By Emily Ethridge, CQ Roll Call
June 19, 2013 -- The Obama administration is behind schedule on some key activities required to set up the federally run individual and small business health insurance exchanges, or marketplaces, the Government Accountability Office (GAO) said in two recently issued reports.
The GAO said in both reports that the Center for Medicare and Medicaid Services' (CMS) changing role in running the exchanges and the list of required activities left to complete "suggest a potential for implementation challenges going forward."
"Much progress has been made, but much remains to be accomplished within a relatively short amount of time," said the GAO in the report on the federally run individual exchanges. "And while the missed interim deadlines may not affect implementation, additional missed deadlines closer to the start of enrollment could do so."
Republicans jumped on the reports as evidence that the administration will fail to make the exchanges fully operational on time.
"We're less than four months away from open enrollment for the Obamacare exchanges, but the programs' details have more holes ... than Swiss cheese, and this Administration still wants to guarantee that the exchanges will provide insurance coverage to millions of Americas? Give me a break," said Orrin G. Hatch of Utah, ranking Republican of the Senate Finance Committee, in a statement.
The administration emphasized the progress it has made and said the exchanges, created under the 2010 health care overhaul (PL 111-148, PL 111-152), would be functioning by Oct. 1, when open enrollment begins. Coverage though the exchanges is slated to begin Jan. 1, 2014.
"We are working every day to establish individual and small business marketplaces where many Americans will have access to quality, affordable coverage for the first time," said Joanne Peters, a spokeswoman for the Department of Health and Human Services (HHS), in an email. "We have already met key milestones and are on track to open the marketplace on time."
Democratic Rep. Jim McDermott of Washington defended HHS, comparing the implementation of the health care law to that of Medicare in the 1960s. The program for the elderly is now the bedrock of the country's social safety net but at the time, workers going door to door to enroll seniors were angrily turned away, said McDermott.
"As the president has said, there will be bumps in the road but we will get there," McDermott said in a statement. "Rather than scaring people, let's focus on the real work needed to make sure that this reform continues to help the millions of Americans it's intended to benefit."
Hatch, House Energy and Commerce Chairman Fred Upton, R-Mich., and House Oversight and Government Reform Chairman Darrell Issa, R-Calif., requested the report on the individual exchanges while House Small Business Committee Chairman Sam Graves, R-Mo., requested the report on the small business exchanges.
One of the potential sources of delays comes from the CMS role in working with the 15 states that will be partners in the federally run exchanges in some way, said the GAO. CMS plans to operate the exchanges in 34 states total. In the partnerships it remains unclear which exact activities the federal government will take on and which states will handle, GAO said.
In addition, CMS may need to take on some activities in states seeking to operate their own exchanges if those states fail to make adequate progress on the necessary activities. As of May 2, CMS had not granted final approval to any state to operate its own exchange or participate in a partnership exchange, and "some of these exchanges may be under conditional approval when enrollment begins," the GAO said.
CMS did not respond to a question on when it would give final approval to those states.
Other unfinished activities lie in the areas of eligibility and enrollment, plan management and consumer assistance, the GAO said. For example, funding awards for navigators, who will assist consumers through the enrollment process, were delayed by about two months.
CMS also has not finished reviewing and certifying the qualified health plans that will be offered in the federal exchanges, the GAO said, although it completed the health plan submission process earlier this year.
The GAO report also noted the federal call center for the exchanges and the relaunch of the healthcare.gov website are not yet finished. Both are meant to be done this month.
The GAO also found some potential for delays in implementing the Small Business Health Option Program (SHOP) exchanges. Eighteen states will run their own SHOP exchanges while CMS will run them in the remaining states.
States were behind schedule on about 44 percent of their key activities for the SHOP exchanges, the GAO said, although it added that CMS had revised many of those target dates and other delays were not expected to affect the exchange operations.
In addition, CMS had delayed by about two months parts of a program to provide outreach and enrollment assistance to small employees and employers. Previously, the administration delayed for one year a requirement that small businesses in the program offer a wide variety of insurance options to their employees.
While they criticized the delays, Republicans also said the real problems would arise if the law is fully implemented.
"We are seeing a roll-out marred by missed deadlines and incomplete programs, but the real harm to patients, doctors, and taxpayers will result from a fully operational Obamacare," said Issa in a statement.