The Obamacare Insurance Exchange Train Is Already Coming Off The Rails

Wednesday, June 19, 2013

The Obamacare Insurance Exchange Train Is Already Coming Off The Rails

WASHINGTON, DC - MARCH 03: Health and Human S...

Health and Human Services Secretary Kathleen Sebelius. (Image credit: Getty Images via @daylife)

Sen. Max Baucus (D-Mont.) raised eyebrows across the country last month when he publicly fretted about an Obamacare “train wreck” as the Administration rushes to implement the many provisions of the law that take effect in 2014.
President Obama has attempted to assuage Sen. Baucus’s concerns, saying that his staff was “pushing very hard to make sure that we’re hitting all the deadlines.”

But an Obamacare train wreck isn’t a distant possibility. It’s actively happening. Delays, wasteful spending, and cost overruns have already popped up. And it’s becoming increasingly likely that the exchanges won’t be ready by October 1, when they’re supposed to open for enrollment. Mass confusion and excessive costs will result.
The federal government is set to operate exchanges in 27 states and to jointly run them with state officials in another seven. Seventeen states will create and administer exchanges on their own.
At least, that’s what’s supposed to happen. Gary Cohen, who’s in charge of the implementation of Obamacare’s exchanges, said in March that the federal government will likely end up running some of the exchanges in the 17 states that elected to set them up on their own because they won’t be ready in time.
Even the states the administration has paraded around as “pioneers” are having trouble creating government-run insurance marketplaces out of whole cloth. Connecticut, the first state approved to set up an exchange, is now struggling to get it up and running. Colorado is “stripping its opening-day goals to a minimum.”
Federal officials have struggled to come up with a comprehensible application form. Their first effort reached 15 pages. After a round of criticism, they came back with a form that’s three pages for individuals — and seven pages for families.
Henry Chao, a senior federal official working on the information technology that will run the exchanges, said in March that he was “pretty nervous” about meeting the October 1 deadline and was reduced to hoping that the exchanges don’t end up being “a Third World experience.”
And it’s not as if the feds and the states have been short on money. The Department of Health and Human Services (HHS) will have spent $4.4 billion on state exchange grants by the end of this year. That’s more than double what the Department said would be necessary just last year, despite the fact that fewer states than the feds anticipated agreed to establish their own exchanges.
The agency has also asked for $1.5 billion to help fund the exchanges it’s setting up in states that have refused to do so on their own next year. California is planning to use $673 million in federal money to deploy 21,000 people, known as “navigators,” to sign people up for its exchange, Covered California. Those folks get a bounty of $58 for every person they sign up — and $25 for every annual renewal.
HHS can’t even account for all the grant money it’s throwing at the states, since the money comes with little or no restrictions, guidelines, or accountability.

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