The Obamacare Sign-Up Scam - Reason.com

Even if there are no data transmission bugs, however, an enrollment still isn’t complete until the first month’s premium has been paid. This is not a minor concern. As Jon Kingsdale, who ran the Massachusetts health exchange and served as a consultant on Obamacare, wrote in The Washington Post last month, the most difficult administrative task for the Bay State’s exchange was tracking and collecting premiums. Under Obamacare, Kingsdale wrote, “premium billing and tracking will be even tougher” than it was in Massachusetts—in part because enrollees will in many cases only be paying part of the bill. The federal government will be paying the rest to insurers through the law’s subsidy system. But guess what? The part of the exchange system that is supposed to pay subsidies to insurers hasn’t been built yet. (The administration is instead relying on a workaround in which insurers estimate the payments they are owed.)

Nor are people who have signed up rushing to send in payments, according to early reports. Insurance industry consultants told ProPublica’s Charles Ornstein this week that so far, health plans have only collected payments from five to 15 percent of enrollees. That figure will surely rise as the deadlines (which vary between states) for payment approach. But in combination with Kingsdale’s warnings about the headaches associated with bill collection, it suggests that enrollment is likely to be hampered by lack of payment.

So here’s where we’re at: 364,682 people had signed up for private plans by November 30, which is about 842,000 short of the administration’s end-of-November projection. Information about tens of thousands of those 364,682 sign-ups has either been transmitted inaccurately or not at all to insurers. And so far only a small fraction of the sign-ups which have been correctly transferred to insurers have actually completed the process and paid. (The administration also says that another 803,077 people have enrolled in Medicaid.)

http://reason.com/archives/2013/12/12/the-obamacare-sign-up-scam