They’ve already wasted hundreds of millions of taxpayer dollars building a barely functional website though a no-bid contract to CGI. Now they have to spend hundreds of millions more
(Fox News) While the administration publicly expresses full confidence in its health care law, privately it fears one part of the system is so flawed it could bankrupt insurance companies and cripple ObamaCare itself.
“Week after week, month after month,” says John Goodman of the National Center for Policy Analysis, “the Obama administration kept telling us everything’s working fine, there’s no problem and then they turn on a dime and fire their contractor.”
To justify a no-bid contract with Accenture after firing CGI as the lead contractor, the administration released documents from the Department of Health and Human Services and the Center for Medicare and Medicaid Services that offered a rare glimpse of its worst fears, saying the problems with the website puts “the entire health insurance industry at risk” … “potentially leading to their default and disrupting continued services and coverage to consumers.”
Then it went even further, saying if the problems were not fixed by mid-March, “they will result in financial harm to the government.”
What they’re referring to is the “bank-end”, where the information consumers input is transmitted to the health insurance companies. All the information on the consumer and their insurance plan pick, along with whether they are eligible for subsidies and what those subsidies specifically are. Also, payment. Payment’s rather important, wouldn’t you think? Insurers are still receiving bad information, which leads to just guessing about subsidies
For now, though, officials concede they’re relying on estimates from the insurers.
“Here’s who we think we have, and here’s the subsidy we think they’re owed,” explains Jim Capretta of the Ethics and Public Policy Center. “Please send us a check from the treasury,” he says chuckling. “The honor system again.”
“There’s no way to effectively match policies and people,” says Holtz-Eakin.
That’s a recipe for disaster. Here’s Charles Krauthammer
“Right now the insurers are guessing at the subsidy, so all of this is on the honor system and it can be wildly off,” Krauthammer, a syndicated columnist and Fox News contributor said. “If they undershoot, the insurers are going to go bust. If they overshoot, the government is going to be stuck with a huge bill.”
“You’ve got a train wreck coming,” he said. “I think it’s going to come out slowly, it’s not all going to happen in one day, but I think they’re in deep trouble and the deadline is mid-March. If they don’t have this in place in mid-March, then there’s going to be- all hell’s going to break loose on this.”
What he’s referring to (full video available at the link) is no one really knowing what the real subsidies are. So, the insurers are using estimates. Guesses. Which could cost lots and lots of money to the insurers and/or the government. Larry Kocot, visiting fellow at the Brookings Institution, notes that “It’s like [CGI] built the façade of a house with nothing behind it.”