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4 Ways to Fix Obamacare

Rick Newman
Daily Ticker
4 Ways to Fix Obamacare

As clumsy as the launch of the Affordable Care Act has been, the law is here to stay. But its numerous provisions aren’t written in stone and President Obama himself has said he’s willing to change the law in the future in order to make it better.

It goes without saying that the rickety website at the heart of the ACA, Healthcare.gov, must be overhauled, and the White House has vowed to fix all major bugs by Nov. 30. Beyond that, there are several other changes that might make the program more appealing to consumers, without requiring Congress to pass any new laws. Here are four fixes the Obama administration could make on its own:

#1: Customize the enrollment experience.

Healthcare.gov is basically a one-size-fits-all website that treats all applicants the same. In the private sector, no savvy company would approach consumers that way.

“Consumers are almost being treated like large-scale guinea pigs here,” says Ron Ashkenas, an organizational transformation expert at Schaffer Consulting in Stamford, Conn. “Some very smart people in Washington have basically said, ‘here’s how it’s going to be done.’ Then they did it to everybody all at once, until they figured out it doesn’t work.”

Related: Obamacare's Unintended Losers

Instead, Ashkenas recommends a slew of experiments and “beta tests” meant to try different targeted approaches and see what works best, which is how private-sector firms such as Google (GOOG) or Amazon (AMZN) often try out new ideas. Test programs could be confined to narrow demographic groups or localities and be designed to identify the best ways to maximize enrollment among certain age, income or socioeconomic cohorts. It’s also usually best to label pilot programs for what they are, which tends to make consumers more tolerant of flubs. Soliciting feedback from users is important too -- sometimes it even yields breakthrough insights that don’t occur to people at HQ.

#2: Make Obamacare cooler.

The success of the Affordable Care Act depends on getting healthy, young adults to enroll, since their premiums are needed to help cover the cost of care for older and sicker participants. But millennials, as those in their 20s and early 30s are known, are putting off many big life decisions, such as buying a home, getting married, starting a family—and buying insurance to protect it all.

“We’re talking about a whole bunch of people who have never before shopped for insurance, and now they’re being told, ‘go buy it,’” says Jason Dorsey, an author and consultant who advises corporations on how to market to millennials. “They don’t know how to buy it and they don’t know if they need it.”

Related: Obamacare: Worst Law Passed in Four Decades Must Be Stopped, Says Stockman

So far, the federal Obamacare site seems more inclined to turn off millennials than persuade them to enroll. One page meant to explain how the ACA works refers to young adults under 26 as “children.” The website uses phrases such as “open enrollment” and “insurance marketplace” as if they’re commonly understood. And it urges people to apply for coverage by phone if the website doesn’t work.

“This is a generation that does not talk on the phone,” Dorsey says. “They really missed the mark on messaging.” If enough millennials give Obamacare a thumbs down on social networks like Facebook (FB) and Twitter, he adds, young people may avoid it en masse. Hiring some actual young adults to figure out how to pitch Obamacare to young adults might be a good start.

#3: Get insurance brokers more involved.

When Healthcare.gov was still theoretical, its creators envisioned it as a classic Web innovation that would shave costs by eliminating middlemen—namely, insurance agents and brokers—and allowing shoppers to choose a plan though a public exchange over the Internet. But if the whole effort needs anything right now, it’s a cadre of seasoned pros who can guide millions of people to plans that fit their needs and budget.

“Given how hard it is to get these exchanges to work, officials are now much more favorably inclined to getting brokers involved,” says Tom Baker, a professor at the University of Pennsylvania Law School. “That would be a big improvement in the short term.”

The law already includes provisions for fielding thousands of “navigators” -- people who typically work for social-service organizations and have received extra training to help people enroll in Obamacare and explain how it works. But insurance brokers have many added advantages, such as professional relationships with insurance companies, along with certifications and licenses. State insurance commissioners and in some cases the federal government could establish new rules or incentives that allow brokers to play a bigger role in the public exchanges, usually at no cost to consumers, since insurance companies would pay their commissions.

#4: Allow problems to surface.

A recent Washington Post article revealed how Obamacare officials hid early problems and details of the program they felt might be controversial, because of hostility to the law by opponents eager to publicize every potential setback. Such a defensive posture produced insularity that contributed to the botched launch.

For Obamacare to succeed, the people running it must be willing to change it as they figure out what works and what doesn’t. That means acknowledging problems instead of concealing them, no matter how much political heat it draws.

“This law was meant to be incremental and to slowly improve,” says Jon Gruber, a Massachusetts Institute of Technology economist who helped design the Massachusetts health reforms Obamacare was based upon. “It took about three years before our law in Massachusetts realized its potential.”

Insurance officials in California have already allowed insurers to extend policies due to be canceled at the end of the year, to allow people losing coverage that doesn’t comply with the ACA more time to find replacement policies. It might be prudent for the Obama administration to recommend a blanket extension for all states, to help resolve one of the most controversial early ramifications of the new law. No doubt, there will be a need for other workarounds. The faulty website is only the beginning.

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.