Obamacare's Backend Still Missing, Deadline Uncertain

Healthcare.gov was supposed to do more than just sign people up for insurance. It was also supposed to manage subsidy payments to insurers on the back-end of the site. But with the first enrollment period closed, that part of the site is still months from being ready.

Kyle Cheney at Politico reports that deadline for the completion of the back-end continues to slip. He contacted HHS for an update on when they expect it to be ready, but they “refused” to give him an answer.

Last December, HHS Secretary Sebelius told Members of Congress that the back-end was “due to go into effect in mid-January.” But by that point, HHS was not only not done with the back-end, it was announcing a rush $91 million contract to find someone new to get the job done by mid-March.

The contracting document stated, “If this functionality is not complete by mid-March 2014, the Government could make erroneous payments to providers and insurers.” The document goes on to list four categories of financial error that could result. These included “erroneous estimates of budgeted and projected payments,” “inaccurate issuance of payments to health plans,” “inaccurate forecasting of Risk Adjustment, Reinsurance, and Risk Corridor,” and “failing to support the end of the year reconciliation with IRS.”

The new contractor, Accenture, was not able to complete the back-end by March. In fact, the government is still relying on an “interim” accounting process which Politico describes as “pretty much a spreadsheet and some informed estimates.” That process is expected to be in place until September.

One result of not having the back-end built is that the administration continues to be unable to say how many people have actually enrolled with any precision. Since October, the administration has been reporting the number of people who signed up, i.e. who selected a plan on the website. This culminated recently in the announcement of more than 8 million sign ups during the total enrollment period. Reporters frequently asked for the total number who had enrolled, i.e. those who had paid a premium, but the administration said it did not have that information because the back-end of the site was not built.

There is evidence that insurers are delivering monthly enrollment numbers back to HHS. These figures would then be plugged into the spreadsheets to tally the amount of subsidies the government owes to each insurer. However, it’s likely that these figures will be imprecise, meaning that at some point a final reconciliation will need to take place to balance the books. Politico quotes health industry expert Bob Laszewski saying, “We have the mother of all reconciliations coming.”