Maryland could end up spending as much as $30.5 million as a result of a glitch in its ObamaCare website, as the Obama administration steps in to help states with problematic exchanges.
Because of Maryland’s defective exchange, the state cannot determine whether customers remain eligible for Medicaid, according to a report by state budget analysts released Thursday.
As a result, the state has agreed with the federal government to a six-month delay in determining eligibility, meaning that payments will continue to be made to customers who are not eligible until the system is fixed. The delay will cost the state $17.8 million in fiscal 2014 and $12.7 million in fiscal 2015, the analysts estimated.
On Friday, the Obama administration said it would suspend some Affordable Care Act rules to help the 14 states with their own ObamaCare sites, particularly Maryland, Massachusetts, Hawaii and Oregon, which have had the most problems.
The federal Centers for Medicare and Medicaid Services plan, completed a day earlier, states the federal government will help pay for “qualified” health-insurance plans for customers in those states who because of “exceptional circumstances” had to buy plans outside of ObamaCare exchanges, as reported first by The Washington Post.
The administration made the change before the end-of-March deadline for Americans to enroll in ObamaCare this year.
In Maryland, the exchange cannot convert income data from the existing Medicaid enrollment system into a calculation needed to review whether enrollees are qualified “because of a variety of system architectural flaws,” according to budge analysts.
The exchange has been plagued by computer problems that have made it difficult for people to enroll in private health care plans since its debut Oct. 1.
State officials have decided to stick with the exchange through the open enrollment period that ends March 31 but is evaluating alternatives with an eye toward the next enrollment period that begins in November.
Among the possibilities is adopting technology developed by another state, joining a consortium of other states, partnering with the federal exchange or making major fixes to the existing system.
Thirty-six states use the federal HealthCare.gov site, which crashed and had other major problems in the first two months of enrollment.
The Maryland report said the state may need to develop an interim solution while a long-term solution is being developed. However, that process would likely take at least nine to 12 months, pushing up against the next open-enrollment period.
The report also states the development of the exchange was “a high risk undertaking” from the outset, in large part because of contractors woes, tight deadlines, constantly evolving requirement and its need to interface with work-in-progress federal databases.
The administration changes this week are not the first to ObamaCare, to be sure.
In November, Obama helped Americans about to lose policies because they didn’t meet new minimum requirements by allow the substandard plans to be sold through the end of this year.
And administration officials has twice this year given medium- and large-sized employers more time to offer health insurance to most full-time workers.
However, the change this week is significant because it marks the first time the federal government has agreed to help pay for policies bought outside the new exchanges.
The coverage in the outside policies would have to be comparable to those offered on the exchange. And customers would have to start paying premiums, then get the subsidies after the state exchanges could determine their income eligibility.
Maryland Health Benefit Exchange official told The Post earlier this week that roughly 7,000 applications are stuck in state’s system, but all of them might not need insurance and that officials were still looking over the administration’s offer.
A new and comprehensive comparison of health insurance options offered by Obamacare versus private websites finds that President Obama’s program offers less choice and higher prices than promised by the White House and leading Democrats.
Adding to the list of broken health care promises, the study from the National Center for Public Policy Research found that there were more and cheaper options available on websites outside the health insurance exchange in 2013 than on healthcare.gov and state Obamacare exchanges.
The report, “Obamacare Exchanges: Less Choice, Higher Prices,” looked at options available for a 27-year-old single person and a 57-year-old couple in metropolitan areas across 45 states.
The report found that a 27-year-old male had about 10 more policies to choose from on eHealthinsurance.com and finder.healthcare versus the exchange. The older couple had about nine more policy choices.
Ditto for the cost findings, with the 27-year-old male having access to 32 policies that cost less than the cheapest Obamacare offering, and the 57-year-old couple access to 29 cheaper policies.
“In general, consumers had substantially more policies to choose from on private websites such as eHealthinsurance.com and Finder.healthcare.gov than they presently have on the exchanges,” said the study.
“Obamacare supporters, including the president himself and Nancy Pelosi, claimed the exchanges would yield more choice and lower prices,” said the study’s author, David Hogberg. “This study shows those claims do not stand up.”
The National Center for Public Policy Research, founded in 1982, describes itself f as a “non-partisan, free-market, independent conservative think-tank.”
The Obama administration’s new proposed rule for Medicare Part D would eliminate half of all Medicare Part D plans and raise prescription drug premiums for millions of seniors by up to 20 percent, according to a U.S. House subcommittee chairman.
“Today, the average senior has 35 different [Medicare Part D] plans to choose from this year. This rule would reduce that choice to two plans. 50% of the plans offered today will be gone, and the health care that seniors like may go with it,” House Energy and Commerce Health Subcommittee chairman Rep. Joe Pitts said in a statement at a Feb. 26 hearing attended by a top administration health official.
“Limiting seniors’ choices like this will inevitably lead to higher costs. By some estimates, the restriction on the number of plans that can be offered could cause premiums to rise by 10%-20%. Costs to the federal government may increase by $1.2-1.6 billion according to a study by Milliman,” Pitts said. “… I urge Secretary Sebelius and Administrator Tavenner to rescind this rule.”
The study Pitts cited also showed that the new rule would increase out-of-pocket drug costs for 6.9 million seniors who do not qualify for low-income subsidies, and would raise federal taxpayer costs for six million seniors who do qualify.
President Bush signed Medicare Part D into law in 2003 to subsidize prescription drug costs for Medicare beneficiaries.
The Daily Caller reported that the administration’s Centers for Medicare and Medicaid Services (CMS), a division of Kathleen Sebelius’ Department of Health and Human Services (HHS), recently introduced a new proposed rule on the Federal Register called “Medicare Program: Contract Year 2015 Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs.”
The new rule “would revise the Medicare Advantage (MA) program (Part C) regulations and prescription drug benefit program (Part D) regulations to implement statutory requirements; strengthen beneficiary protections; exclude plans that perform poorly; improve program efficiencies; and clarify program requirements,” according to the Federal Register.
The rule states that it also aims “to implement certain provisions of the Affordable Care Act.”
The new rule’s stated desire to “strengthen our ability to identify strong applicants for Part C and Part D program participation and remove consistently poor performers” would give the Obama administration new authority to limit health insurance and prescription drug providers under the Medicare Advantage and Medicare Part D programs.
The rule would also violate the Medicare Part D’s law’s “non-interference provision that prohibits the Secretary of Health and Human Services (HHS) from interfering with the negotiations between drug manufacturers and pharmacies and sponsors of prescription drug plans,” according to testimony by American Action Forum president Douglas Holtz-Eakin, violating “congressional intent.”
Rep. Pitts expressed confusion and anger at CMS’ new rule.
“CMS itself says that 96% of the Part D claims it reviewed showed seniors saved money at preferred pharmacies, and nearly 25,500 seniors in my district have chosen Part D plans with a preferred pharmacy network. Yet CMS would take that away from them,” Pitts said.
“The Medicare Part D prescription drug benefit is a government success story. Last year, nearly 39 million beneficiaries were enrolled in a Part D prescription drug plan,” Pitts said.
“Competition and choice have kept premiums stable. In fact, in 2006, the first year the program was in effect, the base beneficiary premium was $32.20 a month. In 2014, the base beneficiary premium is $32.42 – a 22-cent increase over 9 years – and still roughly half of what was originally predicted,” Pitts added. “More than 90% of seniors are satisfied with their Part D drug coverage because of this. African-American and Hispanic seniors report even higher levels of satisfaction, at 95% and 94%, respectively.”
“The program has worked so well because it forces prescription drug plans and providers to compete for Medicare beneficiaries – putting seniors, not Washington, in the driver’s seat. Part D should be the model for future reforms to the Medicare program,” Pitts said.
House Energy and Commerce committee chairman Rep. Fred Upton joined with Pitts at the hearing in criticizing the new rule.
“The proposed rule, issued on January 6, 2014, appears to be a direct assault on the competitive structure of the program. It inhibits the ability of plans to obtain discounts for beneficiaries, limits the range of market segments in which they may compete, and usurps the responsibility of states to license those able to prescribe. This 700-page proposal makes numerous changes,” Upton said.
CMS principal deputy administrator Jonathan Blum testified that limiting Part D sponsors to providing only two plans per region will “promote needed clarity of plan choices for beneficiaries.”