Payments to Insurers Delayed in Latest Obamacare Setback

Friday, 29 Nov 2013 06:03 PM

 

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Parts of the Obamacare enrollment system used to pay insurers are being pushed back, potentially by several months, from January, in the latest technology delay for the president’s U.S. health-care overhaul.

The administration is setting up a temporary process to pay companies the federal subsidies needed to help millions of Americans buy coverage because the online system won’t be ready, said Aaron Albright, a spokesman for the Centers for Medicare and Medicaid Services. Insurers will have to estimate what they are owed rather than have the government calculate the bill.

Rollout of the Patient Protection and Affordable Care Act has been marred by missed deadlines for small businesses, broken promises to consumers and sticker shock over the pricing of coverage. Healthcare.gov, the main portal for consumers to shop for insurance plans, has been error-prone since its Oct. 1 debut and an administration official said this month that 30 percent to 40 percent of the online marketplace had yet to be completed.

“This temporary process, which is consistent with how payments have been made to issuers in the Medicare program, will ensure that issuers begin to get premium tax credits and cost- sharing subsidy payments on time, beginning in January,” Albright said in a telephone interview.

 

The change won’t affect enrollment for consumers, who have until Dec. 23 to choose a plan that takes effect Jan. 1, he said.

The government’s original plans called for the federal system to automatically determine subsidies and issue payments. Instead, the companies will submit estimates that will be “trued up” by the government at a later date, according to a CMS memo provided to Bloomberg News. The work-around for insurers will be in place until the spring, when the automatic payment system should be ready, Albright said.

Henry Chao, the deputy chief information officer for CMS, told a congressional committee Nov. 19 that 30 percent to 40 percent of the federal health exchange hadn’t been built, including back-end systems to transfer data to insurers and make payments to them.

© Copyright 2014 Bloomberg News. All rights reserved.

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