Report: Error rate for applications completed on ObamaCare exchanges is 10 percent

Jonathan Cohn puts on a brave face, but if HHS hit its target of 3.3 million enrollments by December 31st (which it won’t), we’d be talking about 300,000+ applications that needed some form of correction. As it is, they’re likely to make it roughly halfway towards that goal, which still means the number of erroneous applications will reach six figures. Some of the errors will be small, like typos. Some of them won’t be. Do they have the manpower to sort everything out between December 23rd, the deadline for applying for coverage, and January 1st, when the new coverage takes effect?

But the 834 problem is fixable and, according to multiple sources in the public and private sectors, it is being fixed. In fact, one administration official tells The New Republic that preliminary estimates, just now becoming available, suggest the error rate has fallen from one in four during October to one in ten now. And most of those are files insurers received with errors, as opposed to files insurers never received. Plenty of work remains—namely, completing repairs that reduce the error rate further and dealing with the flawed data insurers have already received. But the administration is working with insurers and contractors on both issues…

[Bob] Laszewski, appearing on Fox News this week, said the error rate on Monday was as high as it had been three weeks ago. But other sources have said the latest batches of 834s insurers are, in fact, cleaner. “The enrollment files continue to get better and the new process they put in place this week to deal with the back end issues is making a difference,” says Robert Zirkelbach, spokesman for America’s Health Insurance Plans. Bryce Williams, who is Managing Director of Exchange Solutions for Towers Watson, says “We are hearing reports from insurers that the quality of the 834s being sent from is getting better—for example, fewer cases of children showing up as spouses.” But, he adds, “there are still backend enrollment issues to be fixed.”

WaPo reported a few days ago that the enrollment records of fully one-third of the people who’ve signed up on contain some sort of error, but it’s unclear whether that means all errors or “834 errors” specifically. The 834 form, remember, is the data transmitted by the federal website to an insurance company once someone’s finished signing up. If key data is garbled (or, worse, missing), it could delay coverage. There’s lots of heavy breathing on Twitter as I write this about the significance of Cohn’s 10 percent figure, but the real must-read of the day on O-Care, I think, is Politico’s piece on glitches, including 834 glitches, affecting the state exchanges too. We’re still waiting on November data from the states but they have, almost certainly, enrolled many more people so far than the balky has. Their websites have, for the most part, been working better than the federal one has, leading people to believe that their enrollments have been properly processed by insurers. As it turns out, given the sheer volume of people who’ve signed up through the state exchanges, they may be generating more errors for insurers than has:

Insurers in Kentucky and New York, for example, say they’ve received flawed 834 enrollment forms from their local exchanges, though the extent of the errors is unclear. Washington state has already had to correct thousands of 834s with faulty information about federal tax credits.

Several state exchanges waited until late last month to even start sending application data to insurers, meaning potential errors haven’t had much time to surface…

“In general, the situation is the same for the state-run exchanges as it is for the federally facilitated exchanges,” said Tony Felts, a spokesman for Anthem Blue Cross and Blue Shield, one of Kentucky’s major insurers. “As far as the quality of the data that’s coming in, I can’t say that everything has been completely accurate. Nor has everything been completely inaccurate.” It’s too early, he added, to know if the problems have been solved…

Eileen Smith, spokeswoman for the trade association Minnesota Council of Health Plans, said insurers fear they’re getting the same kind of bad or missing data from the state exchange that is sending. Given that the first batch of 834s didn’t arrive from MNsure until last week, insurers are trying to quickly review the material. They’ve already discovered problems with child-only policies.

There are, in Politico’s words, “big problems with the files” in New York’s exchange according to an industry source, which is especially bad news for HHS given the size of the population. So here’s the situation facing insurers right now: Seventeen days out from the year-end deadline for enrollment, they’ve got four heavy logistical burdens weighing on them. One is sorting through data errors generated by the exchanges; two is processing the backlog of applications that they haven’t gotten to yet (25,000 in California alone); three is preparing, technologically and otherwise, for the flood of applications to come over the next two weeks as people without coverage try to sneak in under the wire; and four is the low-profile but important problem I flagged for you yesterday, the fact that lots and lots of people who’ve signed up surely haven’t made their first month’s premium payment yet. Those people will need to be contacted, and since we’re talking about revenue here, the companies might not want to rely on a mass e-mail alone. Phone calls will be made, which means even more manpower. If the industry can’t meet any one or more of these four challenges, there’ll be some degree of chaos next month as coverage goes, or rather doesn’t go, into effect. The only question is how extensive it’ll be.

Exit question: Assuming, safely, that insurers can’t cope with all of that before New Year’s Day, leaving some segment of people who’ve signed up in limbo, what will the stopgap measures look like? I’m thinking that, so long as you’re in their system somewhere, insurers will agree to cover you starting on January 1st even if they haven’t gotten your application straightened out or received your first payment yet. Uncle Sam will keep the revenue flowing. Easy peasy.