Feds Spend Another $20M on Healthcare.gov

    The Centers for Medicare and Medicaid Services (CMS) released details of the latest contract with Terremark Federal Group covering "open market items" required for the ongoing operation of Healthcare.gov.  The documents include an itemized list of computing and network services, fees, licenses and computing capacity.  The total comes to $19,755.465.98 and covers four months:

    The expenditures appear to relate to the increased capacity that CMS has said was being added in anticipation of increased interest in obtaining Marketplace insurance as the March 31 deadline nears. The government had previously announced that Terremark, a subsidiary of Verizon, was being replaced by Hewlett-Packard.  However, since the switch-over was scheduled for the end of March just as open enrollment is ending, CMS awarded Terremark a $58,000,000, seven-month extension back in January.

    The two contracts mentioned above are just the latest in a string of contracts awards, solicitations, and sources-sought notices by CMS since Health and Human Services (HHS) Secretary Kathleen Sebelius announced the creation of a new Chief Risk Officer (CRO) position at CMS on December 11, 2013.  Sebelius described the new CRO's initial task as follows:

The Chief Risk Officer’s first assignment will be to review risk management practices when it comes to IT [information technology] acquisition and contracting, starting with identifying the risk factors that impeded the successful launch of the HealthCare.gov website.  I will ask this individual to report back to me in 60 days with recommendations for strategies to mitigate risks in future large-scale, CMS contracting and IT acquisition projects.

    Three and a half months have passed since Sebelius instructed CMS Administrator Marilyn Tavenner to create the position, but both HHS and CMS have been silent about it during that time.  No announcements or press releases have discussed the position, and as we first reported back on February 7, the organizational chart for CMS lists no Chief Risk Officer.  Nevertheless, CMS has continued to contract for tens of millions of dollars in IT goods and services, the very expenditures for which the new CRO was to submit "recommendations for strategies to mitigate risks" within 60 days of being appointed.
    Numerous emails to HHS and CMS inquiring about the position have gone unanswered.


Note: A version of this post first appeared at The Weekly Standard.

HHS Invokes 'In Sickness and in Health' to Push Obamacare

    For the latest installment in Department of Health and Human Services Obamacare "My #GetCovered Story" series, HHS has borrowed a line from the traditional wedding vows: "In sickness and in health."  In a blog post of that title, a "theater artist" from Chicago, Illinois tells the story of how her own experiences have put a "new light on the phrase 'in sickness and in health'" for her and her fiancé, a writer and adjunct professor:

As a theater artist working part-time jobs to support myself, I couldn’t afford to buy health insurance. And that didn’t worry me – I’m 32 and never had any health problems. I’ve always taken good care of myself: I do yoga, I ride a bike, and I eat well. 

Honestly, I decided to sign up for insurance through the Health Insurance Marketplace because I support the goal of expanding health coverage in this country, not because I thought I’d need it. I also convinced my fiancé, Diego Báez, who is a writer and adjunct professor, to enroll. 

My insurance started on January 1, and it’s a good thing, too. Soon after, I started feeling ill but didn’t think too much of it. Then on January 29, I was admitted to the hospital with a ruptured appendix and ended up having to stay in the hospital for 12 days. 

Without my new Marketplace plan, I don’t know how I would have been able to pay the cost of my care... 

My ruptured appendix was a wakeup call – for me and Diego. 

We’re getting married in September. This experience for us puts a new light on the phrase “in sickness and in health.”

    Hecht was able to find an HMO plan for only $56/month.  She assures others that signing up is "really easy to do," and urges them not to delay since the deadline is coming on March 31.  Healthcare.gov has had difficultly attracting healthy young people to enroll in Obamacare to widen the risk pool and keep premiums down.
    Ironically, it may be enrollees like Hecht that may lead to vastly increased Obamacare premiums in 2015 and beyond since her $56/month premium will cover only a tiny fraction of her 12 day hospital stay.  If Obamacare is going to have any chance of living up to its promise, the government will need to sign up a lot more young people in Hecht's under-35 demographic who spend a lot more time in health than in sickness.


Note: A version of this post first appeared at The Weekly Standard.

IRS: Obamacare Raised Taxes for Some Children

    When the Affordable Care Act was passed in 2010, one provision was a new 3.8% Net Investment Tax effective in 2013.  Although the tax will generally hit high-end taxpayers (threshold is $250,000 for married and $200,000 for single,) because of the way many parents choose to report their children's investment income, the tax will hit those children as well.
    While the basic application of this tax has been known since passage, the specific effects have become more apparent recently as the IRS issued its final rules, forms, and instructions.  Last Friday, the IRS published a tip on its website entitled "Tax Rules for Children with Investment Income." Included is this note regarding the Net Investment Tax [emphasis added]:

Starting in 2013, a child whose tax is figured on Form 8615 may be subject to the Net Investment Income Tax. NIIT is a 3.8% tax on the lesser of either net investment income or the excess of the child's modified adjusted gross income that is over a threshold amount...

    The new tax paid on children's income will be part of a so-called "kiddie tax" that stems from 1980s tax reform when Congress sought to recover taxes that were being lost on income from assets transferred from parents to children ("child" is defined as under age 19, or under age 24 if a full-time student.)  Investment income over $2,000 is taxed at the parents' highest rate instead of the rate used for regular income for the child.  And if the parents' income exceeds the NIIT threshold, the child's investment income is also subject to the additional 3.8% tax.
    The above scenario represents the simplest application of the regulations; individual situations can be more complex and will vary from person to person.  But according to a tax accountant interviewed by THE WEEKLY STANDARD for this story, "The bottom line: you will get a lot of upper-middle-class taxpayers paying an additional NIIT if they have shifted enough income-producing assets to their children via gift."  So while the tax was aimed at high-income taxpayers, it turns out Obamacare will hit some low age taxpayers as well.


Note: A version of this post first appeared at The Weekly Standard.

Cost of First Lady's Beijing Hotel Was Deemed 'Prohibitive' for Biden

    The White House has been tight-lipped about the cost of First Lady Michelle Obama's trip to China, but based on the choice for lodging, it could be considerable.  Mrs. Obama and her entourage, which numbers seventy according to the Washington Times (including her two daughters and her mother), booked the Westin Chaoyang Hotel close to the US Embassy in Beijing for their first stop.  According to USA Today, the presidential suite at the hotel is listed as $8,400 per night.
    But when Vice President Joe Biden visited China in December 2013, he and his team stayed at the St. Regis Hotel after the contracting officer responsible for booking rooms determined that the Westin Chaoyang hotel "price was prohibitive when compared with St. Regis."  This is according to the Justification and Approval documents just released this week on a government contracting website:

The following other hotels were reviewed but were not adequate because of the following: 

Grand Hyatt Beijing—cannot meet security requirements for travel into and out of the building.
Westin Chaoyang—price was prohibitive when compared with St. Regis—otherwise met requirements.

    According to the documents, the estimated cost for the vice president's visit was $384,479.19.  A total of 1,345 room nights were estimated for advance preparation for the visit as well as the vice president's actual stay:

An estimated 1345 room nights  are required to support this visit.  Starting on November 19 with 4 rooms and hitting a peak of 213 rooms on the days of the visit, the hotel will provide lodging rooms as well as office space for security, communications and staff as necessary.

    The State Department, the department that arranges such trips, has said in the past that hotel contracts  and the like are supposed to be posted within 30 days if the cost exceeds $150,000.  Occasionally this has included trips made by the first lady, such as her 2009 trip to Copenhagen to boost Chicago's efforts to bring the Olympics to that city.  It is unclear if this current trip to China will meet the requirements for contract disclosure.

UPDATE:  After this was posted at The Weekly Standard, I realized it was almost exactly a year since my Joe Biden $575K Paris hotel story that blew up all over.  That was a fun week.


Note:  A version of this post (before the update) first appeared at The Weekly Standard.

WH Now Partnering With Amateur 'iReporters' on First Lady's China Trip

    While the professional press corps has been frozen out of Michelle Obama's swing through China, one news organization is not entirely out of the loop.  CNN has partnered with the White House through the network's iReport program.  Katie Hawkins-Gaar, a CNN editor, coordinated the effort to solicit and accumulate submissions from "iReporters" interested in asking questions about the "importance of students learning from one another's cultures", Mrs. Obama's stated emphasis for this trip.
    The White House's webpage dedicated to the first lady's trip describes the "assignment" as follows:

CNN iReport Assignment: iReporters in the U.S. and around the world have submitted questions for the First Lady about study abroad. Stay tuned to watch Mrs. Obama answer questions from Beijing.

The link takes visitors to CNN's website where 19 iReporters signed up to participate with 349 iReports filed:

    All of the questions have been recorded and submitted to CNN in advance of the trip, and the public is invited to "[s]tay tuned to watch Mrs. Obama answer questions from Beijing."
    The White House also links to a PBS website which invites people to "Take a Virtual Trip to China with the First Lady," and in turn, links back to the White House website.
    Additionally, Discovery Education has joined forces with the White House as well, and "Jeff Wood, an American student from D.C. who is currently studying abroad in China, will pose questions to the First Lady on behalf of Discovery Education's online audience" while Mrs. Obama is in Beijing. Discovery links back to the White House website as well.
    Finally, the U.S. Embassy in China has arranged for two Chinese microblogging websites to solicit questions for the first lady to answer on her trip as well:

Q&A with Youth in China: The U.S. Embassy has invited their social media followers on Chinese microblogging websites Sina and QQ Weibo to post questions for the First Lady. While in China, Mrs. Obama will answer questions about her visit. The First Lady's responses will be posted in Mandarin on the Embassy’s social media platforms.

    The Obama administration has gone to great lengths to centralize available information about Mrs. Obama's trip to China.  Together with updates on Twitter and Instagram, the White House will be keeping a blog tracking the first lady's progress.  Since there will be few alternatives, these outlets, along with iCNN, PBS, and Discovery Education, will likely garner significant attention throughout the week-long visit.


Note: A version of this post first appeared at The Weekly Standard.

Healthcare.gov Quietly Drops Online Chat Customer Service [Updated]

    As consumers race to beat the March 31 Obamacare open enrollment deadline, they will have one less option to get help with the website that has experienced so much trouble over the past five and a half months.  Though it runs counter to the Obama administration's emphasis on   Though it runs counter to the Obama administration's emphasis on technology, typified by the White House's We the Geeks Google+ Hangout Series, Healthcare.gov has eliminated the web chat customer service option.  Sometime around the beginning of March, the online chat feature that has been present since Healthcare.gov was launched disappeared.  Although previous posts on the Healthcare.gov blog still refer to the "live chat" feature, the ubiquitous blue box in the lower right corner of most pages on the site is gone.
    Here is an example of how the "Live Chat" button previously appeared:

    There is even a cached page at Archive.org show the now obsolete chat window.  But the address for the chat window, https://www.healthcare.gov/chat, is now automatically redirected to the Contact Us page.

    That same Contact Us page provides the most obvious evidence of the removal of the chat feature.  A cached version of the page from February 28 appears this way.  The lower left box says that "Online Chat" is a "great way to get quick questions answered. Available 24 hours a day, 7 days a week."  Note the "live chat" button in the lower right corner as well:

    On the next available cached version of the page, March 5, four boxes have become three.  Online Chat is gone:

    While the dropping of the live chat feature passed without mention, Julie Bataille, Director of Communications for the Centers for Medicare and Medicaid Services (CMS) alluded to a change in a February 27 post at the Health and Human Services (HHS) Digital Strategy blog, saying that "we will transition 1500 service representatives from web chat to direct telephone assistance where they can help consumers with enrollment 24/7."  Bataille did not indicate that web chat was being abandoned altogether.

    HHS further noted in a blog post on March 11 that with 20 days to go in open enrollment, the agency was making "consumer improvements" and "staffing up."  The improvements included streamlining the account creation process, adding new "help text" for common questions, and adding system capacity to handle the expected increase in volume as the deadline nears.  "Staffing up" consisted of adding 2,000 phone representatives to answer calls at the 24/7 customer service number, and increased training for all representatives.  It is unclear if that 2,000 includes the 1,500 transfers from the now defunct live chat service.

    

    The removal of live chat is not the first time Healthcare.gov has made undocumented changes to the site:

• In January 2014, after THE WEEKLY STANDARD identified a security vulnerability on the site, HHS quickly and without notice disabled public access to the "open data" user profiles responsible for the opening.
• In October 2013, we reported that Healthcare.gov was using copyrighted software code without attribution.  Shortly thereafter, the attribution was added to the code despite HHS's failure to respond to repeated email inquiries about the missing lines.
• Also in October 2013, we reported the existence of the phrase "no reasonable expectation of privacy" in the source code of the Terms and Conditions of the site, although the words did not appear visible on the screen to users.  Not until Kathleen Sebelius herself was confronted in a Congressional hearing with the issue was the phrase removed two weeks later.
• In late September 2013, we reported that a reference to "free or low-cost healthcare" was abruptly changed to simply "low-cost."  HHS later described the deletion of "free" as a "routine change."

    HHS has not responded to an email inquiry about the removal of the live chat feature from Healthcare.gov.

UPDATE:  While HHS has not responded to an email inquiry, I found a tweet on the official Twitter account of the Marketplace confirming chat has been dropped.  A customer having trouble getting through on the phone was asking about other options and said, "Calling didn't work last night got disconnected several times. Is there no longer live chat?"  The reply said, "Correct, we transitioned 1,500 chat reps to direct phone assistance where they can help consumers with enrollment 24/7".  Here's the tweet in question:

@YoloELE Correct, we transitioned 1,500 chat reps to direct phone assistance where they can help consumers with enrollment 24/7
— HealthCare.gov (@HealthCareGov) March 12, 2014

Unfortunately, no reason is given for the change.


Note: A version of this post first appeared at The Weekly Standard.

Study Cited By Michelle Obama Showing Drastic Drop in Childhood Obesity Questioned by Researchers

    As Michelle Obama celebrated the fourth anniversary of Let's Move, her White House initiative on fitness and healthy eating, she cited a recent study by the Centers for Disease Control (CDC) showing a remarkable 43 percent drop in obesity rates among children ages 2-5.  Mrs. Obama brought up the study again on Friday at a Partnership for a Healthier America’s Building a Healthier Future Summit.  But a report by Reuters Health & Science Correspondent Sharon Begley casts doubt on the validity of the results of the study.  While Begley concludes that "no one can say for certain that the claim is wrong," the results are so uncertain that "based on the researchers' own data, the obesity rate may have even risen rather than declined."

    The problem lies in large measure with the small sample size of the CDC study and its relatively large margin of error.  Begley explains:

The 13.9 percent obesity rate among preschoolers reported for 2003-2004 had a large enough margin of error that the actual rate could range between 10.8 percent and 17.6 percent, the CDC authors acknowledged. The 8.4 percent rate in 2011-2012 reported could range from 5.9 percent and 11.6 percent.  

Since the range for 2003-2004 overlaps with that of 2011-2012, [epidemiologist Geoffrey Kabat of the Albert Einstein College of Medicine in New York City] said, "that's another way of saying there might have been no change" in preschoolers' obesity rate. Even an increase is a statistical possibility.

     The study size is not the only problem.  Other studies, some with considerably larger sample sizes, have shown significantly smaller decreases; others have shown little change; still others have actually shown obesity increasing.  For instance, a study of 200,000 children in the WIC (Women, Infants and Children) program "found virtually no change in obesity rates":

Rather than reducing the prevalence of obesity among 3-and-4-year olds in the WIC program in California's Los Angeles County, researchers found that the problem worsened from 2003 to 2011. Obesity rose to 20.4 percent from about 17 percent, the researchers reported in the CDC's Morbidity and Mortality Weekly Report in 2013. 

In New York, the WIC study found that obesity rates fell to 15.5 percent in 2011 from about 19.5 percent in 2003, a much less dramatic drop than the 40 percent decline. 

"We agree there is a slight downward trend in obesity among 2-to-5-year olds," said Shannon Whaley, a co-author of the WIC study. "But a 43 percent drop is absolutely not what we're seeing."

     This is not the first time Mrs. Obama has cited statistics in support of Let's Move that turned out to be less than meets the eye.  Just last year, on the third anniversary of Let's Move, the first lady's office sent out a press release that appeared to take credit for the recent developments that "national childhood obesity rate has leveled off, and even declined in some cities and states." In particular, the White House highlighted a 13% decline in childhood obesity in Mississippi.  But as we reported at the time,

[t]he 13 percent decrease that Mrs. Obama touted is measured from Spring 2005 through Spring 2011. “Let's Move” was launched in February 2010, so the first five years of the time period in question were prior to Let's Move's existence.

     This week's Reuters report questioning the 43% decline suggests one more reason to question the results showing a decline in pre-schooler obesity rates:

[F]ew anti-obesity efforts target preschoolers... 

"The programs that have been implemented, from changing what's in vending machines to the Let's Move program, target school-age children more than preschoolers," he said, referring to an exercise initiative championed by Michelle Obama.

    Rather than wait for results to come in over the long term, the White House seems too eager to show that Mrs. Obama's Let's Move program is having an impact while President Obama is still in office. However, continuing to cite studies that do not support the assertions being made may do more harm than good, not only to Mrs. Obama's reputation, but to the very causes her program seeks to advance.


Note: A version of this post first appeared at The Weekly Standard.