America's Bitter Pill

by Steven Brill

  Because he was sixty-three, Brown had been able to receive about $1,100 a month by opting for early Social Security benefits.

  Viola Brown, who was sixty-two, had heart disease and severe diabetes, which she was only occasionally able to get checked up on at a free clinic.

  Neither of the Browns was able to afford any of the medicines—for pain relief, heart disease, or diabetes—that a doctor would have prescribed for them or that the clinic doctors had told Viola Brown to use. “When we had money, we would buy the drugs,” Viola said. “When we didn’t, we would go without.”

  On the day we met she, too, had not seen a doctor of any kind, even one at a clinic, in more than two years.

  The Browns had heard about kynect from television ads Banahan had purchased. “We thought it was too good to be true,” Viola Brown told me. “It seemed like the answer to our prayers.”

  A week before, at the center where they pick up their food stamps, they had been told that they could get help enrolling in kynect at the community center. Which is where they had just found out that it was not too good to be true. The Browns had qualified for Medicaid (called Passport in Kentucky), which meant, they were told, that all of their care would be free and generic versions of any drugs they needed would cost a dollar each.

  “I just did a little dance in there, when they told me we had been enrolled,” Viola told me. She was near tears, but all smiles. “Now we can go to the doctor—and get our medications for a dollar. And you know it’s hard for me to dance,” she added.

  Why was that?

  “I only have eight toes left because of the diabetes.”

  Four of the five families I spoke with at the Shelbyville enrollment center that day had been put into the Medicaid program that Beshear had expanded, a plurality that would ultimately mirror all Kentucky Obamacare enrollments. (Eighty percent would qualify for Medicaid.)

  The fifth family lived about 100 percent above the poverty line of $24,000 for a family of four. They had bought a silver plan with a premium of $1,039 a month. A $541 subsidy brought the cost down to $498. However, with a deductible of $4,900, the total cost of the insurance and the deductible still meant that the family might pay about $11,000 a year (in premiums plus deductible outlays) before their insurance kicked in if they suffered illnesses requiring extensive medical bills.

  That potentially high demand on available income was one of the weaknesses of Obamacare—a result of the compromises made in Washington during 2009 and 2010 to balance the cost to the government with coverage that would be affordable to families like this one. Yet it was still quite an improvement. The family, which included someone with severe preexisting conditions, had been paying more than $1,500 a month, which had forced them to go deeply in debt. And that plan had had a $6,000 deductible.

  Shelbyville is in Shelby County, which had voted 67–33 percent for Mitt Romney over Barack Obama. The Browns are white as is 90 percent of Shelby County. Of the four people among those who were enrolling that afternoon who said they had voted and were willing to share their choice with me, all four had voted for Romney. Yet Beshear’s message—or perhaps simply the lure of “answered prayers” that Viola Brown had expressed—seemed to have gotten through. What they were doing at those card tables with the kynectors was not about Barack Obama. In fact, none mentioned Obamacare, except for the one enrollee who said that kynect was “a lot better than Obamacare.”

  “KENTUCKIANS NOT BUYING OBAMACARE”

  Nonetheless, for Kentucky’s two leading Republicans, kynect was all about Obamacare and Obama. Perhaps oblivious to what their constituents on the ground were experiencing, Senators Mitch McConnell and Rand Paul went on the attack with an op-ed column in the Louisville Courier-Journal the morning the Browns enrolled.

  Their piece, entitled “Kentuckians Not Buying Obamacare,” said the new law would lead to layoffs, higher taxes, and people losing their current health plans.

  “The governor likes to tout his so-called discounts for health insurance.… What he won’t tell you is that most Kentuckians won’t receive them,” they wrote. “As so often happens when our friends on the left set out to fix a problem, their ideas, however well-intentioned, end up hurting the very people they sought to help. That’s just what we’re seeing with Obamacare.”

  BOMBING IN OHIO

  Sean and Stephanie Recchi, who are Republicans, agreed that Obamacare didn’t offer them much help.

  Sean Recchi is the small businessman from Ohio who had been diagnosed with cancer in 2012. He and his wife then found out that their insurance policy covered only $2,000 a day in the hospital. The hospital of their choice—Houston’s MD Anderson Cancer Center—had refused even to give Sean a treatment plan and an initial dose of a drug that could block the spread of his cancer until it received $83,900 in advance.

  “I don’t think Obamacare will help us; I don’t want anything to do with it,” Stephanie Recchi told me when I checked in with her on October 3, 2013, to ask if she had tried to get some much-needed insurance on the new website, which in Ohio was part of the federal exchange.

  Yet the key provisions of Obamacare seemed as if they were drafted by someone sitting next to Sean Recchi in that MD Anderson holding room that day in 2012 when he had had to wait for his check to clear before a doctor would see him. The Recchis were a family facing the ultimate preexisting condition—cancer. Although by October 2013, Sean was in remission, he was regularly seeing doctors in Ohio and taking drugs costing hundreds of dollars a month, for which he now had no insurance.

  Stephanie, Sean, and their two children were also a perfect match for the demographic that Obamacare was designed to serve: a working-class family of four earning, they estimated, $40,000 a year and unable to get insurance from an employer because the Recchis had just started their own two-person business. They would now be able to get significant subsidies to buy coverage on the exchange.

  Nonetheless, on October 3, Stephanie Recchi, like Mitch McConnell and Rand Paul’s imagined Kentuckians, wasn’t buying Obamacare.

  “I hear a lot of bad things about it—that it doesn’t cover preexisting conditions, and it’s too expensive,” Stephanie Recchi told me the morning two days after the launch.

  Where had she heard that? “Television ads and some politicians talking on the news—just a lot of talk that this is a bad law.”

  Journalists should cover stories, not steer them. Nonetheless, hearing myself sound like Governor Beshear, I urged her to try to find out more about it because it seemed geared to people in her situation. So, on October 4, Stephanie Recchi began pounding away at her laptop to have a look at what was offered on the Ohio version of the federal exchange. But every time she tried she was either put into the “waiting room” or sent to a page that froze up and crashed.

  WHITE HOUSE PANIC

  On Saturday, October 5, 2013, a USA Today story quoted U.S. chief technology officer Todd Park saying that they had expected 50,000 to 60,000 users, but had been overwhelmed by 250,000 concurrent users. Actually, as the internal emails leading up to the launch noted, they were prepared for only 10,000 users at launch and hadn’t even met that target.

  The same day, President Obama, in an interview with the Associated Press, urged Americans to be patient. Fixes to the website were on the way, he promised.

  But in the White House that weekend, everyone was losing patience, including the president. The communications team was especially distraught. They had been sending press secretary Jay Carney out every day to talk about what a good problem this was—how the interest was so overwhelming that all they needed to do was make some fixes to catch up with demand.

  “By the first weekend,” one senior Obama adviser would later tell me, “we were sitting there saying, ‘For the fourth day in a row we’ve been saying it’s volume and it’ll get better in a day or two. That’s not going to work next week.’ ”

  It certainly wasn’t going to work if and when the government shutdown drama ended and the
crashed website became the country’s top story. Indeed, the great irony was that the Republicans had shut down the government to attack Obamacare, but the government shutdown was now shielding Obamacare from the wall-to-wall negative coverage it otherwise would have gotten during its first days.

  The meeting that Saturday, October 5, like those during the three days before, was enormously frustrating to Obama and chief of staff McDonough. No one on the launch team—Lambrew from the White House, Tavenner from CMS, and Sebelius from HHS—seemed to know anything. Their aides were equally without answers.

  Often, someone would take out a laptop to see if the website was even up at all, or to check the latest Twitter chatter. There were no numbers, just vague estimates of when fixes would be made based on an ever-changing, just-as-vague list of the fixes. It was the domestic crisis equivalent of using the Internet and Twitter to see how the raid on Osama bin Laden’s hideout was going.

  The Saturday meeting ended like the others. The president urged everyone to keep at it, keep McDonough posted, and report back tomorrow with what they all hoped would be better news. Meantime, Obama and his team had a government shutdown and debt ceiling to contend with.

  Monday, October 7, began with White House Obamacare communications guru David Simas initiating a series of tweets alternating between attacking Republicans for the shutdown and retweeting good news stories about someone having successfully enrolled in Obamacare.

  That same morning Bryan Sivak replied to an email from an executive at Amazon’s Web services division. It had been sent to him because the Amazon executive assumed that someone with the title of chief technology officer of the Department of Health and Human Services must be the guy in charge of the website. Amazon wanted to know if there was anything it could do to help. “I wish there was,” Sivak replied. “Actually, I wish there was something I could do to help.”

  But by that afternoon, Obama and McDonough had decided that they did, indeed, need help.

  First, they told Todd Park—who had been trying to work on HealthCare.gov since he had been at HHS—that he was finally going to be put in the game. The president and his chief of staff wanted Park involved in HealthCare.gov as his highest and only priority. “I went from White House chief technology officer to full-time HealthCare.gov fixer,” is how Park breezily described his new portfolio to me months later, with no hint of what a told-you-so moment this was.

  Second, McDonough reached out to Jeffrey Zients, a highly regarded manager who had won high marks as a deputy director of the Office of Management and Budget. Among other projects, Zients—who in looks and résumé was the epitome of the buttoned-up business executive—had overseen the successful Cash for Clunkers economic stimulus program in 2009 that encouraged people to turn in their old cars and buy new ones. He was slated to become director of the president’s National Economic Council in January 2014.

  Zients, who is not an engineer, would be teamed with Park, the chief technology officer.

  Their first job, Zients later told me, was “finding fresh eyes who could decide whether the thing was salvageable.” In other words, as with the decades-old debate over the American healthcare system itself, the question on the table was whether HealthCare.gov could be fixed or whether they would have to scrap the whole thing and start over.

  Jon Stewart’s Daily Show the next evening with guest Kathleen Sebelius seemed to point to the more dire answer.

  Stewart, who was sympathetic to the healthcare reform cause and whose viewers are overwhelmingly the “young invincibles” Sebelius needed to sign up, was merciless, and Sebelius came off as someone for whom mercy was the only hope. The prior week Stewart had been attacking Republicans for the shutdown. Now, he took the chance to attack the other side. He whipped out a laptop, turned to Sebelius, and said, “I’m gonna try and download every movie ever made and you’re gonna try and sign up for Obamacare, and we’ll see which happens first.” The audience roared. Sebelius laughed, weakly.

  How many people have signed up? Stewart asked. “I can’t tell you because I don’t know,” Sebelius replied. The audience laughed a bit more. Stewart frowned. “The Democrats are as good as the Republicans at doing a shutdown,” Stewart said.

  “It was like watching one of those fights where the ref takes too long to step in and the guy gets carried out on a stretcher,” recalled one member of the White House political team.

  OBAMA REFUSES TO NEGOTIATE

  The shutdown fight continued. Obama, sensing the Republicans were in political quicksand, refused to negotiate until the Republicans in the House voted to approve a budget and extend the debt ceiling. The Republicans, meanwhile, were beginning to look for a face-saving way out by getting something, anything, in the way of an Obamacare compromise.

  One idea that the press speculated might work was repeal of the 2.3 percent Obamacare tax on medical devices. It was something that might attract some Democratic votes in the Senate because some Democrats, such as Al Franken of Minnesota, had already been pushing for repeal. The idea drove many of the reformers crazy, because the device makers’ profit margins were so high and, in fact, their business had improved dramatically since the Obamacare tax had gone into effect. For example, Medtronic, which was based in Franken’s home state, showed no sign of the carnage predicted by the industry’s lobbyists and congressional sympathizers. Net earnings for the company’s fiscal quarter ending on October 25, 2013, would be up 40 percent over the prior year.

  Obama refused to negotiate on that or anything else.

  LOOKING FOR “ACTIONABLE INTEL”

  Through the second week of the launch, things only got worse. A CCIIO war room meeting on October 8, 2013, reported that “every single individual who needs to go to DHS [the Department of Homeland Security for a citizenship or legal alien status check] is essentially failing.”

  The October 10 meeting reported that “75% of traffic to the VA [the Department of Veterans Affairs, to check to make sure an applicant didn’t already have veterans’ healthcare benefits] is matching to deceased individuals.”

  On October 15, the group was told that these “Tiger Team” war room meetings were being canceled altogether.

  By October 17, Denis McDonough had had enough of White House meetings where nobody knew anything. McDonough, whose background had been in national security before becoming Obama’s chief of staff, decided he needed to go to the field and get what he later told me would be his own “actionable intel.” He had a driver take him to CMS headquarters in Baltimore, where he could question the troops himself.

  McDonough came back from Baltimore rattled by what he had learned about how and why the website was failing in front of a national audience of stunned supporters, delirious Republican opponents, and ravenous reporters.

  What he was able to pry out from the beleaguered crew in Baltimore was that even on October 17—by which time traffic to the site had collapsed because its failure was now the subject of daily headlines across the country—only three in ten people coming to HealthCare.gov were able to get on at all. And, of the lucky third that did, most were likely to be tossed off because there were so many other bugs.

  McDonough returned and briefed the president and Jeffrey Zients, who had by now come to the White House to work with Todd Park. None of them knew if there was any alternative but to scrap the site and start over. The president wanted their take on that within days.

  As McDonough and Zients were digesting what the chief of staff had learned in Baltimore, presidential press secretary Jay Carney was going through what White House messaging adviser David Simas would later tell me was “probably the most painful press briefing we’ve ever seen.… It was like one of those scenes out of The West Wing, where everyone’s yelling at him.”

  Thursday, October 17, was the day the government shutdown finally ended. Now, the Obamacare disaster was center stage.

  Carney gamely tried to fend off the vultures. He had little to work with. Pressed repeatedly on when the site wou
ld be fixed, the best he could say was that “they are making improvements every day.”

  As the president and his chief of staff now knew, “they” were, in fact, not making improvements, except by chance, much as you or I might reboot or otherwise play with a laptop to see if some shot in the dark could somehow fix a snafu.

  BAD NEWS AT OSCAR

  Also on October 17, 2013, Oscar’s Joshua Kushner, Mario Schlosser, and Kevin Nazemi finally got some real numbers, when the first batch of Oscar enrollment files arrived from the state.

  Until now, the vibes from Web traffic and social media had seemed good, but they had no idea how many paying customers they had attracted.

  The news was terrible. New York State reported that there had been 107 transactions for enrollments in their insurance policies. And those were not necessarily all enrollments. If someone had enrolled and canceled, as Schlosser had done a few times to test the system, that would have been two transactions but no net enrollments.

  One hundred and seven (or fewer) customers for the first half month was lousy. Still, they remained optimistic. “We always believed that we have the right combination of naïveté about how the industry had always worked and the confidence and ability to try to do something different and better,” Kushner told me.

  CHAPTER 22

  THE RESCUE

  October 18–December 24, 2013

  EARLY ON THE MORNING OF FRIDAY, OCTOBER 18, 2013, GABRIEL Burt, whose résumé actually includes work as a rocket scientist, woke up in a room at a Doubletree Inn in Columbia, Maryland, about twenty-five miles outside of Washington. Burt, thirty at the time, had flown there from Chicago the night before, toting an overnight bag for what he thought might be a two- or three-day trip. By the following weekend his wife would be flying in to resupply him. He wouldn’t get home until December 6.