ObamaCare might well blow up by mid-March, according to government document

Do you ever get the sense that ObamaCare is analogous to an 8-year-old boy taking apart his grandfather’s railroad watch, only to discover when he has put it back together that there are a few parts left over?

Of course the website roll out was a disaster, but now the Health and Human Services Department has contacted, without taking bids, to turn over the website to another firm for a paltry $91 million atop the more than $600 million paid the failed contractor CGI, because CGI never built the “back end” of the computer system which was supposed to tie together the payments and IRS subsidies, according to Politico.

The HHS document that justifies the ouster of CGI for the newly contracted Accenture warns that, without fixes to the system, the whole thing could collapse:

CMS [Centers for Medicare & Medicaid Services] must immediately award a contract for these services under the auspices of the aforementioned exception to full and open competition because there is limited time to build this functionality and failure to deliver the functionality above by mid-March 2014 will result in financial harm to the Government. If this functionality is not complete by mid-March 2014, the Government could make erroneous payments to providers and insurers. Additionally, without a Financial Management platform that accounts for enrollments and associated program costs (i.e. Advance Premium Tax Credits (APTC), Cost Sharing Reductions (CSR), payments to insurance plans, etc.), that integrates with the existing CMS Accounting platform (HIGLAS), the entire healthcare reform program is jeopardized by significantly increasing the following risks:

• Creating erroneous estimates of budgeted and projected payments associated with operating the FFM;

• Inaccurate issuance of payments to health plans which could seriously put them at financial risk; potentially leading to their default and disrupting continued services and coverage to consumers;

• Inaccurate forecasting of Risk Adjustment, Reinsurance, and Risk Corridor; potentially putting the entire health insurance industry at risk; and

• Failing to support the end of the year reconciliation with IRS; leading to greater program costs for workarounds.

CMS believes the current FFM [Federal Facilitated Marketplace]development contractor is not going to be able to complete the development of the required functionality by the required date. The need for the FFM to perform the functions above by mid-March 2014 remains and the implementation dates for this functionality remain unchanged. CMS reached this conclusion in early December 2013 after the current contractor did not deliver software and services needed to process inbound effectuated enrollments to an Enrollment Data Store (EDS), perform duplicate enrollment checks, support enrollment reconciliation with FFM issuers, and perform payment calculations of Advance Premium Tax Credits (APTC) and Cost Sharing Reductions (CRS) for all Marketplace programs, state and Federal. [Emphasis added.]

Politico noted many of the 1.2 million people covered in federal exchange qualify for government subsidies, and those are supposed to be paid directly to insurers.

A top federal exchange official told a House panel recently the government will have to make those payments by using a workaround, “because we don’t have full functionality.” 

Now, don’t feel sorry for all those insurers who might not get paid, because, as Charles Krauthammer recently unearthed, buried in the 2.700-page ObamaCare bill is Section 1342, the “risk corridor” provision that mandates a taxpayer payout covering up to 80 percent of insurance-company losses. How do you think they got insurers to sign off on this actuarial table smashing endeavor?

Even with adverse selection, older and sicker people signing up, it is you and I who will pay through taxes or higher insurance premiums or both.

Nevada’s own Harry Reid played a significant role in crafting ObamaCare and jamming it through the Senate. Check his pockets and you might find a few missing cogs.