We’re now entering the post-HealthCare.gov phase of Obamacare

Aside from Republicans, the biggest obstacle to enrolling people in Obamacare has been the Affordable Care Act’s own federal Web site. The feds intended it as a portal to health care for people in the three dozen states that didn’t set up their own exchanges, but it turned into more of a barrier than a gateway.

But HealthCare.gov’s role is now changing, as customers from the two-thirds of the U.S. it covers will soon have the chance to enroll in subsidized insurance through federally licensed commercial insurance exchanges — potentially changing the scope and flow of health care signups and shifting much of the activity to the private sector.

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Web brokers for hire

Last year, the U.S. Department of Health and Human Services (HHS) and its Centers for Medicare and Medicaid Services – the department and agency overseeing health care reform – issued regulations that permit commercial insurance exchanges to enroll individuals who are eligible for tax subsidies under the Affordable Care Act.

In July, a number of commercial exchanges – including eHealthinsurance.com, GetInsured.com, ExtendHealth.com, ConnectedHealth.com and GoHealth.com – signed an agreement with HHS to act as web brokers through the Federally Facilitated Health Insurance Exchange (FFE), the new federal health data ecosystem of which HealthCare.gov is the most visible frontend.

The licensed exchanges are required to display and sell all Federally Qualified Plans (FQPs), although they may be brokers for only some of the insurance companies. The plans can be recognized by the “metal” in their name (bronze, silver, gold and platinum levels).

But the exchanges have not yet able to enroll customers in these FQPs, as they have been unable to provide ID verification and subsidy determination because of some of the same technical issues that have beset the federal site.

Without those steps, the enrollment for those plans at subsidized prices can’t move forward. On each of the brokering exchanges, the subsidy determination step is sent through HealthCare.gov’s data hub, and, when completed, the user’s application is sent back to the originating commercial exchange. Applicants at the lowest end of the income scale are sent to the state-appropriate locations for the CHIP or Medicaid programs.

Michael Mahoney, the SVP of Consumer Marketing for GoHealth.com, told VentureBeat that his company’s exchange has been ready to process applicants interested in subsidies since Oct. 1, when HealthCare.gov and most of the 14 state exchanges opened. But, he pointed out, “we default to the federal process for the official subsidy.”

The data hub is the key

The main reason that the HealthCare.gov project has been so beset with technical difficulties is that there’s a lot of complexity behind the scenes. It’s no mere web site, but rather a complex application that integrates with a lot of other databases.

The HealthCare.gov data hub communicates with the databases at IRS, Experian, and elsewhere that are needed to determine ID validation and subsidy determination. Built for the federal government by contractor Quality Software Services, Inc. (QSSI), the data hub reportedly is working fairly well. The evidence for that is that state-run exchanges, including smoothly working ones in such states as Kentucky, Washington state, and California, talk directly to the data hub to run their ID and subsidy determinations.

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But unlike the state exchanges, the commercial exchanges are required to interact with the data hub through a technical interface built by CGI Federal, the contractor that has received a lot of heat for the HealthCare.gov problems.

“We’d like to have a direct connection to the data hub,” said Sam Gibbs, the president of eHealth Government Systems at eHealthinsurance.com. “But right now, we have to go through a HealthCare.gov interface.”

Since the state exchanges communicate directly with the data hub, the requirement for using HealthCare.gov’s technical interface is apparently not a technical issue for them — but it is for any commercial exchange. The last hurdle to fully opening these commercial exchanges appears to be working out the final kinks in that interface.

Bryce Williams, the managing director of exchange solutions at Towers Watson’s Extendhealth.com site, echoed several other commercial exchanges in his assessment that the pathway through the interface and the hub “has improved dramatically in the last six weeks,” but that it remains to be seen if the final issues will be cleaned up by the end of November.

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In mid-November, CMS spokeswoman Julie Bataille said that commercial insurance marketplaces will be able to start determining subsidies, verifying IDs, and enrolling people “in the coming days.” The agency is also working to provide insurance companies with a similar capability to determine IDs and subsidies directly.

‘Many, many thousands’

In the meantime, GoHealth, like the other licensed exchanges, is assembling a queue of “many, many thousands” of customers who have completed their initial applications and have utilized a GoHealth subsidy estimator on the site. SVP Mahoney said that 52 percent of families initiating applications are eligible for subsidies, a percentage that he believes will be higher once everything starts flowing.

The subsidies are available for those whose Modified Adjusted Gross Income — MAGI, the income tax term for income minus certain deductions — is no more than four times the poverty level. For a single person, this means a top MAGI of about $46,000; for a family of four, it’s up to about $94,000. Subsidies are key: Without a subsidy, a family might pay up to 30 percent of their annual income on premiums alone; with the subsidy, the cost of the second-lowest Silver plan is capped at about 9.5 percent of annual income. The subsidy can also be applied to other metal levels.

HealthCare.gov says it can currently handle 20,000 to 30,000 simultaneous users, which it will boost to 50,000 by the end of November. But even that might be insufficient to handle millions of last-minute enrollees, as the recently extended Dec. 23 deadline approaches for coverage beginning Jan. 1.

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The commercial exchanges could provide an essentially unlimited additional load capacity, since they are built to quickly scale. eHealthinsurance.com’s Gibbs, for instance, told VentureBeat that his company’s system is designed to handle ten-fold more than its actual peak load. In fact, he said, “we have the capacity to take all of HealthCare.gov’s traffic by ourselves.”

‘HealthCare.gov Plus’

Besides capacity, there are also several potential other added-values provided by the commercial exchanges. “We like to think of ourselves as HealthCare.gov Plus,” said GoHealth’s Mahoney.

The exchanges are able to handle payments to the insurance companies, something that HealthCare.gov currently has to hand off to insurance companies themselves. And they can offer advice to customers on which plans make the most sense, since most or all of the customer service reps in the commercial exchanges are licensed insurance agents, and thus legally able to provide buying advice.

As ExtendHealth’s Williams pointed out, 2,000 workers at his company’s call center are “licensed agents to help you make your decision.”

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A spokesperson for ConnectedHealth.com noted that over 20 million Americans have access to a version of its site through employers, brokers, or payroll companies, adding, “It’s a good bet that many are opting to use a guided experience where they can create personalized recommendations based on their own preference and budget.”

One pending question is whether an exchange’s agents will push plans for which the exchange receives a commission, steering customers to those plans instead of the nonbrokered plans it must also display. The exchanges have every reason to broker all the plans, although it’s not yet clear if all insurance carriers, especially new nonprofit ones like Health Republic in New Jersey, are prepared to meet exchanges’ commissions.

Wanted: Young people

Another difference from HealthCare.gov might be the age of the exchanges’ users. eHealthinsurance.com’s Gibbs told VentureBeat that his company can provide greater access to the user pool that Obamacare most needs to keep premium prices down: young people, whose generally better state of health means they cost the system less than older customers. He said that half of the customers on eHealthinsurance, which has been in this business since 1998, are 30 or younger.

eHealthinsurance, like most other commercial exchanges, also has extensive partnerships with large companies to provide access to plans for their part-time employees, who are often not covered under company plans and have to shop for individual insurance.

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This outreach can pull in people with many different profiles and offer them customized service, Gibbs added. “Someone with 130 percent of the poverty level is going to need something different than a millionaire farmer in Iowa,” he added.

ExtendHealth.com is primarily oriented toward providing health insurance plans to part-time/seasonal workers and early retirees who are associated with large enterprises. ExtendHealth’s Williams noted that “a large retailer with 20,000 part-time workers” can direct its employees to federally qualified health plans and subsidies through its ExtendHealth portal.

“The federal government is not expected to be good at forging these kinds of business relationships,” he added.

Nor are the 14 exchanges set up by states. The commercial exchanges are also eager to help enroll customers for the plans on the state exchanges, especially since the state exchanges’ access to the data hub is direct. eHealthinsurance’s Gibbs said that Maryland, Washington, and many other states have agreed in principle to the idea that commercial exchanges will take over some of the load, but the implementation is still underway.

Tim Jost, a law professor at Washington and Lee University who specializes in health care policy, told VentureBeat that the idea of commercial Web brokers enrolling subsidy-eligible customers has been around since the beginning of the Affordable Care Act, and its upcoming implementation “is a big opportunity to get a lot more people enrolled.”

He added that enrollment through the commercial exchanges will likely have the biggest impact “on middle income people who are eligible” for subsidies, rather than the lowest end of the income ladder. But that could dramatically change the income profile of the signups thus far, which have overwhelmingly been for Medicaid for those at or near the poverty level.

When the history of the first two decades of the modern Internet is written, HealthCare.gov may deserve its own chapter. Reportedly near or at the top of the most technically complex Web sites in history, it has also become the lightning rod for the political warfare surrounding health care reform.

While these conditions won’t soon disappear, its current role as the only bridge to subsidized individual and family health insurance in two-thirds of the country is about to change into a bigger marketplace employing a new health care data infrastructure.