HHS is already spinning the launch of its federal health insurance exchange this OCT. rebranded them “market-places”—are a linchpin of the ACA that would allow uninsured Americans to assess and select health insurance plans. State decisions as to whether they should use the HHS portal or build their own; at least 14 states have wisely chosen to build their own systems.
The reason is plain old incompetence and arrogance, the former administrator of the Centers for Medicare and Medicaid Services CMS Donald Berwick had the responsibility of creating systems for the exchanges. Congress did not appropriate special funding for this initiative, and Berwirk was unwilling to shift adequate funds within CMS for this critical project. Berwick then failed to persuade HHS secretary Sebelius to spend one penny on this effort form her massive ACA discretionary fund.
Berwick also failed to bully SSA into paying for the entire system: he brushed aside the blatant illegality of that approach. They threw together an overly simplistic system without adequate privacy safeguards. The system lack of any substantial verification of the use would leave members of the public open to identity theft. CMS then tried to deflect attention form its shortcomings by falsely asserting that it had done so to satisfy White House directives about making electronic services user–friendly.
Unless delayed and fixed, inflict on the public the most widespread violation of the Privacy Act in our history. At the same time of our appeal no senior legal official at HHS had reviewed the legal issues raised by this feature of the ACA.
The Privacy Act is a general prohibition, subject to narrow exceptions, on disclosure of records between agencies or to the public.
The “routine use” exception allows disclosure when the use of a record is “for a purpose which is compatible with the purpose for which it is collected”. It is impossible to justify a “routine use” exception for a system knowingly built in a way that will permit disclosure of intimate health care data.
In this regard the administration is not only preparing to violate the law, it is also holding itself to a fare lower privacy standard than that to which it is trying to hold the private sector”.

Source—weekly standard—michael astrue


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