As originally conceived, President Obama’s health care law was supposed to create online marketplaces in every state, where individuals and small businesses could visit websites to purchase subsidized insurance just as they would purchase airline tickets on websites like Orbitz or Expedia.
On Friday, the Wall Street Journal reported:
Less than two weeks before the launch of insurance marketplaces created by the federal health care overhaul, the government's software can't reliably determine how much people need to pay for coverage, according to insurance executives and people familiar with the program.
Government officials and insurers were scrambling to iron out the pricing quirks quickly, according to sources, to avoid alienating the initial wave of consumers.
The news is just the latest in a series of revelations over the past few months suggesting that the exchanges won’t be ready for the spotlight when they’re slated to begin signing people up on Oct. 1.
The Obama administration has already had to delay income verification requirements for applicants for insurance on the exchanges, increasingly relying on individuals' own claims about their income - creating a huge opening for fraud. The Department of Health and Human Services' Inspector General has said that the federal government is months behind testing security systems for the exchanges. And Oregon has said its state's exchange website won't be ready on time, meaning that individuals will have to go through approved insurance brokers to register for coverage.
Obama administration officials and their allies insist these glitches are mere hiccups that will eventually be resolved, just like the confusion that beset the early days of the Medicare prescription drug plan. But increasingly, they are sounding like the Black Knight in “Monty Python's Holy Grail,” insisting that losing his arms is "just a flesh wound.”
There are several ways in which these mounting problems could plague Obamacare’s rollout. To start, for an exchange to be viable, it needs to have a critical mass of participants – which many experts have estimated is at least 100,000 people. And it also has to have enough young and healthy participants to offset the cost of insuring older and sicker beneficiaries, especially those with pre-existing conditions.
To the extent that enrollment becomes more difficult, it could mean that fewer people sign up for the exchanges. Even more troubling, it could mean that those the administration is most desperate to get on the exchanges – the young and healthy – are least likely to go through the hassle of signing up for insurance given their low medical costs.