Obamacare Payment System to Insurers Changed in Setback

Photographer: Patrick T. Fallon/Bloomberg

The 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 coverage prices. Close

The rollout of the Patient Protection and Affordable Care Act has been marred by missed... Read More

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Photographer: Patrick T. Fallon/Bloomberg

The 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 coverage prices.

Parts of the Obamacare enrollment system used to pay insurers are being pushed back 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 send companies the federal subsidies used to help millions of Americans buy coverage because the online system won’t be ready as planned, said Aaron Albright, a spokesman for the Centers for Medicare & Medicaid Services. Insurers will estimate what they are owed rather than have the government calculate the bill.

The 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 coverage prices. 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 hasn’t been finished. Obama administration officials have said the troubled website will work for the vast majority of users by today.

“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 yesterday in a telephone interview.

‘Trued Up’

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 delay also won’t affect payments by insurers to health-care providers.

The online exchanges are the core of the health-law’s goal to extend medical coverage to most of the nation’s 48 million uninsured. The federal website covers 36 states while 14 states and Washington, D.C., created their own exchanges. Americans without insurance through their employer or a government program are required to buy a health plan by March 31.

The government’s original plans called for the federal system to automatically determine consumer subsidies and issue payments to insurers. 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 automatic payment system is ready, though CMS has no specific date for the fix, Albright said.

The estimated billings are expected to be close to the actual payments to insurers, according to the memo.

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.

To contact the reporter on this story: Alex Nussbaum in New York at anussbaum1@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

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