Obamacare Has Granted 1 Million Incorrect Health Insurance Subsidies

There are still huge technical
problems yet to be resolved with Obamacare.

For example, the vast majority of people who gained private
coverage through Obamacare are being subsidized through the law’s
system of health insurance tax credits. But about a million of
those subsidies are wrong, either too high or too low—it’s unclear
how many fall on which side—according
to The Washington Post.

The law’s subsidies are doled out based annual income, and
people who apply for coverage are responsible for submitting income
data in order to prove eligibility for the subsidies. The problem
is that a million or so people have entered incomes that differ
substantially from what the Internal Revenue Service (IRS) has on

Normally this would be reconciled through a follow-up auditing
process; when the system identifies people whose submitted incomes
don’t match IRS records, those people are asked to send in further
paperwork as proof. But only “a fraction” of those people have
responded, according to the Post. And even when they have
provided additional documentation, it doesn’t matter.

The federal computer system at the heart of the insurance
marketplace cannot match this proof with the application because
that capability has yet to be built, according to the three
individuals,” the report says.

So piles of unprocessed “proof” documents are sitting in a
federal contractor’s Kentucky office, and the government continues
to pay insurance subsidies that may be too generous or too

Fun fact: That contractor happens to be Serco, the data entry
company which has a $1.2 billion deal under the health law, and
which recently generated some negative attention when an anonymous
employee said that there was
almost no work to do
at the company’s processing

Another fun fact: The back end system that processes and
verifies the subsidies was originally supposed to be completed when
the exchanges opened last October. Then, when the exchanges
launched with so many problems, officials pushed back the opening
to early 2014 so they could concentrate on fixing the
consumer-facing end of the system.

It’s May, and the back end is still far from complete. Federal
health officials won’t provide reporters with timelines indicating
when they expect it to be complete. And insurers participating in
the law have been told to
be prepared to continue using the current, manual workaround system
until at least September

The Obama administration doesn’t really want to talk about any
of this, because they promised this wouldn’t be a problem. Or, as
the Post puts it, “members of the Obama administration are
sensitive because they promised congressional Republicans during
budget negotiations last year that a thorough income-verification
system would be in place.” So far, that obviously isn’t the

And it won’t be for at least several more months. Work will
proceed by hand, but income discrepancies won’t be up for review
until this summer. That’s because the administration has another
million applications with a different problem: questions
about the applicant’s citizenship. Those issues will be dealt with
first. Even that doesn’t fully capture the extent of the
application glitches. “Of the roughly 8 million Americans who
signed up for coverage this year under the health-care law,” the
Post says, “about 5.5 million are in the federal insurance
exchange. And according to the internal documents, more than half
of them — about 3 million people — have an application containing
at least one kind of inconsistency.” This isn’t a small problem,
and it likely won’t be going away soon. 

from Hit & Run http://ift.tt/TlWYHP

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