There’s yet another problem with technology the Obama administration is using to approve health insurance plans for Obamacare regulations, The Washington Post reports.
Flaws in a calculator the Obama administration created to approve group health coverage is causing the federal government to okay health plans that don’t cover hospitalization costs and other benefits supposed to be required by the Affordable Care Act.
The Department of Health and Human Services created the calculator for self-insured employers, which encompasses most large firms, to ensure that health insurance offers meet standards. Consumer advocates told the Post that the flawed calculator allow “inexpensive, substandard medical insurance” without triggering Obamacare penalties.
“There are a lot of errors in the calculator,” Shannon Demaree, actuarial services director at broker Lockton Companies, told the Post. “It allows more plans to pass as qualifying coverage than we believe really do.”
If a company’s health insurance plan doesn’t pass the calculator’s test, they’re liable to be fined up to $3,000 per worker in 2015.
Demaree said Lockton’s clients are very interested in the ability to offer the less inclusive and less expensive plans. Chicago-based consulting company Assurance has 35 employers looking to offer lower-coverage plans, while another Illinois company, the American Workers Plans, has 30 clients considering it.
“I think they were somewhat naive in not realizing that people were going to game the heck out of it,” actuary Hobson Carroll told the Post.
The Washington Post said that HHS directed questions about the calculator’s problems to the Treasury Department, while the Treasury Department said to ask HHS.
One of Obamacare’s core promises was that health insurance plans should be required to cover more services so that even the insured aren’t left with large bills for unexpected problems, such as long hospital stays. Inpatient hospital treatment is cited as one of the Affordable Care Act’s ten “essential health benefits” that are featured in all plans sold on Obamacare exchanges.
Workers whose employer plans is approved by the calculator, however, aren’t eligible for exchange subsidies, leaving them with fewer options outside the employer-sponsored plans.
While the glitch allows employers to continue offering plans that don’t live up to Obamacare’s promises, it does allow both employers and employees some relief from the higher health insurance costs sparked by the health-care law’s coverage mandates.