Obamacare

Obamacare's State-Based Insurance Exchanges Are Also Producing Enrollment Errors

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Healthcare.gov

Many of Obamacare's defenders have argued that the law works where there's political support to make it work, particularly in states like California, which chose to create its own health insurance exchange under the law. The experience in states like Maryland and Oregon, both of which were proactive in creating their own exchanges but had serious trouble anyway, complicates that narrative.

So does this report in today's Politico, which notes that the state based exchanges may be subject to some of the problems with 834 transmissions, which contain enrollment data, between the state exchanges and participating insurers—the same sorts of problems plaguing the federal exchange system. 

Insurers in Kentucky and New York, for example, say they've received flawed 834 enrollment forms from their local exchanges, though the extent of the errors is unclear. Washington state has already had to correct thousands of 834s with faulty information about federal tax credits.

Several state exchanges waited until late last month to even start sending application data to insurers, meaning potential errors haven't had much time to surface.

Right now it's too early to say how serious or widespread the problem is within the state-run insurance portals. But even in Kentucky, which is widely viewed as one of if not the best-run exchange in the country, there appear to be problems. 

"In general, the situation is the same for the state-run exchanges as it is for the federally facilitated exchanges," said Tony Felts, a spokesman for Anthem Blue Cross and Blue Shield, one of Kentucky's major insurers. "As far as the quality of the data that's coming in, I can't say that everything has been completely accurate. Nor has everything been completely inaccurate." It's too early, he added, to know if the problems have been solved.

The existence of these data transmission errors means that even in states where the exchanges are reportedly working fairly well, some consumers who believe that they have enrolled in exchange-based insurance may eventually find out that they are not enrolled, or that their enrollment data is incorrect. 

Are these problems fixable? Perhaps. An administration source tells The New Republic's Jonathan Cohn that the error rate within the federal exchange system was one in four in October, but has since been lowered to one in ten. That's an improvement, but it's still a huge problem, especially since sign-ups are happening at a much faster rate this month than they were in October. Certainly it's nothing for the administration, or the law's defenders, to be proud of. Imagine if, a few weeks prior to the October launch of the exchanges, it had become clear that the exchanges would incorrectly transmit 10 percent of applications, and in at least a few cases, not transmit any information at all. It would have been viewed as a significant problem. That it's now viewed as a sign of improvement only shows how poorly the initial launch went. 

Even if the system eventually ends up working perfectly for new enrollees, there were still be a large group of people whose information wasn't transferred accurately. Cohn's administration source guessed that the number of people in that category is somewhere in the tens of thousands. Depending on how long long the errors take to fix, how many sign-ups occur in the meantime, and how widespread the transmission errors are in the state-run exchanges, that number could turn out to be a lot higher.