Insurers: Where are the reconciliation and payment systems?

While the White House returns to “sales mode” on ObamaCare, insurers are more worried about their delivery mode. With less than a month before the individual mandate begins, the back-end systems for still don’t work — or don’t exist at all.  Given the track record at HHS of declaring victory while systems collapse, their partners in the private sector are not sanguine about the immediate future:

Insurance companies are still waiting for key parts of to be built—and still having trouble with the parts that are in place.

Important pieces of the Obamacare site are still glitchy, or missing altogether. And the site’s botched rollout is hardly boosting confidence in the vital components that still need to be built, including the systems for processing payments to insurers and squaring away the details of who has enrolled in which plans.

Both systems are crucial to the insurance industry, which needs to collect premiums so it can pay out claims. And carriers are still waiting for the delayed process of reconciling their enrollment information with the federal government’s data. As the rest of struggles to get off the ground, people in and near the insurance industry are nervous about the delays and about how well those systems will work once they’re in place.

Guess who’s in charge of building those pieces?

Another cause for insurers’ anxiety: CGI Federal—the contractor that has come under fire for its work building the bulk of—is also in charge of building the payment and reconciliation systems.

Yes, the same people who couldn’t turn out a functioning web portal with a year’s head start, and who still can’t make the front end function to meet the expected demand, are in charge of providing the crucial back end to complete enrollments.  So far, insurers aren’t seeing any sign that this will get done, not for reconciliation or for subsidy payments. Instead, HHS is telling customers to do the reconciliation themselves by flooding their insurers with the phone calls that was supposed to avoid.

The payment systems are an even bigger deal.  Insurers will have to start paying providers from the premiums they receive starting on January 1, and those subsidies are a large portion of those premiums.  If they don’t get paid on time, they’ll have to run at a loss until CGI figures out how to create a computer system that transfers funds accurately … a task that every financial institution figured out decades ago.  Heck, your local bank knows how to do that with Automated Bill Pay.  If it takes more than a month to get subsidy payments in place, insurers could be looking at some serious red ink, especially with the flood of demand expected to be created with the ObamaCare structure. Providers will end up getting stiffed, which is going to make them less than enthusiastic about remaining in these networks, too.

With all of these problems, why is Barack Obama trying to push more people into the system with a new sales pitch, Allahpundit asked this morning:

The White House needs to cheer up Democrats more than it needs to protect Americans from its disaster, that’s why.