“There will be problems,” says Patrick Riley, a health senior industry analyst at Frost & Sullivan inMountain View,Calif.“I build websites for a living, and every website has had problems. There's no question [the exchanges] will. The question is: How are they going to handle it?”

Some sites already experienced hiccups in advance of open enrollment.

Connect for HealthColorado's site wasn't working properly back in May, when the state wanted to offer the public an easy way to check new health policy prices. And that was only for casual viewing.

Officials in other states admit not “everything” will be ready on time as initially planned, saying it will take more months to add some of the bells and whistles. Concerns about security and capacity are foremost.

Earlier this spring, President Obama even predicted “glitches and bumps” when enrollment opens.

“I don't think it's cause for concern or panic,” says Rosemarie Nelson, a principal consultant at MGMA Healthcare Consulting Group, in Jamesville, N.Y. “But that being said, we know that with technology, anything that can possibly go wrong will go wrong.”

'Months behind schedule'

The state exchanges are a main component of PPACA. The law's success hinges on the number of people who enroll in health coverage through the exchanges.

When the Obama administration this summer delayed other key parts of PPACA—including the employer mandate penalty—some became convinced an announcement regarding the exchanges was imminent. But the administration insisted they would launch on time.

It's a tall order.

This summer, the Government Accountability Office pointed to challenges in opening the federal exchanges on time, underscoring the challenges facing the administration driving the last remaining months.

Riley says the exchange launch—built on the federal data hub—is one of the largest undertakings of its kind for the government.

“The federal government is running 33 of the exchanges. People can't get their heads around how big this is,” Riley says. “No one knows if this is going to work.”

Just recently, a report from the Inspector General's Office at Health and Human Services spelled out concerns. In short, the federal health insurance exchange network is “months behind” on tests related to protecting privacy.

Much of the report focused on the federal data hub, a single point where new exchanges can access information on who qualifies for what programs.

“Several critical tasks remain to be completed in a short period of time,” the IG report stated.

The administration insisted that was old news—the report was from May, but only released in August.

HHS Secretary Kathleen Sebelius insisted the exchanges will open on time, while other officials said they've made significant progress solving the initial problems of the exchange.

Despite the government's reassurance, personal security remains a concern, industry insiders say.

Data security is paramount, as applicants will be required to submit a variety of sensitive details, including name, birth date, address and Social Security number, in the process of obtaining insurance. Some worry hackers could easily access the sensitive information of millions of Americans.

As the report summarized: “Effective security controls are necessary to protect the confidentiality, integrity and availability of a system and its information.”

With the launch just weeks away, it's an incredibly tight deadline.

States and major health insurance players haven't had time to test the efficiency of their systems, leaving even less time to work out all the kinks.

But Riley says it's impossible to fix all the problems without indefinitely postponing the exchange launch.

“It's software, so you never have enough time to do it,” Riley says. “[They're] going to have problems, but [they] need to launch this.”

Other issues

One challenge to opening health insurance exchanges is that networks that have never communicated with one another before will have to get on friendlier terms. The exchange websites have to interface with the IRS, state Medicaid systems and dozens of different insurance companies.

Then there's coordinating all the different databases required to determine eligibility for insurance subsidies and Medicaid.

For example, if someone's income qualifies him for Medicaid, software will divert him from the exchange to that specific system.

Consumers also have to determine if they're eligible for federal subsidies to pay for insurance. The exchange verifies incomes and citizenship, but income verification will have to go through the IRS and the Department of Homeland Security for citizenship check.

There will be millions of files passing information back and forth. Communicating between systems is key but exhaustive.

User experience

Then there's the user experience, which might not be as simple as most have been led to expect.

While some people might be able to easily sign up online, others with more complicated situations—say, when one spouse qualifies for Medicaid and the other one doesn't—might have to be handled manually.

But a lot of the issues with the exchanges will come down to trust and confusion, insiders warn. First off, people have an inherent distrust of technology. And a handful of consumers who don't regularly use websites now will be forced to go online to sign up for coverage. That can be a steep learning curve.

Industry experts also warn of potential scams and fraud that might hurt consumers who think they're logged onto their state's exchange.

“The unknowing public will be bombarded by scams,” Nelson says.

Scams could be amplified because Obamacare confusion is so high. Poll after poll confirms consumers remain unaware of the law and its details.

'A model in place'

Though some say it's an unprecedented IT challenge, Nelson doesn't agree.

“I liken it to the Medicare enrollment process,” she says. “The technology is there to support that. We've got a model in place.”

But other experts note there have been challenges in Medicare's online process. When Medicare's prescription drug program launched in 2006, for example, some seniors mistakenly got enrolled in several programs; others paid the wrong prices. Nelson admits the Medicare model is “painful” and “confusing” for many users.

Nelson says she's confident the technology can handle the open enrollment process—but that's also because she doesn't anticipate most Americans logging on at the same time.

“I think the technology model has been around to support it, and it will be capable of supporting the early attack because I don't think the early attack will be very significant,” Nelson says.

That's a viewpoint shared by Jim Sugden, Connect for Healt hColorado's small business marketplace manager.

He said earlier this summer that he doesn't expect people to flock to the exchange as soon as it opens in October.

“We are realists,” he said. “We think people will start shopping, but we know they are going to really think about what's best for them.”

Contingency plans

Meanwhile, state-run exchanges—and the partnership exchanges—should fare better than the federal-run exchanges.

That's Riley's prediction, at least.

“The majority of these states running their own exchanges have their own contingency plans,” he explains. “[State-based exchanges] have more skin in the game than anyone else.”

For example,Vermontofficials have said if something goes wrong with the web portal, they have a paper process as a contingency plan. From October to January, the state is planning to print out Vermonters' information and file hard copies with insurance companies—just in case.

Connecticut—which also is running its own exchange—is opening storefronts in seven cities in the state. AccessHealth CTwill plant itself in the neighborhoods of the state's biggest and poorest cities in an effort to reach the largest possible number of uninsured people.

That's going to help send the message to residents directly, state officials say.

Kathleen Tallarita,Access Health CT's public relations and outreach manager, says it's not part of a contingency plan, per se, but it's a method to make sure the state's residents have the ability and knowledge to enroll.

“We think it will be helpful for people to go into a store and actually talk to a broker or navigator [who will be at the storefront] and have them walk them through the process of enrolling rather than possibly being intimidated online,” Tallarita says. The plan also is intended to help those who don't have a computer.

It's the perfect plan, Riley adds: “If it's IT Armageddon, you can still enroll inConnecticutby going to these stores.”

Riley says he doubts the federal government has adequate contingency plans in every state.

“I predict [consumers] will still be able to enroll, but I just don't know if the majority of it will be seamless, real-time, online enrollment.”

Instead, Riley expects a lot of consumers will default to the mail, phone, in-person or storefront enrollments. But who is handling those operations remains unclear.

Riley says consumers should expect a “plethora of problems.”

But the real test is the contactors who are helping create the exchanges, along with HHS, to “immediately resolve those bugs and correct them.”

For example, if there “are six things wrong [with the exchange] and 45 days later, there are still problems with those six things, then we have a problem,” Riley says.

“But if there's six things identified, and in less than 24 hours they fix them, then there's light at the end of the tunnel.”