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

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.