Thursday, July 3, 2014

What the HHS Reports on the Health Exchanges Didn’t Cover

Recent media reports have highlighted unresolved inconsistencies in applications on the new insurance exchanges, including applications for federal premium and cost-sharing subsidies. Two reports released this week by the inspector general of the Department of Health and Human Services paint a troubling picture—and things could be worse than the reports suggest.

One HHS report examined data from federally run exchanges through Feb. 23 and from state exchanges through last December. Put another way, federal auditors tallied data from the months when the exchanges experienced middling to sluggish enrollment—not the periods when the greatest number of applications were completed.

The inspector general’s report indicates that federally run exchanges had 2.9 million data inconsistencies, of which only 1% had been resolved by late February. But those figures underestimate the number of inconsistencies from the 2014 open-enrollment period—and, unless data resolution has dramatically improved in recent weeks, probably also underestimate the number of inconsistencies still pending.

A separate inspector general’s report also released on Monday found that federally run exchanges, and state-run exchanges in California and Connecticut, in many cases lacked proper procedures for verifying applicant information. As a result, applications that should have been flagged for additional inconsistencies were not. Again, the scope of the verification problem is most likely understated.

When troubles became clear with the exchanges last fall, the focus on fixing immediate technical issues led to deferred work on verification systems. Overall, the reports expose another facet of the failures of Healthcare.gov—and the after-effects of last fall’s rollout could persist for some time.

This post was originally published at the Wall Street Journal Think Tank blog.