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Back-Up Plan: Insurers Sign Up People Anyway

From the Washington Post:

White House relying more on insurance carriers to help fix HealthCare.gov

By Juliet Eilperin and Amy Goldstein | November 9, 2013

The White House is increasing its reliance on insurers by accepting their technical help in efforts to repair the problem-ridden online health insurance marketplace and prioritizing consumers’ ability to buy plans directly from the carriers.

The Obama administration’s broader cooperation with insurers is a tacit acknowledgment that the federal insurance exchange — fraught with software and hardware flaws that have frustrated many Americans trying to buy coverage — might not be working smoothly by the target date of Nov. 30, according to several health experts familiar with the administration’s thinking…

Things must be pretty bad, if the Obama administration is starting to bring in people who might know something about the insurance industry. Of course, now they will now be able to blame ‘Big Insurance’ for any future failures.

Insurers are eager to take on a larger role. But they, like consumers, have been stymied by the online system’s technical problems. During one step in enrolling customers — determining whether their income qualifies them for government help with paying for health plans — insurers must connect to part of the federal online system, and that part does not work…

Oddly enough, that is the only contribution from the federal government.

White House officials and insurance industry leaders have been talking about how to solve this problem, perhaps on a temporary basis, and insurers are insisting that they be allowed to keep any extra subsidy money they might accidentally be paid, said people familiar with these discussions…

In other words, they are considering a contingency plan where the insurance companies will just sign up people anyway. But the hitch is, the insurance companies want to be guaranteed they will get the subsidy that was promised by the website. The greedy bastards.

Starting this week, another administration official said, experts who write code for insurers will work directly with those writing code for HealthCare.gov, to address these problems on the back end of the system…

Why weren’t they there from the start? (Rhetorical question.)

Part of the discussions lately between insurers and administration officials has been about what to do if that function is not fixed soon. One idea circulated within the insurance industry would be for HHS to approve a method to estimate subsidies and give preliminary tax credits based on those estimates — with the accurate amount determined later, once the system works better.

According to several people familiar with these conversations, insurance industry leaders have said that they would insist on a guarantee that they would be compensated for any underpayments — and that they have asked to keep any overpayments. Said one health-care consultant who is knowledgeable about insurance exchanges and who has been in touch with administration officials: “The concern is: Who bears the risk?”

Again, who do these insurance companies think they are? They should be happy to go broke for the good of the cause.

This article was posted by Steve on Monday, November 11th, 2013. Comments are currently closed.

3 Responses to “Back-Up Plan: Insurers Sign Up People Anyway”

  1. GetBackJack says:

    When I sat for my Insurance broker’s license, the education necessary to even take the Test was extensive. The focus on Fiduciary Responsibility the majority of that one year course. It was a hard course of study and the State had licensed Instructors who put the fear of God into Applicants. The message was – You Will Not Screw With People. You Will Do The Right Thing.

    I will bet you the mortgage to the Ranch not a single person in Obama’s Task Force has any background in insurance.

  2. canary says:

    It appears to me that the federal government will have to bail out any Obama care exchanges or insurance companies

    GetBacKJack, was trying once again to get names of the companies of the 37 private exchanges and health insurance companies and no luck.

    But, this link is under the Affordable Care act according to Wikipedia brings up why there is a surge in Medicaid. Federal govt is now paying 100% of states part.


    Health insurance exchanges in the United States are intended to help insurers comply with consumer protection laws, compete in cost-efficient ways and expand insurance coverage to more people.

    Exchanges are not themselves insurers, so they do not bear risk themselves, but they do determine the insurance companies that are allowed to participate.

    An ideal exchange promotes insurance transparency and accountability, facilitates increased enrollment and delivery of subsidies, and helps spread risk to ensure that the costs associated with expensive medical treatments are shared more broadly across large groups of people rather than spread across just a few beneficiaries.

    All exchanges must be fully certified and operational by January 1, 2014, under federal law.[2]

    Enrollment in the marketplaces started on October 1, 2013 and will continue for six months.

    In participating states, Medicaid eligibility is expanded; all individuals with income up to 133% of the poverty line qualify for coverage, including adults without dependent children.[20][27]

    The law also provides for a 5% “income disregard”, making the effective income eligibility limit 138% of the poverty line.[28] States may choose to increase the income eligibility limit beyond this minimum requirement.[28]

    As written, the ACA withheld all Medicaid funding from states declining to participate in the expansion.

    However, the Supreme Court ruled in National Federation of Independent Business v. Sebelius (2012) that this withdrawal of funding was unconstitutionally coercive and that individual states had the right to opt out of the Medicaid expansion without losing pre-existing Medicaid funding from the federal government.

    For states that do expand Medicaid, the law provides that the federal government will pay for 100% of the expansion for the first three years, then gradually reduce its subsidy to 90% by 2020.

    The Patient Protection and Affordable Care Act eliminates lifetime and annual limits from plans in the individual Health Benefits Exchanges. This effectively eliminates the ceiling on financial risk for individuals in the individual exchanges.[32]

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