Health insurers in the Obamacare marketplaces are starting to slowly enroll new customers after computer bottlenecks and window shoppers complicated the debut of the exchanges.

Molina Healthcare Inc., Cigna Corp. and the other insurers selling plans in the government-run exchanges are reporting a trickle of applications. They anticipate sign-ups will increase as technological issues in the enrollment process are corrected and consumers gain familiarity with their options.

The 2006 Massachusetts health law that became an outline for the U.S. Affordable Care Act may show what's to come. When that exchange opened, people on average had 18 different contacts with the website, call centers and other sources provided by the state before they actually bought a plan.

“What we are seeing is a lot of shopping right now and very few decisions being made,” said J. Mario Molina, the chairman and chief executive officer of Long Beach, California-based Molina, which is selling exchange plans in nine states.

Insurance markets for 36 states are being run by the U.S., while 14 states and Washington, D.C., have created their own sites to sell the subsidized medical plans. The government's computer networks must collect health data from customers and compile financial records from seven federal agencies including the Internal Revenue Service, before routing that information securely to the insurance companies.


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“The best minds at Google, Facebook or Microsoft would have found this daunting,” said Frank Gillett, a research analyst at Forrester Research Inc., a Cambridge, Massachusetts-based Internet-technology consulting firm.

Difficult startup

The federal health exchange saw repeated software troubles and long waits in its first two days, as 7 million people visited healthcare.gov to check out the insurance offerings. The 14 exchanges run by individual states, including Nevada and Connecticut, reported similar delays after opening Oct. 1.

It may take as much as a month for the exchanges to adequately deal with daily traffic and load capacity, said Paul Luehr, a managing director at New York-based Stroz Friedberg LLC, an Internet-industry consulting firm.

“For someone to run an experiment of this size, it isn't as easy as someone plugging in a new server,” Luehr said. “They've got a lot of moving parts.”

The government has said it didn't have the initial capacity to handle the larger-than-expected number of visitors in the first days. Since then, it has been adding servers and reconfiguring systems, Joanne Peters, a U.S. Department of Health and Human Services spokeswoman, said yesterday.

Cyber Monday phenomenon

Portals on the federal exchange that rout users to older computer systems, security limits that may have slowed the system's ability to right itself, and an initial explosion of interest might have contributed to the opening-week delays.

“When technology doesn't work, the immediate instinct is to blame these lazy IT geeks who made a mistake, but the reality is these things are extremely complex,” said Carter Burden, founder of Logicworks Corp., a cloud computing and management company. “If Wal-Mart had not had a website for the last 16 years and just launched on Cyber Monday, that site would probably fall over as well.”

Advocates for the Affordable Care Act are trying to temper expectations.

“It's really the start of a conversation,” Anne Filipic, president of Enroll America, a nonprofit group created to promote the 2010 health law, said on a conference call yesterday. “You don't walk into a car lot and buy the first thing you see. People really take their time to weigh their options.”

Expecting a surge

While consumers may sign up now, health coverage won't begin until Jan. 1. People can enroll as late as Dec. 15 and still be eligible for coverage as of the first of the new year.

“There's really not a whole lot of incentive for anybody to enroll today,” Molina said. “I'd really be surprised if we had much activity before November.”

Other health insurers said they were seeing applications come in, though still just a small amount. Cigna, which is selling plans in four states where the federal government is running the markets, began to enroll people yesterday, Joe Mondy, a spokesman for the Bloomfield, Connecticut-based company, said in a telephone interview. WellPoint Inc., the largest U.S. health insurer by enrollment, was also beginning to get customers' applications through the U.S. marketplaces.

'Small Number'

Neither WellPoint nor Cigna would say how many applications the companies had received. Blue Cross Blue Shield of Louisiana had a “small number” of applications sent in by the U.S.

“Any applications coming through, however few, were good news,” Mike Reitz, the chief executive officer of Blue Cross Blue Shield of Louisiana, said yesterday in a statement. “It tells us that the government website is beginning to function.”

Consumers are still facing technical issues. Three days after debuting, the exchanges still wouldn't allow some users to create accounts, the first step toward enrolling in a plan. During testing last month, consumer data being forwarded to the insurers had information missing, wrong or corrupted, Cigna's Mondy said.

“We did face initial challenges, those have been cleared up as of” Oct. 2, he said. The tests and fixes continued until this week.

The computer system behind the main website is designed to route data on customers shopping for insurance from seven federal agencies. A slowdown in data coming from any of those sources could create a choke point that would bring the entire system down, said John Engates, chief technology officer of San Antonio, Texas-based Rackspace Hosting Inc., which helps companies manage their web traffic.

Short on time, money

While the site crash could have been avoided, it probably would have taken more time and money to develop, he said.

“You could have a very modern web operation, like a Google or a Facebook, but the behind-the-scene stuff, the databases where your eligibility info may be stored, that may be a very old system that wasn't up to the demand,” Engates said.

Heavy traffic wasn't the only issue. In Nevada, the problems that brought the site down on the first day were mostly technical, said Kevin Walsh, a senior vice president and managing director at Xerox Corp., which was contracted to build Nevada's exchange.

While the Nevada site never passed 50 percent of capacity, there were bottlenecks where too many people were trying to complete the same task at once, like creating a new account, forcing the company to reroute traffic to other servers. The site also had issues with its database, at one point having to shut down for a few minutes for repair, and some Internet browsers weren't compatible with certain areas of the system.

'Typical bugs and bumps'

“Through the course of the day we had some typical bugs and bumps we were working out,” Walsh said. “We've resolved all of those as of mid-morning.”

Some of those issues may have been avoided with more time. While the law was passed about three years ago, many technology vendors had only about a year to build a system that would typically take two to three years of effort, Walsh said. Some of the data for Nevada's site, such as the health plans being offered, wasn't available for the programmers until four weeks ago, he said.

“The real test will come in a month or two because by that time the exchanges should have a better handle on the daily traffic and load capacity,” said Luehr of Stroz Friedberg. “The first few days are always difficult no matter what size company you are.”