Obamacare worry: Will feds pay consumer premiums on time?

Thousands of Connecticut residents buying insurance as part of the federal health law are expected to rely on the federal government to pay a portion of their premiums.

But the federal government’s problem-plagued rollout of the law has left some would-be customers worried about whether that share of their premiums will get paid on time.

Kevin Counihan, CEO of Connecticut’s health insurance exchange, said callers have asked, “If the federal website isn’t working, how do I know that the subsidies are going to get paid, and will I get [stuck] with the bill?”

The federal agency overseeing the exchanges insists that it’s committed to getting payments to insurers on behalf of consumers in January, when the first exchange insurance policies take effect.

But the portion of the system needed to process those payments is still being developed. The agency said it still needs to complete about 30 percent of “the build” for the accounting system that will be used by the health insurance exchanges.

The “back end tools” will be rolled out in the coming months, according to a statement from the Centers for Medicare and Medicaid Services, which oversees the exchanges.

The pieces of the system that aren’t finished “are not consumer facing and not essential until 2014,” the statement said. It noted that the agency prioritized items that were needed for customers to begin enrolling in coverage Oct. 1.

“Other functionality will come online over time,” the statement said. “This is a complex project with a short timeline -– and as such issues were prioritized to meet the October 1 launch date.”

Robert Zirkelbach, a spokesman for the health insurance industry trade group America’s Health Insurance Plans, said that people will be able to use their coverage if they pay their share of the premiums.

“As long as the consumer has paid their first month’s premium, then they can begin using their coverage when it begins in January,” he said.

Asked about what could happen if the federal government does not have the payment system in place after January, Zirkelach declined to speculate. “I think that’s all way too premature,” he said.

“Those systems still need to be built and tested, so there’s still a lot of work that needs to be done,” he said.

The Obama administration has faced intense criticism for the rollout of the enrollment system for new plans being sold as part of the health law. The website used by exchanges in 36 states, HealthCare.gov, had significant glitches when it launched Oct. 1. The administration has pledged that it will be fixed by the end of the month, barely two weeks before the deadline for people to sign up if they want coverage that begins Jan. 1.

Connecticut’s exchange, which doesn’t rely on the federal website, has operated relatively smoothly. But it sustained periods in which applications couldn’t be processed because of outages in the federal information system needed to verify applicants’ personal information. And state officials worry that the bad publicity surrounding the federally operated exchanges has kept people away from Connecticut’s state-run exchange.

When people who call the Access Health call center mention concerns about the federal government’s ability to pay subsidies, Counihan said the standard response is that the U.S. Department of Health and Human Services has provided assurances that they will be able to work out those issues directly with the insurance companies.

“This is between the health insurance companies and the feds…Don’t worry about it,” is the message, he said.

Counihan said it appeared that concerns about how the federal problems would affect Connecticut appear to be increasing. He said he wonders how it will affect enrollment.

As of Nov. 14, 7,092 people had signed up for private insurance plans sold through Access Health. Of those, 69 percent qualify for federal subsidies to help pay their premiums. About half of those who will get a subsidy will also get federal help paying for their deductibles and copayments.

In addition to the functions needed to pay the insurance companies, the federal government still needs to work on the portion of the system that will reconcile enrollment data between insurers and the exchanges to ensure that people are enrolled accurately and don’t get tax credits through more than one exchange. A portion that deals with a risk adjustment program that pays insurance companies that disproportionately attract higher-risk members also needs work. Those payments won’t be made until 2015.