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Sebelius Testimony on Paid Obamacare Enrollment Contradicts HHS Guidance

1:01 PM, Mar 13, 2014 • By JERYL BIER
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Testifying Wednesday before the House Ways and Means hearing on the Health and Human Services (HHS) budget, Kathleen Sebelius was bombarded with questions about implementation of the Affordable Care Act. She was asked to provide details on the administration's claims about current enrollment levels.  

Rep. Tom Price asked Sebelius how many of the 4.2 million individuals that HHS has reported as signing up via the Marketplaces have actually made a premium payment (via Politico):

“I can’t tell you because I don’t know that,” Sebelius told Rep. Tom Price (R-Ga.)... 

...Sebelius said the agency only receives “aggregate data” from insurers about those who have paid premiums and are eligible for tax credits — HHS pays those subsidies to insurers — but not the detailed individual information needed to answer Price’s question.

While Sebelius claims that HHS only receives information about "those who have paid premiums and are eligible for tax credits," guidance issued for insurers by the Centers for Medicare and Medicaid Services (CMS) shortly after the launch of Healthcare.gov contradicts that assertion.  According to the guidance, part of the confirmation that issuers are required to report back to HHS (via Healthcare.gov) must include premium payments, and indeed is necessary to validate an "effectuated enrollment."

The document is entitled Federally Facilitated Marketplace Enrollment Operational Policy & Guidance was issued on October 3, 2013.  In Section 2.4 - Relationship between Premium Payments and the Confirmation/Effectuation 834 Transaction, the guidance states [emphasis added]:

In the FFMs [Federally Facilitated Marketplaces], once an issuer receives either full payment or payment within the premium payment threshold (if the issuer utilizes a premium payment threshold) for any applicable initial premium due from the QI [Qualified Individual], and the issuer has received the initial 834 enrollment transaction, the issuer will send the FFM a full ASC X12 834 effectuation/confirmation transaction... The confirmation transaction provides the FFM assurance that the issuer has effectuated enrollment.

The document includes a number of examples throughout the text regarding confirmations, and nowhere does the required confirmation hinge on eligibility for tax credits.

Further, in Section 2.3 - Premium Payments, the guidance indicates that users at Healthcare.gov who have selected a plan with an insurer will be shown a "payment redirect" link to their insurers to make a payment online, or in the absence of online payment capability by the insurer, the user will be shown "standard language... that the issuer will bill them for premium payment."  The link, however, will only be shown to the user as long as the premium remains unpaid or a cancellation is received by the FFM (Healthcare.gov):

The FFM will provide the QI with the payment redirect link until the FFM has received either an 834 enrollment confirmation transaction from the issuer indicating the initial month’s premium has been paid, or has received an 834 cancellation transaction from the issuer.

This requirement is further documented in another CMS document, the Standard Companion Guide Transaction Information.  This document includes very detailed instructions on the type of information that must be communicated in both directions between the Qualified Health Plan (QHP) issuers (the insurance companies) and the Federal Facilitated Exchange (FFE, or Healthcare.gov.) Under Section 10.2 - Enrollment Confirmation/Effectuation Instructions – QHP Issuer to FFE, the document states [emphasis added]:

The actual enrollment begin date must be transmitted. Enrollment into the QHP is not effectuated until the initial premium has been paid.

The above documents make clear that the intention of HHS from the start was that insurers would confirm enrollment only when premiums were actually received.  As to the timing of such confirmations, Section 2.4 of the guidance document issued on October 3 states that "the FFM expects QHP and QDP issuers to send all confirmation transactions by the fifth calendar day of the effective month of coverage."  While HHS has implemented various exceptions, delays and clarifications, there is no indication  that insurers have been relieved of the responsibility to confirm premium payments, although the timing has been stretched, as an Interim Final Rule published in the Federal Register on December 17, 2013 spells out:

The Draft Enrollment Guidance outlines a procedural timeline that specifies that QHP issuers must send enrollment confirmation transactions to the FFE by the fifth calendar day of the effective month of coverage. Instead, the FFEs will accept enrollment confirmation transactions from QHP issuers for coverage beginning on January 1, 2014 throughout the month of January.

HHS has granted flexibility about due dates, effective dates, and the timing of confirmation of enrollments, but not the substance of those confirmations.  If insurers are following the guidance issued by HHS, then the agency has accumulated data on paid enrollments at least relative to the Federal Marketplace.  Some states running their own Marketplaces, such as Maryland, report weekly on the number of paid enrollments.

But as Kathleen Sebelius's testimony demonstrates, HHS is not yet ready to make the federal data on paid enrollments available to the public or even acknowledge its existence.

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