…Please Hold. Will Consumers Continue to Shop?

By FOXBusiness

Bargain-hungry consumers are shopping online today to score deals on this holiday season’s hot items and the retailers are ready for them. Cyber Monday coincides with the White House’s self-imposed deadline to get running more stable and able to handle the influx of users looking to sign up for health insurance—but the big question remains: is the site ready?

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According to Health and Human Services Secretary Kathleen Sebelius, the federal registration website is running faster and can now handle more traffic without the errors and crashes many users experienced during the first two months of the Affordable Care Act’s open enrollment season.  “The site is running faster, it’s responding quicker and it can handle larger amounts of traffic,” Sebelius said in an op-ed in USA Today.

The site can now handle up to 50,000 visitors at a time, according to the Centers for Medicare & Medicaid Services (CMS), and can handle up to 800,000 visitors a day. To put this in comparison, Amazon (NASDAQ:AMZN) has 2.7 million visitors a day, and eBay (NASDAQ:EBAY) has 4 million visitors daily, according to research firm Quantcast.

But improvements on the site may not be up to snuff with business requirements and consumer expectations.

Sebelius has urged visitors to visit the site during off-peak hours (mornings, evenings or weekends) and to be prepared with all the required documentation when they shop.

DeAnn Friedholm, director of Health Reform at Consumers Union, says anecdotal evidence shows consumers were able to log on to the site easier than in the past.

“The question for today is, will there be such a large rush of people that it will cause problems for the website,” she says. “If more than 50,000 people log on at once, they will receive a notice to come back. [HHS] is also sending out notices to consumers who have registered but haven’t come back” to complete their enrollment on the site.

HHS has also implemented a queuing area for visitors to wait while it processes capacity, which reads “ has a lot of visitors right now!” and urges consumers to gather the documents they need, browse health prices in their area and use the site’s subsidy calculator to see if they qualify for a lower-cost plan while they wait to be able to fully log on and use the site.

Consumers will have until Dec. 23, 2013 to enroll in coverage to have their insurance plans active on Jan. 1, 2014. Under the ACA, all Americans are mandated to have health insurance by the end of open enrollment period on April 1, 2014. If they fail to have coverage for three consecutive months after this date, they will be penalized $95 or 1% of their annual income for every year they opt not to have coverage.

Sticker Shock Still Exists Despite Fixes

Just because consumers are having an easier time getting on the site, doesn’t mean that they will complete the enrollment process, warns Devon Herrick, National Center for Policy Analysis senior analyst. Many may still be experiencing sticker shock when they see their premiums.

“There are more than two classes of people—you can’t divide this up into those who stand to benefit from subsidies and those who will have to pay extra,” he says. “Those who will get the bargain will be persistent and will go on at 3:00 a.m. to sign on. Others may not be that persistent.”

Friedholm says that even those who may be unhappy with pricing will likely be more persistent than they would be with buying items on sites like Amazon and eBay.

“People will be more tenacious on this than they will be with getting a toaster,” she says. “It’s so hard to find affordable insurance; it’s become difficult to afford a policy. Shoppers now have better head-to-head competition from insurance companies, and we can see some changes that will make it more affordable for Americans to purchase insurance.”

Insurance Companies Cry Foul

Even if consumers are having a better shopping experience on this week, insurance companies may not be sharing their sentiments. America’s Health Insurance Plans released a statement Monday, criticizing the site’s fixes.

“Until the enrollment process is working from end-to-end, many consumers will not be able to enroll in coverage. In addition to fixing the technical problems with, the significant ‘back-end’ issues must also be resolved to ensure that coverage can begin on January 1, 2014. In particular, the ongoing problems with processing ‘834’ enrollment files need to be fixed. Health plans will continue to support federal and state officials’ efforts to fix the ongoing technical problems and improve the Direct Enrollment process so that consumers can get the coverage they need,” Karen Ignagni said in a release.

With so much emphasis on fixing the site for consumer benefit, Herrick says the needs of insurance companies may have taken a backseat.

“This has been almost entirely about getting the user interface to work correctly, because if people can’t log in, that is bad publicity,” he says. “There are fewer insurance companies out there than consumers. I suspect insurers’ issues will be the next round of problems.”

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