Mr. President, let markets help save Medicare

Imagine if an American president who was unhappy with a company like Amazon.com proposed the creation of taxpayer-funded site called Retail.gov to do retail right. As odd as that sounds, that’s precisely what happened when President Obama created HealthCare.gov. Companies that were already in the e-commerce space like eHealth, which created the e-commerce infrastructure for buying and selling health insurance online, suddenly found themselves forced to compete with a heavily subsidized taxpayer-funded site.

Fortunately, the Trump administration has expressed its desire to “wind down” the Affordable Care Act’s federal exchanges and HealthCare.gov in its recent budget request. Yet, some are now urging the Trump administration to essentially repeat Obama’s mistakes and heavily invest in “improving” the consumer shopping experience in a far more costly and expensive area: Medicare.  

{mosads}A new report by a health care coalition describes the federal government’s effort to help seniors navigate the Medicare program as woefully inadequate. The Medicare Plan Finder tool onMedicare.gov earned seven grades of “D” or “F” according to the Clear Choices Campaign, a joint project of the Council for Affordable Health Coverage and the National Council on Aging (NCOA). 

The report concludes the “website layout and display are confusing,” “language is not user-friendly,” and “human support is not available.”

The results are hardly surprising. The federal government isn’t built to do e-commerce well. The troubled launch of HealthCare.gov is Exhibit A. The site has cost more than $9 billion to date and the rollout was a debacle as my former boss, U.S. Senator Tom Coburn (R-Okla.) detailed in his 2013 Wastebook.

President Obama had to apologize to the country for the site not working while then-Health and Human Services Secretary Kathleen Sebelius described the launch as a “miserably frustrating experience.”

The Trump administration could easily go down this path in the Medicare space if they aren’t careful. The Clear Choices report describes the Medicare Plan Finder as more structurally flawed than HealthCare.gov.

No amount of government funding will fix those flaws. Rather than competing with or duplicating private sector platforms that already help seniors navigate Medicare, the administration should let the private sector lead the way. Both taxpayers and consumers will get a better value.

Consider the eHealth experience. Even as it faces unnecessary competition from HealthCare.gov, their cost of acquisition for new customers in the under-65 individual market is one-seventh that of the ACA’s Navigators program. Meanwhile, eHealth’s Net Promoter Score among Medicare shoppers (a widely adopted metric that measures customer loyalty) is 87. That’s nearly twice as high as the score for online hopping (44), three times as high as travel websites (30) and five times higher than traditional health insurance landing pages (17).   

In the digital age, private sector platforms should be expected to outperform government. And they do. In the highly competitive e-commerce world, providing barely tolerable DMV-like customer service doesn’t cut it. Monopolies of mediocrity can survive in the public sector but they don’t last in the private sector, especially online. 

This Tuesday, May 8, the House Ways and Means Committee will take a closer look at Medicare.gov. Policymakers, staff and taxpayers should have their eyes wide open as they navigate the changing landscape of e-commerce and health care. A key lesson from the HealthCare.gov debacle is that government-backed sites can survive as long there is funding, but private sector platforms only exist if they provide exemplary customer service that keeps consumers coming back. In the digital age, that experience has real value for everyone — consumers, policymakers and taxpayers.

Medicare itself faces insolvency in just over a decade. For all the attention surrounding repealing and replacing ObamaCare, Medicare cost twelve times as much as the ACA this year ($707 billion to $58 billion). Every serious bipartisan proposal to save and protect Medicare for future generations offered in the past 20 years (i.e. plans offered by John Breaux, Alice Rivlin, Paul Ryan and Simpson-Bowles) incorporates competitive market forces to keep the program solvent. The federal government should welcome more of what the private sector is already providing. They’re going to need it.

The Clear Choices report offers the right diagnosis but proposes some wrong-headed prescriptions. An open ended marketing earmark for a flawed web tool could give seniors nothing more than a website to nowhere.

The federal government tried to outperform the private sector with HealthCare.gov. It didn’t work. The Trump administration can reverse that error and avoid making a new one with Medicare.

John Hart is the former communications director for Sen. Tom Coburn’s (R-Okla.) and co-author, is the Founder of Mars Hill Strategies, a public relations and public affairs firm, whose clients include eHealth.