Insurance Blog

Finance Blogs » Insurance » Obamacare’s back-room struggles

Obamacare’s back-room struggles

By Jay MacDonald · Bankrate.com
Tuesday, July 15, 2014
Posted: 6 am ET

Remember those endlessly spinning clock icons that most of us encountered while trying to log on to the Obamacare online health insurance exchanges last fall?

It seems the situation behind the scenes was just as frustrating.

In fact, according to a pair of independent audit reports presented to Congress earlier this month by Health and Human Services Inspector General Daniel Levinson, the back-end system to verify basic application data and check the eligibility of those applying for subsidies was little short of a major-league muddle.

insurance-blog-application-on-healthcare-website

No double-checking of applicants' data

The reports found that the government lacked the "internal controls" to verify basic consumer data requested of online applicants, including:

  • Identity of telephone applicants
  • Social Security number
  • Citizenship
  • Eligibility to apply for insurance on an exchange
  • Eligibility for federal subsidies to make health insurance affordable

The shortcomings “may have limited the marketplaces' ability to prevent the use of inaccurate or fraudulent information," the reports say.

Because the automated eligibility system behind HealthCare.gov and other state exchanges was "not fully operational," the federal marketplace "was unable to resolve about 2.6 million of 2.9 million inconsistencies" in the fourth quarter of 2013, most of them involving citizenship, immigration status or income.

Levinson said that even when an applicant provided "appropriate documentation," the Obamacare back-end system was unable to resolve conflicts between federal records and information provided by applicants under penalty of perjury.

State exchanges fell short, too

Nor were the shortcomings restricted to HealthCare.gov, the federal site that serves as the default exchange for 36 states that did not to establish their own as provided for under the Affordable Care Act. Levinson said the electronic data services hub that links the federal and state exchanges had its share of problems that prevented states from verifying applications for subsidized coverage.

In Connecticut and California, two relatively smooth-running state exchanges that investigators also audited were found lacking as well. Connecticut did not always adequately verify the identity of its applicants, while California failed to match up applicants' reported citizenship with federal immigration records.

Aaron Albright, a spokesman for the Centers for Medicare and Medicaid Services, which oversees the exchanges for HHS, says 425,000 inconsistencies have been resolved. A report by the House Energy and Commerce Committee, based on information from a federal contractor, estimates that as many as 4 million discrepancies were detected by late May.

By the end of the inaugural Obamacare open enrollment period, 8 million Americans had chosen a health plan, 5.4 million through HealthCare.gov and with 85 percent eligible for federal subsidies.

Here's what those consumers saved on average with Obamacare health coverage.

Follow me on Twitter: @omnisaurus

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

«
»
Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
2 Comments
Edward Paxton
July 18, 2014 at 1:18 pm

Are any of us surprised the way Obamacare was presented to the U.S. public. We all have leared how the presenter does his business

Add a comment

(Comments may take 5-10 minutes to appear)