Short-term fix on ObamaCare subsidies: Pay now, check later

posted at 10:01 am on December 4, 2013 by Ed Morrissey

If this sounds familiar, it’s probably because HHS is going to use the same strategy for insurer subsidy payments that the IRS plans to use for paying tax credits. Both strategies are born out of necessity driven by incompetent systems development, too:

President Barack Obama’s administration has found a short-term fix to pay insurance companies for plans selected on HealthCare.gov, the not-yet-complete government website used to shop for insurance required under Obama’s healthcare program.

The Centers for Medicare and Medicaid Services (CMS) has not yet finished building the part of the website that would transfer billions of dollars in subsidies for plan premiums and cost-sharing payments to insurance companies. …

The administration is planning a “workaround” for payments, said Daniel Durham, vice president for policy and regulatory affairs at America’s Health Insurance Plans.

What will the “workaround” be? Well, the insurers will tell HHS what taxpayers owe them in subsidies, and, er … HHS will cut checks with no questions asked:

Health plans will estimate how much they are owed, and submit that estimate to the government. Once the system is built, the government and insurers can reconcile the payments made with the plan data to “true up” payments, he said.

“The intent is to make sure plans get paid on time, which is a good thing,” Durham told Reuters.

It’s only a “good thing” if they get paid what they’re actually owed.  That’s what insurers need to meet the demand for provider payments that will start on January 1. But don’t think that insurers will get off easy in this arrangement.  First, this is almost designed to produce massive confusion on what is really owed, and may tie up future subsidy payments for months as HHS disputes the claims and holds back payments, confusion and counter-claims created by the early payments and the fact that HHS can’t verify income levels independently at the moment.

But there’s another reason for the insurers to hate this.  HHS just gave them less than four weeks’ notice that they will have to build their own infrastructure to deal with HHS’ failure to build the back end on time:

The fix puts an additional “burden” on insurance companies, already taxed by having to double-check faulty enrollment data from the HealthCare.gov system.

Now, companies need to quickly put together financial management systems to make the payment estimates, so they can be paid beginning in January, he said.

In other words, this is incompetence on an expanding scale — and everyone’s paying for it except the incompetents. So far, anyway.


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Isn’t that how Amazon.com does it?

Akzed on December 4, 2013 at 10:04 AM

They’re using the honor system. What could possibly go wrong?

myiq2xu on December 4, 2013 at 10:04 AM

Quit sending in your taxes.

You’re on the honor system now.

If obama can, so can you!

Schadenfreude on December 4, 2013 at 10:04 AM

The first rule of holes is to dig a bigger hole, right?

NotCoach on December 4, 2013 at 10:05 AM

This came hours after Adolphobama declared defiance yesterday.

Schadenfreude, pure!

He ruins the land and the land goes shopping.

Schadenfreude on December 4, 2013 at 10:05 AM

So Obamacare can’t even calculate who actually gets subsidies and based on that insurers can submit what might be reimbursed and the insurers and ultimately the consumer will be left holding the bag?

Is that about right?

oldroy on December 4, 2013 at 10:05 AM

And no one will get fired for this

cmsinaz on December 4, 2013 at 10:06 AM

Isn’t that how Amazon.com does it?

Akzed on December 4, 2013 at 10:04 AM

Yes. But they do it with a drone fleet.

oldroy on December 4, 2013 at 10:06 AM

1. Snowden

2. Syria

3. obama’care’

The Idiobama unfolding in front of your very eyes.

The Thug in Chief is clinically certifiably physically/mentally ill.

It is what the media will report last.

I hope they all die in his azz, chocked on his chit.

It ain’t Beluga caviar, you morons. YOU NO longer deserve what the constitution grants you.

Schadenfreude on December 4, 2013 at 10:07 AM

What will the “workaround” be? Well, the insurers will tell HHS what taxpayers owe them in subsidies, and, er … HHS will cut checks with no questions asked

I know the law has hundreds if not thousands of instances of “the Secretary of HHS shall decide” written in it, but does the Obama regime seriously have the right to just cut a blank check like this to the insurers? And who exactly is in charge of ensuring there’s no fraud perpetrated on the taxpayers? This same corrupt regime that’s mired in too many scandals to keep track of?

Doughboy on December 4, 2013 at 10:07 AM

“The difference is this time you got me.”-obozo

Flange on December 4, 2013 at 10:08 AM

Hey, Insurance Companies… those are fleas crawling all over your body. You also might want to get checked for STDs.

mankai on December 4, 2013 at 10:08 AM

This is truly how a banana republic operates. What, me worry? Generalissimo Obama is in charge!

TarheelBen on December 4, 2013 at 10:08 AM

Is Boehner still at the 19th hole of the golf course or did he finally decide just not to come to work anymore since he does nothing?

albill on December 4, 2013 at 10:08 AM

May every singe ins. company which stands with obama go directly to Hell with him. I hope you all go under, to a T.

Schadenfreude on December 4, 2013 at 10:09 AM

What I can’t figure out is how he gets away with this, without going to Congress and asking for an appropriation? There has to be someone in this Congress willing to say, “NO” or as Sarah Palin would say, “Not no, but hell no!!!”

bflat879 on December 4, 2013 at 10:09 AM

Schadenfreude on December 4, 2013 at 10:07 AM

Do I still get my Obamaphone and EBT card?

/LIV

mankai on December 4, 2013 at 10:09 AM

Do NOT comply.

Be a free ‘merican, for God’s sake!

Schadenfreude on December 4, 2013 at 10:09 AM

Is Boehner still at the 19th hole of the golf course or did he finally decide just not to come to work anymore since he does nothing?

albill on December 4, 2013 at 10:08 AM

Be careful. You wouldn’t want to hurt his feelings.

oldroy on December 4, 2013 at 10:10 AM

Where the hell are the Congressional Republicans throwing a flag and calling foul on this crap? Seriously, at what point do the surrender weasels recognize that Ted Cruz is not the enemy? At what point do they recognize they were idiots for caving on the shutdown when they gave the Dems all they wanted while muttering crap about living to fight another day.

Well, this is another day. This is a hill worth taking. Where oh where are the surrender weasels now?

Happy Nomad on December 4, 2013 at 10:10 AM

I’m sending in my $5,000,000 subsidy invoice today…hopefully will have my check by Christmas…

PatriotRider on December 4, 2013 at 10:11 AM

Do I still get my Obamaphone and EBT card?

/LIV

mankai on December 4, 2013 at 10:09 AM

Of course, from you LIV preezie.

So they think he knew.

And deliberately misled.

They think he knowingly quelled people’s fears when he knew they had every reason to be afraid.

Which makes him just another dishonest pol, just another guy hiding in the deliberately obscure paragraph on page 1,037 of the omnibus comprehensive reform bill.

He has taken himself down, lowered his own stature.

Commentators like to decry low-information voters—the stupid are picking our leaders. I think the real problem is low-information leaders. They have so little experience of life and have so much faith in magic—in media, in words—that they don’t understand people will get angry at you when you mislead them, and never see you the same way again.

Poor scumhag Peggy. I hope she suffocate in his crotch.

Schadenfreude on December 4, 2013 at 10:12 AM

she suffocates

Schadenfreude on December 4, 2013 at 10:12 AM

Issa is probably threatening to investigate as soon as he hides all the stuff he never did with his other Congressional investigations.

If you want a Congressional Investigation buried and forgotten, then Issa is your Congressman.

Crooks and liars in the White House + a media in support of the crooks and liars + wimp-ass, loser Republicans in Congress means total bad news for US taxpayers and the institution of the US government.

albill on December 4, 2013 at 10:12 AM

May every singe ins. company which stands with obama go directly to Hell with him. I hope you all go under, to a T.

Schadenfreude on December 4, 2013 at 10:09 AM

I’d add AARP and the unions to that “Burn in Hell” list.

Happy Nomad on December 4, 2013 at 10:12 AM

The stupid Rs should run on “we need a supermajority to stop this unlawful land-wrecker bef. 2017, when it’s way too late”.

Alas, take this to the bank – if Boehner passes amnesty, especially by putting up the vote via calendar shenanigans, Pelosi will right have earned the hammer back for Jan. 2015.

Mark this down. She will deserve to be Speaker, in full and the GOP will deserve to go to Hell.

Schadenfreude on December 4, 2013 at 10:14 AM

I finally have to admit it. Obama’s strategy is brilliant. He keeps nuking the fridge over and over, and the sane part of the country is about to drop from outrage exhaustion. I know I can barely muster a WTF for this latest example.

ElectricPhase on December 4, 2013 at 10:15 AM

How long does the audit take to get back to the consumer who signed up but did not know their premium / did not pay b/c no payment mechanism (Even after subsidy). They never paid the Gov. but Gov. paid Ins. 6 months / 1 Year in back premiums….now your hunted down by IRS. FUBAR by SCOAMF.

federalist45 on December 4, 2013 at 10:15 AM

I’d add AARP and the unions to that “Burn in Hell” list.

Happy Nomad on December 4, 2013 at 10:12 AM

Indeed, and all the doctors and medical device companies which stood with this disastrous oaf of the land. May they all burn slowly/painfully, with NO exemptions.

Schadenfreude on December 4, 2013 at 10:15 AM

First, this is almost designed to produce massive confusion on what is really owed, and may tie up future subsidy payments for months as HHS disputes the claims and holds back payments, confusion and counter-claims created by the early payments and the fact that HHS can’t verify income levels independently at the moment.

I have been fighting Defense Finance and Accounting for 2 months to get a travel claim paid properly. They have shown no absence of ingenuity when it comes to rejecting parts of the claim. Good luck, insurance companies.

tdarrington on December 4, 2013 at 10:16 AM

I’m going to estimate my taxes and we can true it all up later, you IRS bastiges will simply have to trust me.

When even the likes of Robert Mugabe are saying “Wow, those people over there in the U.S. are corrupt” you know you have problems.

Bishop on December 4, 2013 at 10:17 AM

May all the capos who voted for the nations travesty go under in 2014.

Play this, over and over. There is one for each of them.

She is the symbol, however, and she also sounds like Hillary on dope.

Schadenfreude on December 4, 2013 at 10:17 AM

Meanwhile over on dailykook and bluffington this will be played as: “now the whole system is complete!!”

oldroy on December 4, 2013 at 10:17 AM

These thugs make the moron of Venezuela appear straight.

Schadenfreude on December 4, 2013 at 10:19 AM

Meanwhile Karzai just dumped on obama and Rice.

Schadenfreude on December 4, 2013 at 10:20 AM

I finally have to admit it. Obama’s strategy is brilliant. He keeps nuking the fridge over and over, and the sane part of the country is about to drop from outrage exhaustion. I know I can barely muster a WTF for this latest example.

ElectricPhase on December 4, 2013 at 10:15 AM

Then you have Issa who seems to drop investigations when he is stonewalled by the admin. All bark…

I just want to close my eyes, hang on and pray we make it to ’16.

tdarrington on December 4, 2013 at 10:21 AM

….what a bunch of stupidAsses!

KOOLAID2 on December 4, 2013 at 10:23 AM

Imagine if it ever did get “trued up” correctly, and you receive a bill from the feds for ten grand to be paid immediately.

The GOP is being given a silver platter heaped with gold, topped with gemstones, and with a solid platinum serving spoon laying on the side, but of course Bonesmoker and his slimy sidekick CanHead are busy trying to figure out how many illegals should be included in an amnesty instead.

Bishop on December 4, 2013 at 10:23 AM

Zimbabwe has a better run economy!

GarandFan on December 4, 2013 at 10:23 AM

anarchists

forest on December 4, 2013 at 10:26 AM

The GOP is being given a silver platter heaped with gold, topped with gemstones, and with a solid platinum serving spoon laying on the side, but of course Bonesmoker and his slimy sidekick CanHead are busy trying to figure out how many illegals should be included in an amnesty instead.

Bishop on December 4, 2013 at 10:23 AM

You seem stressed about this. Calm down. It’s just your country, your money, and your way of life being flushed down the toilet. Relax.

oldroy on December 4, 2013 at 10:26 AM

Where the hell are the Congressional Republicans throwing a flag and calling foul on this crap? Seriously, at what point do the surrender weasels recognize that Ted Cruz is not the enemy? At what point do they recognize they were idiots for caving on the shutdown when they gave the Dems all they wanted while muttering crap about living to fight another day.

Well, this is another day. This is a hill worth taking. Where oh where are the surrender weasels now?

Happy Nomad on December 4, 2013 at 10:10 AM

The problem is they really only have 2 options if they want to put a stop to this. They can either threaten to shut down the government which we know ain’t happening. GOP leaders like McConnell have publicly pledged to never allow another shutdown on their watch. Or the other alternative is to draw up articles of impeachment. I’d wager there’s even less of a chance of that happening than another shutdown.

I get the GOP’s strategery of sitting back and letting the entire law collapse upon itself. Which is fine except that if in the process of sitting back, they allow Obama to pull a Palpatine and do whatever the hell he pleases with no regard to the law or Constitution, then they’re setting an extremely dangerous precedent going forward. Especially if the Dems lose the Senate next year. Can you imagine how much worse Obama will be if he throws caution completely to the wind and goes full dictator in his last 2 years?

Doughboy on December 4, 2013 at 10:27 AM

I’m from the government, and I’m here to help????
http://www.nationalreview.com/corner/365399/big-government-programs-go-obamacare-works-peter-kirsanow

onlineanalyst on December 4, 2013 at 10:27 AM

albill on December 4, 2013 at 10:12 AM

At this point all the establishment Republicans care about is trying to build up some political capital with the base with a few sound bites. Their real efforts on pushing through the next comprehensive legislation are taking place behind the scenes.

Wigglesworth on December 4, 2013 at 10:28 AM

The real travesty still remains, and ultimately comes back to, John Roberts. Disgraceful and shameful in the annals of Amerucan history, and we will pay a price for decades.

Nothing good will happen until the courts slap this lawless Administration down, and I don’t know, on all these fronts, who might have standing after January 1, 2014; and whether the Supremes will ever hear any litigation in a timely manner.

We now know that if this goes through the DC Circuit, Obama will get his way, and then the Supremes will refuse any appeal.

matthew8787 on December 4, 2013 at 10:28 AM

And remember, every dollar the administration makes them pay in administrative costs is potentially a dollar (that they won’t have) to pay back to members of the plan.

This was a well-constructed failure.

If they muck around enough, they could bankrupt half the insurance companies before the volunteer propaganda corps can notify the lofos that we have to switch to single payer just cos.

Axeman on December 4, 2013 at 10:30 AM

At this point all the establishment Republicans care about is trying to build up some political capital with the base with a few sound bites. Their real efforts on pushing through the next comprehensive legislation are taking place behind the scenes.

Wigglesworth on December 4, 2013 at 10:28 AM

Well, sure. We need the economic boost that highly skilled $15 per hour fast food workers will provide. Of course, you will need to speak a second language and have to pay $12 for a burger, but there will be gobs of jobs.

oldroy on December 4, 2013 at 10:30 AM

..I know it’s fun to dribble this thing out, but Weasel Zippers is reporting from the WashEx that the four OCARE examples President Stool Sample cited yesterday DID NOT get their health care through the Healthcare.gov web site.

“If any of those people were with Obama on stage, the president didn’t say. It’s also worth noting that of the four examples cited during the event, two were young people whose medical treatment was covered by the up-til-age-26 provision of Obamacare, one was a woman who benefited from the abolition of lifetime caps, and one was a doctor who advocates more preventive care. None had purchased affordable coverage through healthcare.gov.”

The War Planner on December 4, 2013 at 10:31 AM

The very ins. companies he demonized in ’08 are now to be trusted by O’blamer? He truly is super-sizing his hypocrisy, is he not…

hillsoftx on December 4, 2013 at 10:34 AM

You seem stressed about this. Calm down. It’s just your country, your money, and your way of life being flushed down the toilet. Relax.

oldroy on December 4, 2013 at 10:26 AM

You know, that’s a good point, I’m going to relax and think about how cool it is that Minneapolis schools now have gender-neutral bathrooms.

Bishop on December 4, 2013 at 10:34 AM

You know, that’s a good point, I’m going to relax and think about how cool it is that Minneapolis schools now have gender-neutral bathrooms.

Bishop on December 4, 2013 at 10:34 AM

Geez. Sounds like you have other issues. Maybe you need to go split some firewood to work of some of the…..tension.

oldroy on December 4, 2013 at 10:38 AM

This is the result of an incompetent president. The rest naturally followed.

Philly on December 4, 2013 at 10:40 AM

May every singe ins. company which stands with obama go directly to Hell with him. I hope you all go under, to a T.

Schadenfreude on December 4, 2013 at 10:09 AM

Anybody have the full list of this tribe of Judas’? These folks will now have their hands directly in the treasury. It shouldn’t take long for that impact to be felt.

DanMan on December 4, 2013 at 10:42 AM

Short Term = At least till the 2016 election…

…and, btw, payouts will be higher for those companies who make generous political contributions to the “right” folks.

Deafdog on December 4, 2013 at 10:47 AM

So what happens if the one of the carriers gives someone a subsidy estimate that’s too high?

Does the insurance company have to eat the cost or will HHS/IRS/whoever just ignore it?

Do I suddenly get a bill from the insurance company for the discrepancy if it’s the insurance company who calculated wrong?

Does it matter whether the insurance company simply screwed up vs. me intentionally giving them incorrect information?

I don’t really think that anyone has thought this through….

If I were running an insurance company right now, I’d be heading for the fire exit as fast as I can…

PetecminMd on December 4, 2013 at 10:50 AM

Can you imagine how much worse Obama will be if he throws caution completely to the wind and goes full dictator in his last 2 years?

Doughboy on December 4, 2013 at 10:27 AM

We’ve already passed that point. What scares me is November and December next year if the rats lose the Senate and the GOP keeps the House. The looting will be worse than a Louisiana Wal-mart during an EBT system failure.

Happy Nomad on December 4, 2013 at 10:50 AM

The looting will be worse than a Louisiana Wal-mart during an EBT system failure.

Happy Nomad on December 4, 2013 at 10:50 AM

That one is going on my list of great metaphors.

oldroy on December 4, 2013 at 10:53 AM

Good things insurance companies are so loosie goosie about premiums and all.

Akzed on December 4, 2013 at 10:57 AM

To circumvent the broken transfer process, the Obama administration agreed Friday to let states use an incomplete set of data — known as a “flat file” — to enroll people in Medicaid, even though those files lack critical information that states normally use to verify eligibility.

Another Adolfobama clusterfark.

Schadenfreude on December 4, 2013 at 11:00 AM

Insurance companies, one of the biggest thugs in the land, are now in charge of the ‘honor system’ of Adolfobama.

Imagine how big Michelle’s hips pockets will get this time!

These two clowns will be billionaire crooks, forever, not to be touched due to hue alone.

MLK died for nothing.

It is the ultimate form of racism to expect less of the first half-black preezie, who is a thug in chief.

Schadenfreude on December 4, 2013 at 11:03 AM

“White House will highlight a different Obamacare benefit
every day until 12/23 deadline to sign up.”

X-mas, ‘merica, circa 2013 – Adolfobama is in your life.

Schadenfreude on December 4, 2013 at 11:05 AM

Perhaps I am overly optimistic but by pretending to focus on immigration the Pubs can avoid giving the MSM an issue to focus on while simultaneously letting Obamacare burn without having the MSM blaming them for not “fixing it” (since they are so busy focusing on immigration). Why pretending? Because they are going to adjourn this year without really doing anything, and then in January when they return guess what is on the top of the queue? The budget. Not immigration. It will be budget budget budget and the fight over sequestration and whether or not there is another government shutdown.

SunSword on December 4, 2013 at 11:05 AM

its been years since I looked into it so I may be way off base, but aren’t there RICO laws that make this illegal?
and iirc there are medicaid regulations that make it illegal to do this for that, yet they can do it for this ??

dmacleo on December 4, 2013 at 11:06 AM

Honest to Pete, we taxpaying, productive members of We the People outnumber these government clods who are not serving us. Instead they are serving themselves and parasites draining our funds and our morale. Perhaps it is time to “Go Galt” and stop feeding this beast.

onlineanalyst on December 4, 2013 at 11:06 AM

Amerika’s new leisure class

Schadenfreude on December 4, 2013 at 11:09 AM

The fix puts an additional “burden” on insurance companies, already taxed by having to double-check faulty enrollment data from the HealthCare.gov system.

WTF did we spend all that money on again? This is f-ing insane!

The website allows you to see plans and their cost, that’s it. To find out your network and doctor, you have to go to the insurers site. So all they did was provide a link to some other site for $600 million?

Hey … Obozo … bite me!

Patriot Vet on December 4, 2013 at 11:37 AM

Let’s say I ask for too small of a subsidy, does the government pay me back what I am owed at some later date with interest? Fat chance, I’d say.

Or what if I am paid too much. I have to pay the government. Now, do I also have to pay interest PLUS a penalty for late payment? And if I refuse to pay such a penalty and the interest on the grounds that the government never established the actual amount, on what basis could they compel such a payment from me?

How on Earth can you make such a system work?

PackerBronco on December 4, 2013 at 11:50 AM

If I didn’t know better, I’d say they’re just making this $hit up as they go along.

*gag*

BigWyo on December 4, 2013 at 11:51 AM

Sigh. Our government is being run like a church group taken over by ravers. All that matters is the par-tay! Forget about responsibilities. Live in the NOW. And in the now we have to just have fun.

Hopefully the church will wake up and provide a little biblical church discipline to the apostates.

Sterling Holobyte on December 4, 2013 at 11:55 AM

These are the same insurance companies that the left loves to demonize as money-grubbing, heartless, b*&^%$#s. These are the same insurance companies that, deep down, the left wants to destroy and replace with a single-payer, government-payer system.

Now, they are angels who can be trusted to work on the honor system, and what fine fellows they are!

HakerA on December 4, 2013 at 11:57 AM

Obama will throw as much money as he has to after this mess (who is going to stop him?). Obamacare is too big to fail. This will be such an ongoing drain on the taxpayers that we will all soon be clamoring for single-payer.

neuquenguy on December 4, 2013 at 12:02 PM

“It will be of little avail to the people that the laws are made by men of their own choice if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood.” -James Madison

Akzed on December 4, 2013 at 12:25 PM

Short-term fix on ObamaCare subsidies: Pay now, check later

And then we will get nice headlines in a year or two about how the government is aggressively prosecuting fraud by greedy insurance companies that overestimated the subsidy to insurance customers/taxpayers, thereby defrauding the government.

Any insurance company not run by morons will refuse to “estimate” subsidies without a guarantee that they will not be accused of fraud if those estimates are wrong.

So what will probably happen is that the White House will announce this, insurance companies will look at the risk and decline to make estimates, and the Democrats will once again demonize the insurance companies.

There Goes the Neighborhood on December 4, 2013 at 12:29 PM

Can you imagine how much worse Obama will be if he throws caution completely to the wind and goes full dictator in his last 2 years?
Doughboy on December 4, 2013 at 10:27 AM

There’s certainly nothing stopping him.

Why do any of you think either the 2014 or 2016 elections will make a difference? Republican leadership won’t repeal Obamacare. They’ve even said so, initially. Just because they have softened that position, their actions provide no evidence of a real change.
Republican leadership WILL pass Amnesty for illegals. Having a majority or super-majority will only enable realizing that dream.
Only a concerted effort at building local, conservative political machines at the precinct level, along with influencing our educational and media systems, over a long period (think 2 generations) will make a real difference.
That’s how the Socialists took over.

Perfesser on December 4, 2013 at 1:41 PM

What’s the difference? Was the ACA ever anything more than a blank check for Obama, drawn at the Bank of US Taxpyers, anyway?

Oxymoron on December 4, 2013 at 1:58 PM

Here is a new turn for ACA. Looks like cancelation for auto insurance are on the way. At least for the medical coverage parts that do not meet the requirements of Obamacare.

Will this be an opertunity for a new FIX.

jpcpt03 on December 4, 2013 at 3:00 PM

Here is a new turn for ACA. Looks like cancelation for auto insurance are on the way. At least for the medical coverage parts that do not meet the requirements of Obamacare.

Will this be an opertunity for a new FIX.

jpcpt03 on December 4, 2013 at 3:00 PM

Yes. I’ve been watching for anything on what the piece of crap Obamacare is going to do to car insurance and home insurance packages.

I guarantee it won’t be good.

slickwillie2001 on December 4, 2013 at 4:24 PM