By Sharon Begley
NEW YORK (Reuters) - The District of Columbia's online health insurance exchange - one of 51 set up under President Barack Obama's healthcare reform law - will be unable to perform two key functions when it opens on October 1, exchange officials announced on Wednesday.
The District joins Colorado and Oregon on the list of "Obamacare" exchanges hobbled by problems with information technology (IT), contributing to expectations that Obama's signature domestic achievement will get off to a slow start when the exchanges go live next Tuesday.
The "DC Health Link" web-based marketplace, where residents of the nation's capital who do not have other coverage will be able to purchase policies, will lack the ability to calculate whether someone is eligible for Medicaid. It will also be unable to calculate the size of federal subsidies, if any, that a customer qualifies for.
Although numerous online tools created by nonprofit and other groups have offered subsidy calculators for months, "calculating subsidies for real is admittedly more complicated," said one expert. "For example, you have to make sure the family isn't eligible for Medicaid, and you have to collect more detail about their income. That said, I am frankly a little mystified why they couldn't get this right in time."
Under the law, someone whose income is less than four times the federal poverty level, or $45,960 for an individual and $110,280 for a family of five, can receive federal subsidies in the form of tax credits to defray the cost of monthly insurance premiums.
Subsidies are key to making the policies fit the budgets of many uninsured Americans, a primary goal of the 2010 Affordable Care Act. Without subsidies, sticker prices for an individual average $328 but can reach hundreds of dollars higher. But with them, according to the Department of Health and Human Services, an estimated 6.4 million people will be able to purchase policies for less than $100 per month.
Not being able to learn how much of a subsidy one qualifies for could therefore be a significant deterrent to applying for coverage.
"DC Health Link is not currently deploying the function that makes new Medicaid eligibility determinations and calculates tax credits," Mila Kofman, executive director of the DC Health Benefit Exchange Authority, said in a statement. The reason, she said, is "a high error rate discovered through extensive systems testing.
People who might qualify for Medicaid coverage or tax credits will be able to submit an online application for coverage if they are willing to do so without knowing what they'll be paying. Experts will determine their eligibility off-line and applicants will be notified in early November, Kofman said.
Her statement emphasized that DC Health Link "will open for business October 1" and said, "We are excited to announce that ... almost all functionality is operational for individual consumers." Only two sentences buried in the nearly 800-word statement mentioned the glitches.
D.C.'s setback is even more severe than other states'.
On Monday, employees running Connect for Health Colorado told board members that the exchange would not be able to calculate federal subsidies either, at least for the first few weeks.
Instead, Coloradoans who wish to buy a policy and learn their eligibility for subsidies will be directed to call customer service representatives, who will do the calculations manually.
Connect for Health Colorado was not "completely satisfied" with the accuracy of the tax credit calculations, said Ben Davis, an outside spokesman for the exchange. "There are 100,000 scenarios they want to test for" - combinations of income, family situation and other factors - "and it takes X amount of time. We just did not have enough time to test."
Colorado will therefore spend two more weeks testing the system "to make sure every possible scenario has been accounted for and providing an accurate response," Davis said.
Connect for Health Colorado will have 187 customer service representatives at its call centers throughout the enrollment period, which ends on March 31.
In another potential glitch, Oregon's exchange reported on Wednesday that its IT problems were causing information about policies that insurers plan to sell on Cover Oregon to appear incorrectly on a test site. As a result, crucial details such as deductibles are incorrect.
"We are in a validation process with our carriers," executive director Rocky King said.
State-based exchanges being run by the federal government reported similar display problems last month.
HHS spokeswoman Joanne Peters played down the IT snafus, saying in a statement that "there will be a marketplace open in every state and D.C. on October 1, where families can comparison shop for quality, affordable health coverage."
(Reporting by Sharon Begley, Lewis Krauskopf and David Morgan; Editing by Cynthia Osterman)