WASHINGTON Dec 3 President Barack Obama's
administration has found a short-term fix to pay insurance
companies for plans selected on HealthCare.gov, the
not-yet-complete government website used to shop for insurance
required under Obama's healthcare program.
The Centers for Medicare and Medicaid Services (CMS) has not
yet finished building the part of the website that would
transfer billions of dollars in subsidies for plan premiums and
cost-sharing payments to insurance companies.
It is part of a long technical to-do list that has so far
focused on fixing the errors and lag times in the part of the
website used by consumers.
The administration recently overhauled HealthCare.gov after
its botched launch two months ago. The fixes are now expected to
allow millions of Americans to shop for insurance.
The heathcare program faces a critical test to enroll
hundreds of thousands of people by Dec. 23, the deadline for
people who need insurance coverage starting on Jan. 1, 2014.
Julie Bataille, a spokeswoman for CMS, said the government
will make the payments to insurers for premium tax credits and
cost sharing on time.
"We are committed to making sure they get paid in January
and we will continue to work with them on that process," she
The administration is planning a "workaround" for payments,
said Daniel Durham, vice president for policy and regulatory
affairs at America's Health Insurance Plans.
Health plans will estimate how much they are owed, and
submit that estimate to the government. Once the system is
built, the government and insurers can reconcile the payments
made with the plan data to "true up" payments, he said.
"The intent is to make sure plans get paid on time, which is
a good thing," Durham told Reuters.
The fix puts an additional "burden" on insurance companies,
already taxed by having to double-check faulty enrollment data
from the HealthCare.gov system.
Now, companies need to quickly put together financial
management systems to make the payment estimates, so they can be
paid beginning in January, he said.
"They have to recognize that plans are already quite
stressed and introducing this at the last minute just adds
substantial burden for plans to deal with," Durham said.
Paying insurers on time and accurately is critical for the
long-term competitiveness of Obamacare marketplaces, said Kevin
Lucia, senior research fellow at Georgetown University's Health
"I'm pretty deeply concerned about this," Lucia said at a
forum organized by the university and law firm Arent Fox.
Some large insurance carriers could "cushion" delayed
payments for a short period of time, said Lucia, a former CMS
official. But that's not the case for a group of co-ops and
smaller insurance providers.
About two-dozen co-ops will start up with their first
customers on Jan. 1 and have said they are concerned about how
enrollment delays are affecting their finances during the first
Small insurers also have a lot at stake as these new
anticipated members are expected to make up a bigger portion of
their total revenue. The individual business is only a small
part of revenues at large insurers, which focus on
employer-based coverage and private Medicare.
"They cannot survive if they don't get paid. And even the
larger carriers, it can only go on for so long," Lucia said.
"The last thing we need is for a carrier, especially a large
carrier, to walk away from this."
(Editing by Christopher Wilson)