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MESS Big problems remain with ACA exchanges

News about problems with the Obamacare website apparently is passé. After having a field day with the issue for a few months in 2013, the media by and large moved on. But problems with the website are far from over, as illustrated by an astonishing report from the inspector general of the Department of Health and Human Services.

The report focuses on the administration's inability to resolve 2.6 million of the 2.9 million "inconsistencies" flagged in applications for insurance coverage on Obamacare exchanges between October and December of 2013. In other words, 89 percent of the applications contained personal information that didn't square with other government records.

Worse, of the 330,000 inconsistencies for which there apparently is an explanation, the government has only resolved about 10,000 of them - fewer than 1 percent.

The inconsistencies involved information such as income, immigration status and whether a person is lawfully in the country, according to a story in The Washington Examiner. That information, when entered as part of the application process, is supposed to be checked against a massive federal database known as the "hub", which consolidates data from numerous federal agencies.

The fact that applicants' information doesn't match up with information in other government databases - or in some cases doesn't exist at all in those databases - raises all sorts of red flags. Fraud is of course the primary concern. The inconsistencies suggest some applicants may be receiving subsidies and/or coverage for which they do not qualify. A broader concern is that others are receiving subsidies in the wrong amounts, both too high and too low.

And there is also concern that the inconsistencies could wreak havoc in the 2015 tax filing season. Some people who belatedly learn they did not qualify for insurance and are not covered would be subject to fines under the individual mandate provision of the Affordable Care Act. Others could find themselves required to pay back subsidies that they did not qualify for.

Beyond those problems, there's the fact that the federal exchange software still just does not work very well in general. In one anecdote, the inspector general's report notes, "one marketplace cited situations in which infants and young children included on applications were erroneously identified as incarcerated."

There are similar problems in the state exchanges, the Examiner reports (no word if that includes Kentucky's). The inspector general said it received reports from 11 states disclosing 1.2 million inconsistencies as those states define them.

Technically the government is supposed to resolve inconsistencies within 90 days by requesting other documentation from the applicants and applicants are allowed to receive benefits during that period. However, a provision of Obamacare allows the 90 day resolution window to be waived by the government in 2014 and it appears that is what is happening in millions of cases.

The inspector general is pressing the Centers for Medicare and Medicaid Services to create and make public a plan stating how and by what date it will resolve the inconsistencies, and to bolster its oversight of the state exchanges on the same front.

It will be interesting to see how this all plays out. If the launch of the website was any indication, the outcome is likely to be mass chaos later this year and early next. The media's decision to leave this story behind seems likely to prove premature.

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