Healthcare.Gov Still Under Construction

As President Obama and Democrats do a victory dance over Obamacare enrollment numbers, they may wish to temper their celebration a bit. The fact is, there are still massive holes in the backend of Obamacare website,, that won't be built for months.

And when complete, chances are good that the resulting "mother of all reconciliations" between the guesstimates made by the government of how much in subsidies are owed consumers, and what's owed insurance companies, and the actual numbers, won't add up and taxpayers will be out additional billions of dollars.

To top it off, the reconciliation will almost certainly be known before the November elections because insurance companies need a full accounting before they can figure premiums for next year.

That accounting will show for the first time, exactly how many Obamacare enrollees have actually paid their premium, which should put a healthy dent in that 8 million number being touted by Democrats.


Obama administration officials originally intended to have the major back-end components of working by the website’s launch in October. But the deadline slipped as officials focused their energy on the part of the website that consumers would use to enroll in coverage.

When that front end failed disastrously on Oct. 1, the administration diverted every resource to fix it, further delaying the behind-the-scenes technical functions. The deadline for completing those pieces gave way to January and then to mid-March. Senior officials said early last month that they hoped to have the entire system ready by the summer. Now, even summer appears to be a question mark.

Officials at CMS — the federal agency overseeing and new insurance exchanges — refused to provide an update on just how much of the back end remains incomplete, the current issues they face and their latest timetable.

The site was envisioned as an easy-to-use portal for insurers as well as their customers. It still needs to be that and more. It’s supposed to automatically calculate exact premium subsidies for enrollees and match them with government records to ensure accuracy. It’s also expected to trigger payments from the U.S. Treasury to insurers and measure whether an insurance company’s customers are sicker or healthier than expected — a determination that could affect future premiums.

The Obama administration posted a document earlier this month indicating that insurers will continue to be paid through an “interim” accounting process — pretty much a spreadsheet and some informed estimates — until at least September. When the permanent system eventually goes live, it could lead to a massive correction that either exposes taxpayers to more costs or puts pressure on insurance companies to raise prices.

“We have the mother of all reconciliations coming,” said insurance industry consultant Robsert Laszewski, using the official term for the correction. “It may be that the administration will not be able to give us a credible enrollment number until then because we really need a reconciliation to accomplish that.”

One little discussed pitfall of Obamacare is overpayment by the government of subsidies to the taxpayer. What happens if you receive a larger subsidy than you're supposed to?

President Obama's new health care law will offer subsidies to help people buy private health insurance on state-based exchanges, if they don't already get coverage through their employers. The subsidies are based on income. The lower your income, the bigger the subsidy.

But the government doesn't know how much money you're going to make next year. And when you apply for the subsidy, this fall, it won't even know how much you're making this year. So, unless you tell the government otherwise, it will rely on the best information it has: your 2012 tax return, filed this spring.

What happens if you or your spouse gets a raise and your family income goes up in 2014? You could end up with a bigger subsidy than you are entitled to. If that happens, the law says you have to pay back at least part of the money when you file your tax return in the spring of 2015.

That could result in smaller tax refunds or surprise tax bills for millions of middle-income families.

And if insurance companies were overpaid, they must return the difference. This means higher than anticipated premiums next year. Of course, if they were underpaid, it means a nasty surprise for taxpayers who have to shell out the difference.

How many of those 8 million enrollees who got subsidies to purchase insurance were overpaid? How many were underpaid? How many got subsidies because they were thought eligible, but whose income now exceeds the subsidy limit and will owe the whole shebang?

That victory dance may very well turn into a funeral procession for Democrats come November.