Yes, Obamacare = vaporware

And here's what Megan McArdle had to say about the technical challenges in doing just the IT implementation of Obamacare:

I was drawing on my experience doing IT implementations. Six months is an extraordinarily aggressive timetable to start doing an IT project, even one that’s what one of my colleagues used to call “shake and bake”: take it out of the box, add a few of your own ingredients, and serve it up.

Yes, the administration had been working on Obamacare since it passed in spring of 2010. But it seemed to me that just the build phase would take longer than they were allowing, because Obamacare had a lot of complicated parts; it’s basically a giant Rube Goldberg machine that breaks if any of its major pieces goes even slightly awry.

As the law (and all the wonks) had described them, the exchanges needed real-time data from the IRS, in order to calculate whether purchasers were eligible for subsidies, and how big those subsidies should be. In order to determine subsidy eligibility, they also needed to know whether your employer had offered you health coverage costing no more than about 10% of your family income, as they were required to by law (and subject to a fine if they didn’t). Only those who couldn’t get affordable employer coverage were eligible to purchase subsidized insurance on the exchange.

That’s two sets of big, secure databases that needed to be hooked into just for the subsidy part. One of them had to be created from scratch, and it wasn’t clear to me that the IRS was ready to deliver real-time payroll data, either.

Then there was supposed to be some sort of hook into the state Medicaid systems, for those below 133% of the poverty line. There was also, of course, the part where insurers sell you insurance. That seems like an enormous project all by itself.

As if that wasn’t hard enough, most of the exchanges were being set up under federal procurement rules, which make it slow and ponderous to commission software and buy equipment. When I was working for banks and other financial firms, if the developers needed a bank of new servers for an important project, I could get that signed off and shipped within a week, two at the outside, as long as the powers-that-be really wanted it to happen. That just doesn’t fly in the government.

Note that McArdle is only talking about the complexity of the IT implementation. That is, she is stipulating that there is a clear mapping from the 2000 pages of the ACA to business processes and that these processes just need to be implemented in software. Well, my guess is that the ACA is probably incredibly vague on many points. Think for a moment about how much discussion there has been over the years on how to calculate fair value. Think for a moment about how much litigation there was around the question of whether bank foreclosures were processed fairly. There is an enormous potential for litigation if evidence emerges suggesting that the system implementation of Obamacare does not accurately reflect the wording and intent of the law.