewhere else is picking up the check.
— Jim Geraghty writes the Campaign Spot on NRO.