HealthCare.gov marks a year, with plenty left to do

Exactly one year after the disastrous launch of HealthCare.gov, that tech debacle is a distant memory for many—but the federal Obamacare insurance marketplace is faced with a new set of challenges as the next open-enrollment period is set to start in mid-November.

Obamacare advocates say those challenges don't present the kind of dire threat that HealthCare.gov's massive flop did when it launched Oct. 1, 2013. But if they aren't met successfully, it could remind people of the exchange's bad old days last fall.

Source: Healthcare.gov

Those issues include what will be first-ever automatic re-enrollment of millions of existing Obamacare customers, the need to build a system that will generate accurate tax forms related to federal subsidies that most enrollees receive, as well as ongoing court challenges that actually threaten to cripple the basis of Obamacare.

Read MoreMore insurers to join Obamacare in 2015

There also will be technological tweaks that change how people navigate HealthCare.gov's online screens, and the addition of two states, Oregon and Nevada, to the federal exchange platform after they each had serious problems running their own markets.

Last month, government auditors cited what they consider to be continued security risks in the infrastructure of HealthCare.gov that leaves it vulnerable to breaches involving customers' personal information. HealthCare.gov's operators say they have addressed many of those concerns.

Shorter enrollment season

And, finally, open-enrollment season this time will last just three months, instead of what ended up being a 6½-month window for 2014 enrollment.

"This coming year will be one of continued improvement, but not perfection," Andy Slavitt, a top official at HealthCare.gov's operator, the Centers for Medicare and Medicaid Services, told Congress last month. "We still have a lot to learn that will help us continue to improve the marketplace."

Read MoreWhen gov't hackers tried to crack HealthCare.gov...

The Republican-led House Energy and Commerce Committee on Wednesday said in a prepared statement: "One year ago today Americans went to HealthCare.gov and found an incomplete and impossible to navigate website that failed to deliver what the administration had promised. Then-Health and Human Services Secretary Kathleen Sebelius described this launch as a 'debacle' and a year later, the more than $2 billion system remains incomplete and insecure.

"It's becoming increasingly clear that the challenges for the second open-enrollment period are much more complicated and could leave Americans with even more costs, canceled plans and uncertainty," the committee said.

People stand in the line to register to meet with Sunshine Life & Health Advisors, which is selling insurance under the Affordable Care Act at a store setup in the Mall of the Americas on March 31, 2014, in Miami.
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People stand in the line to register to meet with Sunshine Life & Health Advisors, which is selling insurance under the Affordable Care Act at a store setup in the Mall of the Americas on March 31, 2014, in Miami.

Timothy Jost, a Washington and Lee University health law professor and prominent Affordable Care Act supporter, doesn't agree with Republican critics of Obamacare on most things. But when asked about the challenges for HealthCare.gov this fall, Jost said, "There's a lot of moving parts that are going to have to move over the next couple of months."

Read MoreObamacare enrollment slides to 7.3 million: Official

Things certainly didn't come together on Oct. 1, 2013, when HealthCare.gov first opened for business. Few, if any, people were able to get onto the website, much less actually create an account and shop and buy health insurance plans.

While President Barack Obama and then-HHS Chief Sebelius initially blamed the site's crash on a surge of eager insurance shoppers, it soon became apparent that site's serious technical flaws were to blame for the massive traffic jam that persisted for weeks. Sebelius endured a cringe-inducing interview with "Daily Show" host Jon Stewart, who gleefully poked fun at her exchange's tech wreck.

HealthCare.gov, which at the time served 36 states, wasn't the only exchange with such problems: state-run insurance markets in Maryland, Hawaii, Oregon, Massachusetts and Minnesota flopped as badly, or worse.

"It was pretty horrible. It was stomachache horrible," said Karen Pollitz, senior fellow of the Kaiser Family Foundation, a health policy research group.

Pollitz noted that HealthCare.gov's crash came as millions of people who had been effectively priced out or locked out of the individual insurance market for years because of pre-existing health conditions or low incomes rushed to buy plans. The ACA not only barred insurance companies from discriminating against people with such conditions, it also provided often-generous federally funded subsidies to help low- and middle-income earners pay their premiums.

"It was frustrating," Pollitz said of the failure of HealthCare.gov to effectively serve those would-be enrollees as envisioned for two months, as the site's error and "busy" messages became running visual jokes on Twitter.

There were worries, Jost said, "that the whole thing would collapse."

There also was serious speculation that because of the extreme difficulty signing up for ACA plans, they would be overwhelmed by less-healthy enrollees, whose use of health services would drain money from the plans, and in turn lead to much-higher premiums for those plans in future years, a so-called death spiral.

As the political fallout grew, Obama placed management expert Jeff Zients in charge of the repair effort, which moved to get the site functioning properly for the "vast majority of users" by the end of November.

Zients' whip cracking paid off, and the site started enrolling meaningful numbers of people in December, and then enrollment exploded in March and April, as the deadline for signing up for health coverage and avoiding a tax penalty approached.

By the close of enrollment in mid-April, more than 8 million people had selected an insurance plan on the government-run exchanges—a million more than original, precrash projections—with the bulk of those sign-ups coming on HealthCare.gov.

As the close of enrollment season approached, Sebelius, who had been the target of harsh criticism during the fall because of the exchange's performance, announced her resignation and was replaced by Sylvia Burwell. HealthCare.gov also received its own dedicated CEO, Kevin Counihan, who ran Connecticut's lauded Obamacare exchange.

President Barack Obama delivers remarks about the launch of the Affordable Care Act's health insurance marketplaces on October 1, 2013.  At right is Kathleen Sebelius.
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President Barack Obama delivers remarks about the launch of the Affordable Care Act's health insurance marketplaces on October 1, 2013. At right is Kathleen Sebelius.

Since then, some people have failed to pay their premiums and been dropped from enrollment, while others have replaced them during the ongoing special enrollment period for people with events such as marriages, job losses or births of children. As of last month, federal officials said current paid enrollment stands at 7.3 million people.

"Which I think is remarkable," said Jost, noting the contrast from the first months of the Obamacare exchanges.

He and other advocates also point to the relatively modest growth, on average, in the premium prices of plans due to be sold on those exchanges for 2015. And next year also will see a net increase in the number of insurers selling plans, a sign of growing confidence among issuers.

Still, there were costs from the botched launch.

Read MoreOklahoma judge rules against Obamacare tax subsidies

Anne Filipic, president of the leading Obamacare advocacy group Enroll America, said a post-enrollment survey found that people who did not sign up for coverage often suffered from an "information gap," which left them with "no idea that financial assistance was available to them" through the exchanges in the form of subsidies for low- and moderate-income earners. Such subsidies can eliminate much of the monthly premium costs for enrollees.

"What we lost" in the first flawed months of HealthCare.gov "was the opportunity to spend those first couple of months getting out the message about that financial assistance," Filipic said. "It didn't give people the opportunity to hear that. There's a real opportunity cost there."

"Millions of people remain uninsured," Filipic said.

But enrolling those people presents a potentially tougher challenge this year, experts said, because of language barriers and the fact that the currently uninsured tend to have little or no experience with health insurance and its often-arcane terminology.

Biggest threat yet?

But that doesn't represent an existential threat to Obamacare. What does is a series of related challenges in four federal court districts, all of which claim that subsidies granted Obamacare enrollees on HealthCare.gov are illegal. Those challenges cite the fact that the ACA, as written, did not explicitly authorize such tax credits for customers of a federally run exchange, while it does do so for customers of state-run exchanges.

If HealthCare.gov subsidies ended up being ruled illegal, the effect would be immense. Billions of dollars in aid to Obamacare enrollees in what are at least 36 states would be withdrawn, and, for technical reasons, it would effectively gut the ACA mandates that individuals obtain health coverage or pay a fine, and that many businesses starting in 2015 offer affordable health insurance to workers or pay a fine.

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An Oklahoma federal judge on Tuesday ruled the subsidies were illegal. His ruling, which is stayed for the moment, came as the Supreme Court is due to say this month whether it will hear appeals of a similar case out of Virginia, where Obamacare opponents had lost that argument.

Jost said that if the high court takes that case, and finds that the subsidies are illegal, "then all bets are off."

The re-enrollment challenge

A more immediate challenge is how well the automatic re-enrollment will process will work. While it is being touted as an easy, efficient way to keep millions of people insured, there are concerns that it won't work smoothly, and that it will leave some in plans that they would have been better off dropping and replacing.

Another big question is when HealthCare.gov's much-delayed "back end" will be completed. That part of HealthCare.gov's development was shelved amid the frantic efforts to fix the enrollment side of the site, but it is needed to handle important calculations related to tax credits, as well as for programs designed to smooth out the risk insurers face selling plans on the exchanges.

Pollitz, of the Kaiser Family Foundation, said "there's still plenty of functionality to be developed" on the site's enrollment side, including functions that would make it easier for people to comparison shop for plans.

Still there is an expectation that the upcoming enrollment season will work more smoothly.

"I don't think anyone expects there will be a crash this time" Pollitz said.