by Steven Brill
No one else mentioned the cancellation issue during this hearing. Its turn in the headlines would come a week later.
PROGRESS … THEN A CRASH
The next day, October 25, 2013, the White House press office announced that its new “tech surge” team had a rebuild plan that would see the website functioning well enough so that the “vast majority” of visitors would be able to enroll with no glitches by December 1.
By now, Mikey Dickerson’s stand-up culture—identify the problem, solve the problem, or try again—was taking hold. The team began working stretches of two, three, or four days, during which each of them might have had five or ten hours of sleep cumulatively. They often changed clothes only when they had time for a shopping trip to the nearby mall.
They and the dozens of willing, even eager, engineers they were leading, who worked for the contractors who had failed so badly when they were leaderless in the run-up to October 1, pounded away on the bugs that Dickerson had demanded they identify every morning, focus on, and clear up in time for the evening stand-up. They began to sweep across increasingly big swathes of a punch list that detailed fixes needed across almost every feature and link on the e-commerce site, ranging from the major bugs (such as people not being able to save the information they entered in order to complete the process in a later visit) to relatively easy repairs (such as links that didn’t take visitors to the right page).
Well, actually they hummed along happily until the whole site crashed at 1:20 A.M. on Sunday, October 27, two days after Zients had announced that all would be well by December 1. A switch had failed during maintenance work at a data center. The outage lasted thirty-seven hours, during which Dickerson and his team could do little because they had no website to look at.
Two days later, at 4 P.M. on October 29, it went down again. This outage lasted forty hours, including the afternoon of October 30, when Health and Human Services secretary Kathleen Sebelius testified about the website’s troubles before another House of Representatives subcommittee. The indignant Republican members flashed images on their tablets and iPhones of the website being down as they questioned her.
“In her testimony, Ms. Sebelius came across as a hapless official,” The New York Times reported.
“Those outages were totally demoralizing,” recalled Gabriel Burt, the Obama campaign alumnus and CTO of Civis. “We thought we were on our way. We had gotten some momentum, but lost it.”
“We just kept saying, ‘Let’s pick ourselves up and fight,’ ” recalled Todd Park, who was now pretty much living at the Maryland control center. “And when the site came back we pushed ahead nonstop.… We went from doing three or four releases”—upgrades or changes to the website—“in October to twenty-five in November.”
“The team,” Zients recalled, “ran two-minute drills to perfection. We had the best players on the field. Some plays didn’t work. We talked about those. But there was never any finger-pointing. People just hustled right back to the line, and we ran the next play.”
“THE PRESIDENT WAS TRULY FURIOUS”
While the site was down on October 29, 2013, NBC News delivered another blow—a lead story on its evening newscast and on its website headlined “Obama Administration Knew Millions Could Not Keep Their Health Insurance.” Senior investigative correspondent Lisa Myers reported:
President Obama repeatedly assured Americans that after the Affordable Care Act became law, people who liked their health insurance would be able to keep it. But millions of Americans are getting or are about to get cancellation letters for their health insurance under Obamacare, say experts, and the Obama administration has known that for at least three years.
Four sources deeply involved in the Affordable Care Act tell NBC News that 50 to 75 percent of the 14 million consumers who buy their insurance individually can expect to receive a “cancellation” letter or the equivalent over the next year because their existing policies don’t meet the standards mandated by the new health care law. One expert predicts that number could reach as high as 80 percent. And all say that many of those forced to buy pricier new policies will experience “sticker shock.”
Then NBC delivered this knockout punch:
None of this should come as a shock to the Obama administration. The law states that policies in effect as of March 23, 2010, will be “grandfathered,” meaning consumers can keep those policies even though they don’t meet requirements of the new health care law. But the Department of Health and Human Services then wrote regulations that narrowed that provision, by saying that if any part of a policy was significantly changed since that date—the deductible, co-pay, or benefits, for example—the policy would not be grandfathered.
The story of the cancellations was exploding everywhere by the time the NBC report aired. Obama had broken his “keep your insurance” pledge. Now, according to the NBC report, it appeared he had known all along he was breaking his promise. The information had been published by his own people in the Federal Register years before.
The president was blindsided. He had never been briefed on the grandfathering issue. True, insurance industry lobbyist Ignagni and some insurance executives had mentioned the problem to Valerie Jarrett. But healthcare reform policy chief Lambrew had assured Jarrett that it was not a real issue—that the insurance people always complained about consumer-friendly regulations.
Obama had not known that Larry Summers’s and Peter Orszag’s staffs had been rebuffed as early as 2009 by the communications team, when they warned that the president should qualify his “keep your insurance promise” with language about how some plans would have to be canceled because they weren’t good enough. It complicated the message, they were told.
When McDonough and the current communications team first asked Lambrew about the cancellations a day or two before the NBC report, she had told them it was not a big deal, that people would understand. When they pressed her for numbers, she said, accurately, that no one really knew how many individual plans were out there in the market, let alone how many would have expired anyway and not be subject to any kind of grandfathering. That was true, but in the political firestorm that ensued any canceled or expired policy would now become a policy that Obamacare had canceled.
It was only when McDonough and the communications team pressed her and Sebelius that they found out that their administration had published the estimates of millions of cancellations in the Federal Register more than three years before.
“Remember, those regulations were written when the Obama people were riding high,” one insurance executive later explained. “They had all been having fun bashing the insurance companies, especially Lambrew. She thought those regs were a compromise. If it was up to her, she’d have killed all those plans in 2010, not 2014.”
“The health reform people—Jeanne [Lambrew], and the others who worked for her, had tin ears,” a senior White House communications adviser later told me. “Maybe they were just so used to all the fights over reform in the industry that they weren’t sensitive to the larger political arena where this was going to be played out. Whatever the reason,” this adviser added, “it was unforgivably bad, horribly stupid, that we walked into this right after the website failure. The president was truly furious. ‘This was a problem we brought on ourselves,’ he told us. ‘We should have known this was coming.’ ”
Yet he was still no-drama Obama. There was no yelling. Just a calm series of questions to Lambrew and the rest of the staff. How did this happen? How many people were really affected? How do we know that? What can we do about it?
“It was worse than yelling,” recalled one shell-shocked staffer who attended one of the first meetings with the president following the explosion of the cancellation grenade. “It was a calm, piece-by-piece dissection of everything, peeling it back, layer by layer.”
“I ALWAYS THOUGHT SOMETHING MIGHT BRING ME DOWN”
The first victim thrown into the ring to fight off the new firestorm was Marilyn Tavenner, the head
of CMS, who testified on October 29, 2013, before another House committee. She now had to explain a catch-22: People were getting their current policies canceled. However, they couldn’t buy new ones that, even with the subsidies, might cost more—because they were much higher quality insurance policies—because the website didn’t work. Yet they were facing a penalty under the individual mandate if they didn’t have insurance by January 1.
“What’s become abundantly clear,” said Kevin Brady, a Republican from Texas, “is that the flaw is not the website; the flaw is the law itself. This is what happens when you inject 159 new federal agencies, bureaucracies, and commissions between you and your health care.
“Why should the American people believe you now?” he asked Tavenner. “You’ve had nearly four years to get it ready. Now you’re saying in four weeks more, it’ll be great. So what’s different? Why should anyone believe these claims?
“My constituents are frightened,” Brady concluded. “They are being forced out of health care plans they like. The clock is ticking. The federal website is broken. Their health care isn’t a glitch.”
The best Tavenner could do was apologize “that the website is not working as well as it should,” and repeat the vague promise that it would work for the “vast majority” of visitors by December 1. She refused to give enrollment numbers, saying the totals for October would not be available until mid-November.
Tavenner is a sharp, self-assured, and commanding presence in most rooms. Here, she looked wilted, in shock. She seemed to sink deeper into the chair the more the inquisition dragged on. “I had had an ideal career,” she later told me, referring to a résumé that had begun with a college degree in nursing and had culminated in the government’s top healthcare operating job. “But I always thought something might bring me down. I guess this was it.”
Nonetheless, when she got back to the office, Tavenner “was as solid as a rock,” recalled one of her deputies. “She kept telling us we can’t worry about blame. We can’t look back. We just have to let the new tech team help us fix this.” That meant that she had had to push aside Henry Chao and Michelle Snyder. Tavenner especially felt bad about Snyder. The career civil servant had wanted to retire the year before, but Tavenner had persuaded her to stay to work on the launch.
The night of Tavenner’s hapless turn in the congressional barrel, the Republican National Committee began airing a series of hilarious Web videos, entitled “I’m Obamacare.” They depicted a disheveled obese person, “Mr. Obamacare,” commiserating with a fit, good-looking young man, “Mr. Private Sector,” about how baffled he was handling challenges like technology or customer service.
It added up to a stunning reversal of political fortunes, all having to do with the nuts and bolts of governing competently. On October 17, the day the government shutdown had ended, the Republicans were thought to be grievously wounded for having closed the government over Obamacare. Now, in just twelve days, the Obama administration had managed to overturn the political landscape. The Republicans were riding high because of Obamacare.
Anne Filipic, the former Obama campaign field organizer now running Enroll America, knew that. By the end of October, her troops had gathered more than forty-three thousand commit cards from the uninsured, mostly the cherished young invincibles, who wanted more information or even help signing up. But she couldn’t sign them up. In the precincts she had targeted in Houston her people had generated a ton of interest, but had only been able to get about fifty people enrolled.
Meantime, Filipic’s opposite numbers at Generation Opportunity—the group organized and funded by the Koch brothers and other opponents of Obamacare to discourage the young from enrolling—applied their brand of humor to the opportunity Filipic’s former White House colleagues had handed them. They gave contractor CGI their “Youth Defender Award” for “doing more than anyone to date to save young people from the increased costs and privacy invasions of Obamacare.” Secretary Sebelius was named runner-up.
THE DRUG COMPANIES WIN ANOTHER ONE
On November 3, 2013, CMS’s Tavenner handed a victory to the pharmaceutical companies. She issued a regulation allowing them to pay a patient’s out-of-pocket expenses for brand-name prescription drugs.
This allowed the drugmakers to proceed with a clever, seemingly pro-consumer strategy to undercut the aggressive deals the insurance companies on the exchanges were offering to patients who opted for less expensive generics.
The insurers were willing to cut or even eliminate their customers’ co-insurance obligations if they chose generics. For example, a brand-name prescription might cost $100, and the generic might cost $20. The insurance company might say that the co-insurance for the brand-name version was 30 percent, but that the co-insurance for the generic was only 10 percent. That would make the patient’s out-of-pocket cost $30 for the brand name (30 percent of $100) but only $2.00 (10 percent of $20) for the generic. In fact, Oscar’s deal was that the generic would be completely free for the patient.
To trump that, the drug companies wanted to pay patients for all of their out-of-pocket costs for brand-name drugs.
Tavenner’s ruling meant that patients would not worry about the cost difference between generics and brand names and, in fact, pay less for the brand names—because the drug company would pay that entire $30 out-of-pocket cost to the patient for its branded drug. This gift to the patients was well worth it to the drug company, because its cost to produce the brand-name drug, for which it would now still get $70 from the insurance company, might have been a dollar or even less.
The insurers had argued that because the exchanges received government funds to pay for the premium subsidies, a rule in effect that did not allow drug companies to offer the same deal to Medicare patients (because they, too, had their bills paid with government funds) should apply. Tavenner turned them down. With all the political fights raging over Obamacare, why tell patients they could not get their favorite drugs for free, courtesy of the drug companies?
“AS MUCH AS WE CAN, AS FAST AS WE CAN”
Google’s Mikey Dickerson was so adamant about the need to forgo finger-pointing and move on to the next play that during one standup in mid-November he demanded a round of applause for an engineer who had called out from the back of the room that a brief outage had probably been the result of a mistake he had made.
The team’s progress was steady, but their punch list was enormous. Jeffrey Zients, though not a techie himself, had assembled a terrific team that had gelled perfectly. However, his engineers could move only so fast. Zients had carte blanche to add resources, but putting ten people on a fix that would take one coder ten days didn’t turn it into a one-day project. Coding didn’t work that way.
“Jeff was a great leader, but there were limits,” Dickerson told me. “He would ask us every day if we were going to make the deadline.… He’d say he had to report on how we were doing to the president. And I’d say till I was blue in the face, ‘We’re doing as much as we can, as fast as we can, and we’re going to do that no matter what the deadline is.’ ”
THE QUEEN OF ERRORS REIGNS
As Dickerson marched his troops through the punch list in November, he added to the team, mostly with recruits he had worked with at Google. Jini Kim, a thirty-three-year-old who looked ten years younger, had been a Google superstar before leaving to start her own healthcare data analytics service. She put that aside, arriving on November 21, 2013, to become the team’s “queen of errors.”
Kim’s job was to work with a group at a separate office near Dulles International Airport in Virginia devoted to dealing with longer term issues the site would face following the November 30 deadline. That meant she regularly had to drive the forty-plus miles between the Virginia office and the Maryland command center. One afternoon, it provided the native Californian with a terrifying experience maneuvering through her first blizzard.
The most important longer term issue Kim worked on was scale: Would HealthCare.gov be able to
handle the traffic that a revived and working site would generate?
One of the hurdles to increasing capacity was the error rate—the rate at which any clicks on the site generated a result that it was not supposed to, such as a time-out or the popping up of the wrong page. In October the error rate had been an astoundingly high 6 percent. That meant that even the lucky few who got onto the site invariably had something go wrong, because at 6 percent, just fifteen or sixteen clicks on the site would, on average, produce a problem.
THANKSGIVING 2013 FELL ON November 28, and what for most of the country was a long holiday weekend became three days of two-minute drills for Mikey Dickerson and his crew, all aimed at keeping the president’s promise of a website working for the “vast majority” of visitors by Sunday, December 1. Dozens of items remained on the punch list. For example, people still couldn’t go back a page on the website.
The fixes began being pumped out even faster. At the same time, the engineers executed a major upgrade in the hardware powering the system, giving it more capacity and reliability. “You normally don’t do hardware and software changes at the same time,” Zients told me. “Because if something breaks you don’t know what the cause is. But we … had to take chances.”
“CAN OBAMACARE SURVIVE?”
The rest of the world remained skeptical. The brutal congressional hearings continued. Even the Democratic-controlled Senate felt compelled to get into the act, although its hearings were milder, despite Max Baucus’s growing anger over how his law had stumbled so badly out of the gate and how much he and his staff had been kept in the dark about all of the problems.