It’s time to shut down HealthCare.gov

During the early 1970s, students at Stanford University and the Massachusetts Institute of Technology carried out what is reputed to be the first e-commerce transaction: the sale of an undetermined quantity of marijuana.

This year, global online retail sales are projected to exceed $2.4 trillion. By 2020, e-commerce will account for 14.6 percent of all retail purchases, nearly doubling its market share in just five years. Consumers shop online for everything from cars to car insurance.

Which raises the question: Do we really need HealthCare.gov?

The government website made its late and inglorious entrance into the e-commerce marketplace in October 2013. By then, consumers had been using their PCs, laptops and various other devices to buy health insurance for at least 15 years.

Washington nevertheless insisted on reinventing the wheel. Instead of relying on existing online health insurance brokerages and letting a crop of new market entrants compete to sign people up for ObamaCare policies, the administration established HealthCare.gov as a government monopoly.

Online brokers were forbidden to compete with it. They were instead required to redirect prospective customers who qualified for subsidies to HealthCare.gov to complete the enrollment process.

The system flopped. Frustrated consumers endured repeated website crashes, signups slowed to a trickle and the government frantically threw mountains of cash at poorly supervised contractors with disappointing results.

{mosads}Although the website survived the worst of the turmoil, problems remain. HealthCare.gov still puts prospective customers into a “waiting room” as the enrollment deadline approaches. If Amazon.com shut down during the pre-Christmas rush, it would make global headlines. HealthCare.gov does it every year.

Meanwhile, the costs of running HealthCare.gov continue to mount. According to its fiscal year 2017 Centers for Medicare and Medicaid Services budget submission, the agency has so far spent more than $9 billion to cover the federal exchange’s enrollment, advertising and information technology costs.

Much of this money has come from a “user fee of 3.5 percent of premium on every policy sold through the exchanges, the practical equivalent of a tax that makes an already unpopular product even less attractive. Yet the government continues to force consumers and taxpayers to bankroll its costly website and ineffective ObamaCare advertising campaigns.

The Trump administration should ask itself why the government is in the e-commerce business and why it is underwriting a marketing campaign to promote a private health insurance product.

Marketing those products should be left to those who profit from their sales: insurers who issue policies and the brokers and agents who sell them. That includes private online brokers who operate consumer-friendly web portals that actually work.

The new administration should issue two new rules for the 2018 enrollment season:

1. It should let online brokers complete enrollments for people who qualify for subsidies. No need to redirect these applicants to HealthCare.gov.
2. It should stop imposing user fees to prop up its unnecessary website and finance ad campaigns.

These two changes would set loose an army of insurance carriers, traditional brokers and private online exchanges, all competing to enroll people in subsidized coverage.

The government role would be limited to its essential function: determining who is eligible for subsidies and how much they’re eligible for. Once those subsidies were determined, private brokers could complete the enrollment process.

Imagine the potential of private-sector companies that specialize in health insurance enrollments having a relationship with the federal government that’s similar to the relationship between the IRS and TurboTax or H&R Block. Consumers would be able to use their tax credits to shop anywhere they choose, instead of being herded into HealthCare.gov.

That is precisely the sort of robust, consumer-driven market that the administration and congressional Republicans have promised to put in ObamCare’s place.

As it pursues its agenda of repealing and replacing ObamaCare, the new administration should leverage the experience and expertise of the private sector to increase medical coverage. Shutting down this failed experiment in government “entrepreneurship” and opening health insurance markets to genuine entrepreneurs would be a big step in the right direction.

Doug Badger is a senior fellow at the Galen Institute. Previously, he served as senior White House adviser to President George W. Bush as well as Bush’s deputy assistant to the president for legislative affairs. He also served as chief of staff to former Sen. Don Nickles (R-Okla.) and as staff director of the Senate Republican Policy Committee.

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