Obamacare’s Back End Nightmare

While the administration worked desperately to improve HealthCare.gov’s “front-end” consumer experience, the “back-end” administrative components (payment systems and enrollment application transfers) were put on the back burner. Today, critical system components remain unfinished – and the administration’s deadlines to fix them keep changing.

In mid-November 2013, testifying before the House Energy and Commerce Committee, CMS Deputy Chief Information Officer Henry Chao acknowledged that 30 to 40 percent of the IT systems needed to make HealthCare.gov work had not been built. This included financial management tools like accounting and insurance company payment systems. HealthCare.gov was supposed to calculate premium subsidy and cost-sharing allotments in real time, as people signed up for an insurance plan. The government subsidy would then be electronically sent directly to the insurer, not the patient, to help pay for the coverage.

Under extreme pressure, senior administration officials promised HealthCare.gov’s back end would soon be operational. In December 2013, Health and Human Services Secretary Kathleen Sebelius pledged it would launch mid-January. Behind the scenes, administration officials feared HealthCare.gov’s defective back-end payment systems spelled disaster for the nation’s insurance companies. HHS signed a no-bid contract warning that failure to deliver specific Financial Management Platform functions – such as enrollments, subsidies, cost sharing reductions, and insurer payment plans – “by mid-March 2014 will result in financial harm to the Government.” The HHS document goes on to say that “without a Financial Management Platform … the entire health care reform program is jeopardized.”

By March, CMS Administrator Marilyn Tavenner confessed HealthCare.gov’s financial management components remained unfinished. Moving the goalposts yet again, Tavenner said “they’ll be fully developed over the summer.” It comes as no surprise that the administration is still scrambling to build key infrastructure critical to make HealthCare.gov function.

Democrats claim that the health care law’s implementation is on track, but an updated Congressional Research Service analysis raises questions about the administration’s track record. The CRS memo, released on April 21, is the fourth in a series of reports reviewing the administration’s compliance with Obamacare’s statutory deadlines. CRS’s review cataloged the administration’s missed deadlines during the first three years of the health care law’s implementation. As of April 15, the administration had failed to meet a total of 44 out of 83 – 53 percent – of the law’s deadlines.

Health Care Headlines

CNN: Opinion: “Obamacare: Saying ‘it’s working’ doesn’t make it true” President Barack Obama needs to learn a simple lesson: Saying something doesn't make it true. Though the President has claimed victory touting 8 million “enrollments” under his health care law, Americans cannot and will not wipe their memories clear of the botched rollout and continual failings of Obamacare.

New York Times: “Not All Health Care Premiums Are Paid Up, House Panel Says” A House committee said Wednesday that only two-thirds of people signing up for private health insurance in the federal exchange had paid their premiums by April 15. Without payment, consumers will not have coverage.

Washington Times: “Price of fixing, upgrading Obamacare website rises to $121 million” Fixing the Obamacare website to get it ready to handle a second round of enrollments will cost the federal government $121 million, according to Accenture, the contractor hired to repair the glitchy website after the original contractor, CGI Federal, was fired in January.

Politico: “Behind the scenes, much of HealthCare.gov is still under construction” The Obamacare website may work for people buying insurance, but beneath the surface, HealthCare.gov is still missing massive, critical pieces – and the deadline for finishing them keeps slipping.

Washington Examiner: “Health care spending spikes at fastest rate since 1980 in first quarter of Obamacare” With millions of Americans gaining coverage through President Obama’s health care law, health care spending spiked by a staggering 9.9 percent in the first quarter of 2014 — the fastest rate since 1980 – according to data released Wednesday by the Bureau of Economic Analysis.