Obamacare’s Unfinished Back-End Now Causing Serious Troubles

Democrats were counting on Obamacare to carry them through the midterms. It was supposed to be their signature issue, their grand addition to the Great Society vision begun by Lyndon B. Johnson. Of course we all know what happened. The website was a bungled mess, promise after promise was broken, and both health insurance and health care costs were soaring.

The myriad problems put the White House in scramble mode. They knew they needed a win, and bad. So they delayed huge parts of the bill that were either going to wreck the economy or be politically toxic. They sought to transition blame from themselves to insurance companies. And most importantly, at least for the political narrative, was that they devoted untold resources to make the website usable.

The problem was that it was a rush job and everyone knew it. The White House was solely focused on fixing the website’s front end, the part that users see. But the backend was an utter mess. As Henry Chao, deputy chief information officer at the Centers for Medicare and Medicaid Services testified, the website’s backend was left unfinished.

“I think it’s, uh, just an approximation, we’re probably sitting somewhere between 60 and 70 percent because we still have to build [the payment systems to make payments to insurers],” Chao said. “There’s the back office systems, the accounting systems, the payments systems, they still need to be done.”

The revelation was disconcerting if not all that surprising. And now we’re seeing the fallout from the rush. The Washington Post’s Amy Goldstein and Sandhya Somashekhar report:

The government may be paying incorrect subsidies to more than 1 million Americans for their health plans in the new federal insurance marketplace and has been unable so far to fix the errors, according to internal documents and three people familiar with the situation.

The problem means that potentially hundreds of thousands of people are receiving bigger subsidies than they deserve. They are part of a large group of Americans who listed incomes on their insurance applications that differ significantly — either too low or too high — from those on file with the Internal Revenue Service, documents show.

The government has identified these discrepancies but is stuck at the moment. Under federal rules, consumers are notified if there is a problem with their application and asked to upload or mail in pay stubs or other proof of their income. Only a fraction have done so, according to the documents. And, even when they have, 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.”

This could create a huge problem for millions of people who thought they were getting a great deal on the exchanges. Come tax time they could find that they’ve been receiving too much in insurance subsidies and will be billed for an overpayment – meaning they’ll have to return the excess money back to the federal government.

That could be an enormous financial hit for many unsuspecting Americans; and the worse part is that they have no idea and the federal government has no way to tell them. This raises several questions. First, if consumers were provided with accurate information on how much their insurance was truly going to cost would they have made the same choice? And second, why hasn’t anyone from the Obama Administration admitted the problem? Rick Moran writes for American Thinker:

Just when were they going to get around to telling us about this problem?

It’s incredible that the back end of the website still isn’t working because much of it hasn’t been built yet. It’s unconscionable that they would spend a billion dollars to push these policies and subsidies on Americans knowing full well that there was no way to verify income and get the correct amount of subsidy. And it’s ridiculous that sometime in the future, hundreds of thousands of Americans are going to be shocked that they owe the IRS hundreds and maybe thousands of dollars.

Too bad voters won’t learn how much they owe the federal government in time to vote in November.