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Posted by on May 17, 2014 in Health, Politics | 7 comments

New Obamacare glitch: Federal health-care subsidies may be too high or too low for more than 1 million Americans

shutterstock_146319131 (1)A new Obamacare glitch is in the news and it means a)the administration still has a lotta tinkering to do, and, b)the Republicans will have an opening and will most defiinitely seize it. It’ll also add to the image of Obamacare as being something thought out but done by-the-seat-of-the pants:

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.

Republicans will point to the too highs and attack Obamacare as one more entitlement where the requirements are not even being verified.

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.

The phrase “not ready for prime time” may come to mind for some voters, even the many who are relieved Obamacare is in place.

So piles of unprocessed “proof” documents are sitting in a federal contractor’s Kentucky office, and the government continues to pay insurance subsidies that may be too generous or too meager. Administration officials do not yet know what proportion are overpayments or underpayments. Under current rules, people receiving unwarranted subsidies will be required to return the excess next year.

The inability to make certain the government is paying correct subsidies is a legacy of computer troubles that crippled last fall’s launch of and the initial months of the first sign-up period for insurance under the Affordable Care Act. Federal officials and contractors raced to correct most of the technical problems hindering consumers’ ability to choose a health plan. But behind the scenes, important aspects of the Web site remain defective — or simply unfinished.

White House officials recently have begun to focus on the magnitude of income discrepancies. Beyond their concerns regarding overpayments, members of the Obama administration are sensitive because they promised congressional Republicans during budget negotiations last year that a thorough income-verification system would be in place.

Meanwhile, there’s a whole group of Americans who may be falling through the cracks or who are facing problems with the bureaucracy…and their elected officials.