Wires Report Feds Will Wing It With Subsidy Payments to Insurers, Megyn Kelly Pounces

On November 19, Henry Chao, deputy chief information officer at the Centers for Medicare and Medicaid Services, told a congressional committee that "[W]e still have to build the payment systems to make payments to issuers in January" for those who have enrolled in plans through HealthCare.gov.

On Black Friday, while almost no one was paying attention, Alex Nussbaum at Bloomberg News reported that "The administration is setting up a temporary process ... (in which) insurers will estimate what they are owed rather than have the government calculate the bill." Somehow, they'll settle up (or "true up") at the detailed level later. Tuesday evening, Roberta Rampton and Caroline Humer at Reuters covered this development. The Reuters item, which went live about an hour before Megyn Kelly's broadcast last night, moved the Fox News host to treat it as her lead story.

She gave it the serious treatment it deserved, revealed other shocking items the rest of the press has mostly downplayed or ignored, and nuked the entire idea, as claimed by President Obama, that "the law works."

Bloomberg's November 29 headline is weak and inaccurate -- "Obamacare Payment System to Insurers Changed in Setback." Winging it is not a "system." What the administration is doing is necessary because there is no system.

The Reuters pair's language also whitewashes the serious nature of administration's latest gambit, starting with its "this is boring" headline (bolds are mine):

Short-term fix eyed for another problem with U.S. healthcare website

President Barack Obama's administration has found a short-term fix to pay insurance companies for plans selected on HealthCare.gov, the not-yet-complete government website used to shop for insurance required under Obama's healthcare program.

The Centers for Medicare and Medicaid Services (CMS) has not yet finished building the part of the website that would transfer billions of dollars in subsidies for plan premiums and cost-sharing payments to insurance companies.

It is part of a long technical to-do list that has so far focused on fixing the errors and lag times in the part of the website used by consumers.

... Julie Bataille, a spokeswoman for CMS, said the government will make the payments to insurers for premium tax credits and cost sharing on time.

"We are committed to making sure they get paid in January and we will continue to work with them on that process," she told reporters.

... The administration is planning a "workaround" for payments, said Daniel Durham, vice president for policy and regulatory affairs at America's Health Insurance Plans.

Health plans will estimate how much they are owed, and submit that estimate to the government. Once the system is built, the government and insurers can reconcile the payments made with the plan data to "true up" payments, he said.

"The intent is to make sure plans get paid on time, which is a good thing," Durham told Reuters.

Now, (insurance) companies need to quickly put together financial management systems to make the payment estimates, so they can be paid beginning in January, he said.

The insurance companies have a whole 27 days with two major holidays intervening to get this done. What does that say about the government's attitude towards customer-vendor relationships?

Kelly was apparently unaware of Bloomberg's Friday report, and treated the Reuters story as breaking. Other than that shortcoming, the first eight minutes of Kelly's broadcast last night, with the help of Forbes writer Avik Roy, lit up the screen. Just watch:

Choice lines (among very many):

Kelly: "The administration (has been) forced to admit a huge failing in the system." - Kelly: "We're talking about one-sixth of the U.S. economy, and this is the system that they've now settled on." (Note: It's really a mechanism for coping with having no system. -- Ed.)

Roy: "(This) is not a bailout of the insurers. It's a bailout of the President."

Kelly: "Reports today are everywhere that up to 30% of the people who have enrolled on HealthCare.gov only think they have enrolled, and that in fact, the enrollment has failed, and when they go to their doctors on January 1 trying to get coverage, they're going to find out the hard way that their attempted enrollment failed, and they don't actually have coverage."

Roy: "We have more reason to trust the insurers than the Obama administration."

Roy: "The IRS doesn't have a system to check to see what your income is, to see what subsidies you're eligible for. And that's going to incentivize a lot of Americans to game the system and say, 'You know what? I actually didn't make that much money this year. Therefore give me a bigger subsidy, give me a bigger check.'" (Many people will also make inadvertent errors, because many will not understand the relatively obscure definition of "income" for ACA purposes ["Modified Adjusted Gross Income].")

Kelly: "(President Obama says) 'The law works.' Really?"

This administration move exposes the insurance companies, whether they appreciate it or not, to bully-pulpit charges of overbilling by opportunistic administration officials and leftist politicians and to deliberate withholding of payments by the government based on imaginary suspicions of unaccountable bureaucrats.

Though the story is several days old, I was unable to find any other other establishment press reporting. As of 8:30 this morning, based on a search on "estimate" at its national site, it was not news at the Associated Press. It would appear that whether or not billions of dollar in payments are properly made is just too boring to merit attention.

Cross-posted at BizzyBlog.com.

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