The Government Accountability Office (GAO) released two new reports today confirming the Obama Administration is ill-equipped for the implementation of the federally facilitated health insurance and the Small Business Health Option Program (SHOP) exchanges created under the Patient Protection and Affordable Care Act (PPACA). The reports state the programs’ implementation delays and missed deadlines show potential for “implementation challenges going forward.”
House Small Business Committee Chairman Sam Graves (R-MO) requested the report on the SHOP exchanges. Finance Committee Ranking Member Orrin Hatch (R-UT), House Energy and Commerce Committee Chairman Fred Upton (R-MI) and House Oversight and Government Reform Chairman Darrell Issa (R-CA) requested the federally facilitated exchange report.
“This GAO report confirms our suspicions about the implementation of the health care law,” said Chairman Graves. “The law is indeed a train wreck with no relief in sight. One of the reasons small businesses were promised that health care costs could drop was the competition envisioned by the SHOPs. Instead, today’s report found that key activities and critical programs are incomplete and behind schedule. Add that to the recent year-long delay in the SHOP options health insurance and you have less competition, which could lead to higher premiums for small businesses. With each passing day it appears the creation of the exchanges are very much in doubt, creating more uncertainty for small companies who are already struggling to understand this massively complicated law.”
“What the GAO found is what most Americans have known all along: this law isn’t ready for primetime and come October millions of Americans and small businesses are going to be the ones suffering the consequences,” said Ranking Member Hatch. “We’re less than four months away from open enrollment for the ObamaCare exchanges, but the programs’ details have more holes in it than Swiss cheese, and this Administration still wants to guarantee that the exchanges will provide insurance coverage to millions of Americans? Give me a break. This is another broken promise from this White House.”
"The non-partisan GAO reports underscore the sad reality that the administration is still woefully unprepared for implementation despite the law being signed over three years ago," said Chairman Upton. "News of delays and missed deadlines are now just as prevalent as reports of Obamacare’s broken promises and the looming rate shock in store for millions of Americans."
“The GAO’s finding that the government is behind schedule in implementing Obamacare is troubling, but should not be surprising,” Chairman Issa stated. “This law has been unpopular and unwieldy every step of the way. We are seeing a roll out marred by missed deadlines and incomplete programs, but the real harm to patients, doctors, and taxpayers will result from a fully operational Obamacare.”
Open enrollment for federal or state health insurance exchanges begins on October 1, 2013, while the individual mandate goes into full effect in 2014. Lawmakers from both sides of the aisle have long expressed concerns regarding the lack of necessary details for the implementation of the exchanges, which are expected to provide 24 million individuals with insurance over the next decade, according to the Congressional Budget Office.
Key findings from the GAO Reports:
• States have yet to complete 85 percent of the required program activities. GAO found that, “…states had between 16 and 52 key activities remaining to be completed, or on average, about 85 percent of their total key activities [actions that must be completed before October 1, 2013].
• A key SHOP program to provide outreach and assistance to small employers and employees has been delayed. GAO found that “[f]unding awards and development of a training curriculum for a key SHOP program that will provide outreach and enrollment assistance to small employers and employees has been delayed by about 2 months.”
• Core functions of both federal and state-based exchanges have yet to be completed. According to GAO, “[The Center for Medicare and Medicaid Services] (CMS) has many key activities remaining to be completed across the core exchange functions – eligibility and enrollment, including development and implementation of the data hub; program management; and consumer assistance.”
• With less than four months before open enrollment, any other missed deadlines threaten the timely establishment of exchanges. The GAO reported that “…much remains to be accomplished by CMS and states within a relatively short amount of time.” The reports also noted that missed deadlines closer to the start of enrollment could impact the establishment of exchanges.
• HHS has yet to complete critical steps needed to determine eligibility for credits and cost-sharing subsidies. GAO found that, “CMS … still needed to complete steps to enable FFEs to be ready to test development of key eligibility and enrollment functions, including calculation of advance payments of the premium tax credits and cost-sharing subsidies, verification of consumer income, and verification of citizenship or lawful presence.”
• Key data sharing agreements between the federal exchange and its federal and state partners have yet to be complete. GAO reported that “…several critical tasks remain to be completed before the October 1, 2013, implementation milestone.” These tasks include Service Level Agreements (SLAs) between CMS and state and federal agencies, which are necessary to make eligibility determinations.
• Consumer assistance and outreach activities to individuals and employers has been delayed. GAO found that, “CMS has yet to complete many activities related to consumer assistance and outreach and some initial steps were behind schedule.” Such activities not yet complete include “…the federal call center, healthcare.gov website, media outreach, and consumer complaint tracking systems for the [Federally Facilitated] FF-SHOP and [Federally Facilitated Exchanges] FFEs.”
• The scope of CMS involvement in exchange activities remains unclear. If a state does not “make adequate progress,” CMS is expected to step in. According to the GAO, CMS has yet to grant final approval for any state seeking to operate an exchange. The GAO also notes that “some of these exchanges may be under conditional approval when enrollment begins.”
To view a full copy of the GAO report on the readiness of federally facilitated health insurance exchanges click HERE. For the readiness report on SHOP exchanges click HERE.
On March 27th, Chairman Graves wrote to the Department of Health and Human Services’ Centers for Medicare and Medicaid Services about its March 1st proposed rule to delay the implementation of the employee choice options under the SHOPs. Under the proposed rule, small employers wouldn’t be able to select a benefit level on federal exchanges, but would be limited to offering a single plan for their employees, severely limiting the breadth of choice that was originally envisioned, which could lead to increased premium costs.
The Chairman wrote in the letter, “If one of the key goals of supporters of the health care law was to provide small business owners with a competitive process by which they could select from a number of affordable health insurance plans for their employees, then that goal is not in sight. In the meantime, it is likely that entrepreneurs will continue to experience the premium increases they have come to expect.”