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Chris Wysocki
Caldwell, NJ

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Tuesday, 25 March 2014

Remember the missing Obamacare "back-end?" Yeah, HHS still hasn't built that

The website works. Sometimes. And the deadline for signing up is rapidly approaching. Again. But there's one big piece of Obamacare that's still missing.

Much emphasis has been placed on enrollment stats as the Affordable Care Act's inaugural open enrollment period comes to an end. But there's a key function on the federal exchange that remains inactive: the mechanism to reconcile payments between the government and insurance companies.

This "back-end mechanism" has been missing for the entirety of open enrollment period, which launched Oct. 1, meaning insurance companies have had to manually bill the government for subsidies and cost-sharing plans, a procedure that's being dubbed an administrative nightmare.

An insurance industry source close to the matter says insurance companies have been participating in a manual workaround over the last five months, which has been "an incredibly labor intensive process."

Right now, insurance companies are manually billing the Centers for Medicare and Medicaid Services for all subsidy and cost-sharing plans. If a person is eligible for a $250 subsidy toward a $450 plan, once he or she makes their $200 payment, the insurance company would continue to wait on the government to complete payment. The enrollee would remain insured all the while.

The check is in the mail!

Hey, they only had 3 years to get this right, so whaddaya expect?

CMS continues to work on the back-end system, although it is not yet clear when it will be up and running.

Nobody's been fired. No one is accountable. So, really, who cares when it will be up and running? There's no downside to the guys in the bureaucracy, all the pain falls on the big bad insurance companies.

And get this. The lack of a back-end is actually helpful to the Administration in the short term. How? Because it muddles the true enrollment numbers; there's no way to count how many people have actually paid their premiums. Even the folks who've paid may not have seen their subsidy applied to their account. The insurance company can't accurately bill them for the next month's premium.

But if you can't tell who's paid, how can you tell who's insured?

Everybody! Everybody is insured! Enrollees have to stay on the enrollment roll for 90 days, even if they don't pay. So presto! Full enrollment!

Now, I happen to know a thing or two about back-end systems for insurance companies. Especially billing and premium payments. First off, they're far and away the least sexy systems to work on. There's nothing particularly creative about them, there's no cool user interface, and each state has a zillion bizarre rules about what the bills can look like and how the verbiage needs to read.

Coding and maintaining the software is indeed mind-numbing.

It's also the two areas that are most visible to upper management. If money isn't coming in, they want to know why. If bills aren't going out, they really want to know why, because no bills going out equals no money coming in.

Believe me, when the billing cycle abends, I stay up all night to fix it.

So I gotta wonder why HHS didn't put a higher priority on this function for Obamacare. Insurance doesn't work if people aren't paying their premiums. They oughta know that. Then again....?

Your health care is in the very best of hands.

Posted at 18:37 by Chris Wysocki [/obamacare] Comments | Perm Link |
Technorati Tags: Obamacare HHS healthcare.gov CMS health-insurance subsidies | Tweet

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