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Where Obamacare Ends and Private Insurers Begin Where Obamacare Ends and Private Insurers Begin

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Where Obamacare Ends and Private Insurers Begin

The White House has always promised the ACA isn’t a government takeover of health care. They’re about to find out if anyone believes them.

OPENING REMARKS: HHS Secretary Sebelius at ACA Hearing

Health and Human Services Secretary Kathleen Sebelius promised Wednesday that the back-end problems of would be resolved in time for the insurance coverage taking effect on Jan. 1, setting another high bar for the administration as it attempts to recover from Affordable Care Act's rocky rollout.


"We certainly have a plan—and we have vetted it and discussed it with insurers—that they are very comfortable with to get them their reimbursement," Sebelius said at the House Energy and Commerce Committee hearing on the status of Obamacare implementation.

With front-end enrollment on the federal website functioning much better after the administration's self-imposed Dec. 1 deadline, attention has increasingly turned to the site's critical back end, which sends health care shoppers to the insurers that will ultimately provide them with coverage.

Errors in consumer data forms sent to insurers, combined with the fact that much of the payment system is still being built, have raised concerns about the interaction between the federal website and insurance companies. If those interactions go awry, some insurance shoppers may be given the impression they're covered without having been fully enrolled.


However, Sebelius assured the committee Wednesday that the system improvements are continuing.

At's launch, the error rate for such forms was around 25 percent. Now, that error rate has dropped to about 10 percent. Sebelius said that HHS is currently hand-matching consumer and insurer records to catch errors in the automated system.

"There's a manual workaround, I would say, for virtually everything that isn't fully automated yet," Sebelius said. "It is in place, it just will be manual until the automation is fully complete and we've tested it and make sure it works. But in the meantime, the payment system will absolutely go forward."

But trying to explain the website's back-end functioning takes the administration into sticky territory, as officials try to draw a line between the Affordable Care Act and private insurers—a task made particularly difficult after years of critics claiming the law is a "government takeover" of health care.


The exchanges, after all, are not insurance providers. Instead, they are portals through which private citizens can—and, unless they want to pay a fine, must—buy insurance from private insurance companies.

After enrolling in the website, individuals are insured once they have selected their plan and paid their premium to the insurance company. Insurers will then receive a tax credit and cost-sharing reimbursement for eligible consumers starting in mid-January, according to Sebelius.

That distinction caused no shortage of confusion and contention at the secretary's Hill appearance Wednesday.

"What if that patient doesn't make the premium payment?" asked Rep. Michael Burgess, R-Texas. "You said they're covered Dec. 23, but they never write the check. They never make the payment."

Sebelius responded: "Then they're not covered. They are not enrolled. We did not take over the private insurance market. People will purchase insurance from insurance companies."

But even as the administration struggles to draw the line, their own method of measuring participation in the exchanges further muddies the waters.

When HHS reports the exchange enrollment numbers, it includes those individuals who have selected a plan but not yet paid as enrolled. HHS maintains that this is because the government's role in the process ends once the consumer chooses a plan, at which point they work directly with the insurance company.

But it is also a political expediency, as a narrow definition would further lower enrollment numbers at a time when the administration is already lagging far behind its goals.

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