Nov. 21—Continued construction on the federal marketplace enrollment website does not yet allow the website to pay subsidies for qualifying applicants, federal officials said this week.

Henry Chao, deputy chief information officer and deputy director of information services for the Centers for Medicare & Medicaid Services (CMS), testified Nov. 19 that key parts of the federally operated enrollment site for 36 states have not yet been built. Chao told the Energy and Commerce Oversight Subcommittee that up to 40 percent of healthcare.gov remains to be built—primarily components for communicating with insurers.

Chao said several "back office" aspects of the website—the primary method for enrolling applicants for coverage under the Affordable Care Act (ACA)—remain under construction, including its system for sending federal subsidies to insurers providing the coverage.

The lack of subsidies would not keep unsubsidized applicants from receiving coverage directly from insurers, but could have a substantial impact on most applicants, according to health policy experts. Specifically, the Kaiser Family Foundation estimated this month that 60 percent of the 29 million expected to receive coverage through the marketplaces will qualify for subsidies.

The latest shortcoming of the federal enrollment website could obstruct increasing efforts by insurers to directly enroll applicants in their exchange plans using their own websites. The seriousness of the continuing problems was underscored by insurer advocates.

"If back-end challenges are not met, the process will be incomplete and consumers [won’t be able to] get coverage," Karen Ignagni, president and CEO of America's Health Insurance Plans, told a meeting of the National Association of Insurance Commissioners Thursday.

Robert Laszewski, a health insurance industry consultant, said on his blog that the problems revealed by Chao could cause major enrollment problems when an expected application surge occurs from Dec. 1 to Dec. 15. Applications must be submitted by Dec. 15 to be active by Jan. 1. Penalties for a lack of qualifying coverage begin Jan. 1.

Work Left to Complete

An official at the Centers for Medicare & Medicaid Services (CMS) told HFMA that the unbuilt subsidy payment portion would not be needed until January when policy payments would begin.

"CMS is absolutely committed to making payments on behalf of consumers in January," the official said.

Other delayed components included the payment processing system or user fees that issuers pay, the official said. The agency also is still developing the monthly process to reconcile enrollment data between insurance plan issuers and the federal exchange.

The federal and state-run marketplaces have authorized subsidies for 326,130, or 22 percent, of the 1,477,853 applicants found eligible for private insurance coverage from Oct. 1 to Nov. 2, the U.S. Department of Health and Human Services reported. Less than 107,000 of those had selected an insurance plan.

Chao also testified that portions of the federal website that the public interacts with have been generally upgraded. Julie Bataille, communications director for CMS, told reporters Thursday that the latest upgrades included fixes this week to allow for smoother transmission of applicants’ data to insurers, which is a preceding step to sending insurers the federal subsidy for their premiums.

The ACA's rules require the federal government to pay such subsidies directly to the insurers in most cases. Applicants qualifying for premium tax credits will pay only the unsubsidized portion of their premium.

Bataille said the federal website was on track to work smoothly for 80 percent of users by the end of November.


Rich Daly is a senior writer/editor, in HFMA’s Washington, D.C., office. Follow Rich on Twitter @rdalyhealthcare.

Publication Date: Thursday, November 21, 2013