Pricing glitch in exchanges could hamper enrollment

Insurance executives and government officials are rushing to address a pricing glitch in the software that operates health insurance exchanges before the online marketplaces open in less than two weeks.

The software, which affects all federally run and assisted exchanges in 36 states, isn't accurately determining how much consumers will pay for coverage, insurance execs and people familiar with the program told the Wall Street Journal.

What's more, testing of the price tool was scheduled to begin months ago, but the federal government only started last week testing it with some insurers. Molina Health Care, which will offer plans in seven federally run exchanges, said calculator testing hasn't been completed in six states, but went well in one.

"There's a blanket acknowledgment that rates are being calculated incorrectly," one senior health insurance executive anonymously said to the WSJ. "Our tech and operations people are very concerned about the problems they're seeing and the potential of them to stick around."

Despite this and other technical glitches that have arisen in the last few weeks, the Obama administration insists the exchange open enrollment period will start on time. "We may encounter some bumps when open enrollment begins but we'll solve them," Gary Cohen, director of the Center for Consumer Information and Insurance Oversight, told a House panel on Thursday.

The Obama administration's readiness for the exchange launch has been called into question multiple times over the last few months. The U.S. Government Accountability Office warned in a June report that untested health information technology and slow consumer outreach jeopardize the start of exchange open enrollment.

Part of the problem is that the exchange pricing tool must make eligibility determinations and subsidy calculations based on information transferred from several organizations, including the U.S. Departments of Treasury and Homeland Security, Stateline/Kaiser Health News reported.

"Nothing like this has ever been done on this scale," Cheryl Smith, a senior practitioner at Deloitte, told the newspaper. "People can make comparisons to Medicare Part D and to Medicare itself, but nothing this big has ever been tried."

To learn more:
- read the Wall Street Journal article
- see the Stateline/Kaiser Health News article