Obamacare’s 834 Problem Was Social Security’s John Doe Problem

Bill Scher

While the user performance of HealthCare.gov is greatly improved as of this week, critics are still focused on the back-end issue known as the “834 problem.” 834s are the forms that the federal government gives to private insurers when someone signs up for insurance through HealthCare.gov. Everyone knows there have been many errors in these files, but the Obama administration won’t confirm any numbers.

Much attention has been paid to the Washington Post report that “The errors cumulatively have affected roughly one-third of the people who have signed up for health plans since Oct. 1, according to two government and health-care industry officials.”

Less attention has been paid to the end of the Washington Post report:

…Julie Bataille, a spokeswoman for [the Centers for Medicare and Medicaid Services], recommended that insurance seekers who choose a health plan through the site contact the insurer afterward to make certain they are actually enrolled. “Consumers should absolutely call their selected plan and confirm that they have paid their first month’s premium, and coverage will be available January 1,” she said.

In a call with reporters Monday, Bataille said that about 80 percent of the errors with 834 forms — the enrollment data — stemmed from “one bug that prevented a Social Security number from being included. That caused the system not to generate an 834.”

“That bug has now been fixed and [that part] is now working properly,” Bataille said. She said that CMS also has addressed smaller bugs, including one that caused family relationships to be coded inaccurately…

People should be reassured that the key problems have been identified and are being worked on, making it unlikely that the 834 problem will end up being a fatal flaw.

You may think that’s just spin. But it’s common sense. Problem arises. Government comes up with a workaround. Then chips away at the problem.

In fact, the very same thing happened with Social Security in 1939, but instead of the 834 problem, it was the “John Doe Problem.” I wrote about it in October, here is a re-posted excerpt:

***********************

An “early crisis,” recalled the [Social Security] Bulletin, was the “John Doe” problem: “Many employers reported earnings without providing a worker’s name or SSN [Social Security number]. The first report from the Bureau of Internal Revenue did not contain SSNs for about 12 percent of the wage items—and this rapidly increased in subsequent reports.”

For two months, syndicated columnist Drew Pearson stoked panic over the John Does. Here’s one example from November 1939:

Admininstration executives … are up in arms over the high-handed bureaucracy which dominates the Social Security Board, and concern over the discovery of millions of unidentifiable “John Doe” records in the SSB files.

With pension payments due to start January 1, these unidentified records are loaded with political dynamite…

…Considerable progress has been made, but millions of cards — exactly how many is a matter of controversy, still are unidentified and will require many months and considerable expense to straighten out.

…Inside word is that it is only a matter of time before the Board goes the way of the junked Bituminious Coal Commission.”

In other words, as the former Chair recounted later, “They said that millions of people would never get their benefits.”

None of that was borne out. The Social Security Board figured out new procedures to extract information from employers and cut down on the John Does. The Board was not “junked.” It was reorganized into the Social Security Administration seven years later, though that was no shakeup, as the Chair of the old board was kept on as the first Administrator. He wasn’t punished because there were some early problems; he was kept on because he dealt with the inevitable problems.

Did the media panic force President Franklin Roosevelt to leap into action and save the day? Not exactly. As the Chair of the Board at the time said in a 1967 interview: “He wasn’t interested in it. He was bored stiff. I couldn’t have kept him interested in any of my woes. He laughed them off. That’s the only way he could survive, I suppose.”

It’s worth noting that the John Doe problem was not solved in one fell swoop, but gradually diminished over time. In all likelihood, the HealthCare.gov problems will be whittled away at too. And just like with Social Security, they will become an obscure historical footnote.

Comments