District’s health exchange hits major snag but will still open Oct. 1

District officials announced Wednesday that a major part of a new health insurance system it is building under President Obama’s health-care overhaul will not be ready on Tuesday because of “a high error rate” discovered during recent testing.

The online marketplace, in which uninsured people are supposed to be able to sign up under the Affordable Care Act, will open as scheduled. But it will not be able to immediately determine online whether people are eligible for Medicaid, the state-federal program for the poor, or for government subsidies to afford premiums.

People who qualify for Medicaid will be able to find out from a trained helper, such as a broker, who can help them enroll. Those eligible for subsidies will be notified by e-mail in November, said Richard Sorian, a spokesman for the D.C. exchange, known as D.C. Health Link.

“We have created an alternative process, and nobody will have any delay in getting coverage,” Sorian said.

The problem is not expected to postpone District residents’ ability to sign up for coverage in time to meet a new requirement that virtually every American carry health insurance beginning in 2014 or pay a fine.

But it could give many people a false impression that they cannot afford coverage. And it will probably fuel perceptions that the law is not ready to be fully implemented.

“Why do they keep saying everything’s fine when things aren’t fine?” said Robert Laszewski, an insurance industry consultant tracking the progress of the exchanges. “They set expectations they can’t meet, and that undermines Obamacare.”

The online exchanges are the centerpiece of President Obama’s health-care law and are supposed to be open for business in five days.

Administration officials and supporters of the law have repeatedly predicted glitches and bumps when the new marketplaces launch. A few states have already announced that certain functions will be delayed. But the District’s delays appear to be the most serious.

Sixteen states and the District are operating their own exchanges; the remainder are either partnering with or having the federal government run their exchanges.

Joanne Peters, a spokeswoman for the U.S. Department of Health and Human Services, played down the effects of the District’s issue.

“There will be a marketplace open in every state and D.C. on October 1, where families can comparison shop for quality, affordable health coverage,” she said in a statement.

Sorian said the District’s problem became apparent within the last week from a contractor handling part of the computer system. Officials determined that there wasn’t enough time to fix it and came up with a work-around solution.

People seeking Medicaid coverage will be connected to more than 200 trained personnel who will help them complete their application offline and get them enrolled within 24 hours. Those who are eligible for tax credits will receive a calculation in early November by e-mail, Sorian said. That will allow consumers to make a decision before Dec. 15, for coverage that will begin Jan. 1, he said. All online functions are supposed to work by Nov. 1.

Meanwhile, people who are not eligible for Medicaid or tax subsidies will be able to complete their application and enroll online.

Experts say the District’s announcement is unsurprising, given the tight deadlines and difficulty of the task. State Web sites must be able to link with a federal data hub, which must verify information from agencies that include the Internal Revenue Service and the Homeland Security Department.

Lena H. Sun is a national reporter for The Washington Post, focusing on health.
Sandhya Somashekhar is the social change reporter for the Washington Post.
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