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Kaiser Health News
New online insurance markets set to begin selling health coverage to consumers next October may be hampered by delays in launching a key computer program, according to state consultants and insurance regulators.
State regulators learned late last week that an electronic system most insurers will use to submit their policies for state and federal approvals won’t be ready for testing next month, as originally planned. The lag is being blamed on the wait for several regulations from the Obama administration, which are needed to update the software.
The slowdown “creates another three-month delay,” said Dan Schuyler, a director at Leavitt Partners, a consulting firm working with states to set up the markets, called exchanges. “They’re not going to be ready.”
Others believe the delay, while not necessarily critical, will further squeeze insurance regulators and insurers, who still have much work to complete before next fall when enrollment is slated to start in the exchanges, a critical part of the health law. Enrollment is set to begin Oct. 1 for policies that go into effect Jan. 1, 2014.
An estimated 9 million individuals are expected to use the markets that first year to shop for coverage and find out if they are eligible for government subsidies.
But depending on how long the update takes, “it could make it difficult to have a robust and competitive marketplace on the exchanges,” said Kim Holland, a former Oklahoma insurance commissioner who is now executive director of state affairs for the Blue Cross and Blue Shield Association.
The Obama administration has maintained that planning is moving forward on schedule and that the exchanges will open on time.
The difficulty in updating the System for Electronic Rate and Form Filing, known as SERFF, is the latest obstacle in the planning for the online marketplaces. Many states stalled preparations as a result of the controversy surrounding the law, with opponents encouraging them to wait to see who won the election first.
Even some supporters are arguing to postpone the opening of the marketplaces to give states and insurers more time.
“If I could wave a magic wand and change (the start) from 2014 to 2015, I would,” said Sandy Praeger, Kansas’ elected insurance commissioner, whose plan for a state partnership exchange was rejected by Gov. Sam Brownback. “But I don’t know if [federal lawmakers] can do that.”
Aside from the political obstacles, a host of technical and regulatory steps must be taken before the exchanges can open, including reviews of every type of policy submitted by insurers to determine they meet new standards for coverage and pricing. Those standards can’t be incorporated into the review system, however, until several yet-to-be-issued federal rules are finalized.
“Without the rules, we can’t get the (SERFF) system going,” said Holland.
The anticipated rules are expected to provide additional details on the types of benefits insurers must include in policies sold in the new marketplaces, Holland said. While proposed rules – including how insurers can adjust their premiums based on a consumer’s age or where they live – may be released this week, they are likely to give stakeholders at least a 30-day comment period before they are adopted. Generally, insurers say it can take a year to 18 months to develop new products and get them approved.
“The timeline is definitely getting crunched,” said Joel Ario, a consultant with Manatt Health Solutions who formerly served as the Obama administration’s head of exchange planning. “Insurers tell me they will need final approval of their products by July 1 so they will have three months to actually get set up to market them.”
That means there still is time, say some state regulators. In Mississippi, the SERFF delay is not being viewed with alarm, partly because the state expects only a handful of insurers to submit policies for review.
“We’ll have our work cut out for us, no doubt about that. But I don’t think we are in need of the time that some of the other states need,” said Aaron Sisk, senior staff attorney with the Mississippi insurance department, which he said will notify the federal government by Friday that it will run its own exchange.
But Sisk added, “if they keep pushing back the time, it could become a problem pretty quick.”
Insurers “are going to do everything they can to be ready to go by Oct. 1 of next year,” said Robert Zirkelbach, spokesman for American’s Health Insurance Plans, the industry’s lobbying group. “They want to offer coverage in the exchanges.”
The SERFF system is already used in nearly all states so insurers can electronically file applications for new products and premium adjustments. Developed by the National Association of Insurance Commissioners, the system was designed to streamline a process that can involve hundreds of pages of documents for each type of policy sold. To help implement the health law, the SERFF software is being updated to help state and federal regulators determine which policies meet the standards to be sold in the new markets.
The health law envisions states running their own marketplaces, but it allows the federal government to set them up and run them if states do not.
So far only 16 states and the District of Columbia have said they will run markets on their own. Last week, the Obama administration extended a deadline to mid-December for states to submit plans to set up their own markets, or to mid-February for those who want to partner with the federal government.
Ario says the extension shows the federal government “believes they can start the solicitation process [with insurers in February] and complete it in time to have product on the shelf for open enrollment in October.”
By pushing back the startup of the updated software, though, insurers will have less time to win that approval. It takes about 60 days for the average state to process an application to sell a new health insurance product, said Holland.
The delay “compresses the deadline … and everyone is concerned we will get flooded” in the spring with a slew of applications from insurers, said Praeger, a past president of the insurance commissioners association.
Meeting the deadlines “is going to be really hard,” she added. “Not that it can’t be done, but it really puts a lot of pressure on everyone.”
Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.
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Living in Alabama hinders my access to all kinds of helpful things. Ugh on that aspect of living here. I hope they get it straightened out, but people in my state will be denied any help at all if the "leadership" has its way. It's business as usual here.
Ram sorry you live in a red state that is controlled by Republicans. If the Republicans would not have been fighting this constantly and getting prepared for the change in 2014 it would be done by then. All the Republicans still want to do is dig their heads in the sand and say no to not even a tax increase for the highest 2% of income earners. This country will fall off the fiscal cliff come January if Boehner and his party cannot even budge on the simplest thing that will not kill jobs by the richest 2%. Even millionairs and billionaires have said raise our taxes. Our government is disfuctional and the economic calamity in the next month will make people freeze their spending for X-mas too. The wealthiest will not spend that money anyway and it will not get invested back into small businesses so give us all a break because we are not as stupid as you are up in Washington D.C. The Americans public agrees to have the wealthiest pay more tax but yet Boehner and his party constantly say no. The world is watching and our country looks like a bunch of stupid idiots in our government.
It is amazing how liberals can take a failure on the part of the Obama administration to get their act together and finalize regulations and turn it around to try and make it the fault of the Republicans. The Republicans have nothing to do with these regulations, they are entirely controlled by the Obama administration, so stop trying to blame others for the failures of your messiah's administration. As for your completely off topic rant about taxes on the rich, please educate yourself before you speak. This is nothing but a red herring being pushed by the Democrats to try and keep attention away from the fact that it is out of control spending that is the real problem. Even if you entirely repeal the "Bush era tax cuts for the wealthy" as the liberals like to call them, this will only eliminate about 1% of the overall deficit in Obama's proposed budget for next year. It is meaningless drivel when you look at the complete picture of the budget situation. The Obama administration's ill advised two year payroll tax holiday that cut the Social Security wage tax on employees by 2% has contributed far more to the budget deficits than the tax cuts for the "wealthy" that the Democrats like to crow about. I would also like to point out that a single person making $200,000 or a family making $250,000 a year may be doing well, but they are far from what I would call wealthy, particularly if they are living someplace like southern CA where I am.
The Republican led states that waited til the election to start planning their exchanges are to blame. They knew since June that the law was constitutional, yet they hung to Romney's promise to repeal, even though polls plainly showed the Dems would retain leadership of the Senate. Romney could make all the promises in the world to this respect, but given the make up of the next congress, it wasn't gonna happen...
I'll give you props though on your $250k remarks. I think that threshold is a little low. Now I hear the phrase top 2%, which is surely more than $250k.
I would also like to point out that a single person making $200,000 or a family making $250,000 a year may be doing well, but they are far from what I would call wealthy, particularly if they are living someplace like southern CA where I am.
Aside from a few very high cost locations (Manhattan, Georgetown, Beverly Hills, etc.) $250,00 is a LOT of money, far more than the average American earns. It also places you in the top 1.5% of U.S. households:
If being in the top 1.5% doesn't qualify as "wealthy", I don't know what does. Of course, the merely wealthy always compare themselves to the truly rich, who compare THEMselves to the hyper-rich. So everyone ends up feeling much poorer than they really are.
People need to stop spending all of their money on luxury items and then complaining that they're living paycheck to paycheck.
Ram move! Joann there is not enough money even if we tax all the rich people to pay for Obama emtitlement programs. If their was more money from taxes available the Democrats would find a way to give it away rather than pay the bills, which is alot like families do today.
Hint: It's not the computers, it's the managers who fail to hire experienced software engineers/programmers interested in quality.
Amen. The executives in my company think that firing 2 American programmers and replacing them with 20 offshore Indians = 10X productivity and quality at half the cost. And naturally such "leadership" brilliance merits rewarding themselves with lavish bonuses. I recently had to explain what an MSI and the Windows registry were to a group of offshore developers (yes, they were that ignorant). All for extremely subpar point of sale code that my company spent $millions on.
SERFF eh? That name is definitely an inconvenient truth. :(
hey HARM, get used to that. I've managed offsource projects for years and Indians are blind followers. You have to explain everything you want in such detail that we eventually found it cheaper to write the code ourselves and just offsource the testing.
SERFF is definitely an inconvenient truth. The Democratic Party wants to be Lords and the people be peasants. As for the Outsourcing...you're correct about them being blind followers. If they can't answer something by a script in front of them you'll never get any help.
I agree, as a programmer, it sounds like BS to me. As to rules they need finalized, they do't need to hard code them into the system, they can create a flexible database driven system where they can place test rules in them and replace them with the real rules later.
But, after working for a company closely related to the government, I know the real impediment will be the management with their concern for schedules instead of solutions.
"The lag is being blamed on the wait for several regulations from the Obama administration, which are needed to update the software."
These damn dumb-ass democrats can even get their own programs going!
Incompetent Democrats! The Obama Administration is dominated by the Keystone Cops and sexual perverts. Pelosi, Reid, and Obama said "we have to pass the Bill to see what is in it". The MORONS are clueless! These three MORONS should be ousted by the people, tarred and feathered, and shipped to Somalia.
The lack of technological change by the few should not hinder the many!
Computers are always blamed. If they really wanted to make the deadlines, they'd use a #2 pencil and write things down on paper.
This is overstating things, but I agree sometimes technology gets in the way and even creates its own problems. There's the problem of proprietary incompatble standards, chronically buggy and bloated code, and interoperability among different platforms. There's this almost religious belief that there's a high tech solution to every problem, and if it's not done with computers, it's not worth doing.
How long before THIS system gets hacked? You really want your applications details in this system?
I've seen operations that have tried to create one whiz-bang software package to handle all the facets of business and seen them repeatedly have to update to accommodate something they didn't consider, which in turns creates other problems, etc., etc., etc. Expect the same thing with the exchanges.
peanutGalleryTheater- I work with SERFF everyday and can tell you that this system does not store personal policyholder info. Basically it's just a system for insurers to submit policies, applications, riders and endorsements to regulatory agencies for approval (or disapproval). The spots where personal information goes are blank. The personal info is stored at the insurance company, just as it has always been. If someone really wanted to hack this system the only thing they would see is a bunch of blank applications and a bunch of non sensical policy forms.
And I am willing to bet that when this is all said and done and the exchanges have been set up, it will be no better than getting on line to compare rates now or using the old phone book to call insurance companies to compare rates and plans.
And when determining eligibility for the 6K assistance to buy insurance, I sure hope they screen people a lot better than what the Gov't does now when doling out treats. They should look at how much your house payment is (no you don't get to live in a more expensive home and then have tax payers pay your health care) how many homes you have, how many cars you have, etc --- total assets should be calculated - not just income.
This whole thing is going to be a farce, a joke, and a waste of money.
they better get it fixed i want my free healthcare now!!!!!!
The irony of Obamacare is that it doesn't address the rising cost of health care. It merely allows people to have insurance to pay for health care. Sooner or later health care costs will exceed the insurance benefits and people will still be unable to afford medical care.