Bloomberg has a must-read story this morning highlighting yet more faults with Obamacare’s exchanges. Specifically, the faults in the exchanges’ computer software aren’t just hitting consumers trying to shop for plans—they’re hitting insurers as well:
Insurers are getting faulty and incomplete data from the new U.S.-run health exchange, which may mean some Americans won’t be covered even after they sign up for an insurance plan.…The companies are receiving electronic files that can’t open or have so much missing information on new enrollees they’re unusable, the consultants said.
Some insurers have been forced to fix entries by hand, said Bob Laszewski, an insurance-industry consultant based in Arlington, Virginia.
“If we don’t see substantial improvement by the end of this week, then I would throw up the yellow flag,” said Dan Schuyler, a consultant advising states and insurers on the exchanges. “If we don’t see it in the next two to three weeks, it’s time for red flags. The concern is some people could get to Jan. 1, and not have coverage.”
Last week, the Administration claimed that heavy volume was the prime cause of the exchanges’ delays. But today’s Bloomberg report, as with other news reports over the weekend, all suggest bigger issues with the federal data hub and other elements of the IT infrastructure needed to support enrollment.
The Congressional Budget Office (CBO) has estimated that 7 million individuals would enroll in exchanges for 2014. If even one in 10 applications has to be adjusted manually because insurance carriers receive inaccurate data from the exchanges, that would mean 700,000 applications would have to be processed by hand between now and the end of open enrollment in March—a staggering possibility, and a feat few insurers will be able to achieve.
Little wonder that the Bloomberg story ends with one consultant saying that “the insurance industry is scared to death” of the problems the exchange glitches may cause them. What started off sounding like a dream—millions of new customers, and more than $1 trillion in insurance subsidies—may turn out to be a horrible nightmare for the insurance industry. It’s a fitting metaphor for the law’s effects on the American people as a whole.