Obamacare a challenge, not a catastrophe

Are hundreds of thousands of Americans getting government money they aren’t entitled to because of Obamacare? Illegal immigrants, too? Is it all further evidence that the Obama administration is incompetent and the system unworkable?

For critics of health-care reform, these are tempting conclusions to draw from reports that the Obama administration found nearly 3 million discrepancies between what enrollees reported when they signed up for Affordable Care Act insurance and what federal records show about them.

Tempting but overblown. There’s more reason for encouragement from recent news about the act than there is to decry its problems.

Defying pessimistic predictions, more than half of those who signed up in the exchanges were previously uninsured, according to a June Kaiser Family Foundation survey. The law, then, has not served merely as a vehicle to move insured people from one plan to another. It is enrolling uninsured people, its main purpose. Among those who had insurance before, more reported lower bills under Obamacare than higher, and many in both groups no doubt have better coverage. Part of the reason is the financial help the government is providing. Some 87 percent of people enrolled in the exchange that the federal government runs for much of the country are taking government subsidies, and the average post-subsidy cost is a mere $82 a month.

But are those figures fraught with error or fraud? The Department of Health and Human Services’ inspector general revealed last week that there were 2.9 million inconsistencies between the information insurance applicants submitted to the federal exchange and data about them in government records. Most discrepancies had to do with citizenship status or income, both of which determine people’s eligibility for subsidies. The administration’s flawed technical systems were unable to resolve the inconsistencies quickly, so they piled up, and officials are still working through them.

Many of these discrepancies are likely to be small – incorrect documentation, misspellings or a simple absence of available records for the government to consult. Another source of error is that the government is checking applications against old tax and pay records, but applicants reported current incomes. Many ostensible errors probably did not lead to improper payments.

Problems of this sort are inherent in creating a system to distribute any means-tested benefit to millions of people, in this case a benefit that seems to be doing a lot of good. The right response is to get better at catching and resolving errors faster, not to condemn the system.

People who are getting more than they’re entitled to will be on the hook to pay some back next tax season, so the government must fix major discrepancies soon. It must also be ready for the next enrollment round. People will learn their 2015 premiums this fall. It will be as important as ever to have a functioning system in place to calculate their subsidies properly — and to serve the millions more expected to sign up next year.

The Obama administration, in other words, faces another Affordable Care Act management challenge, not a policy disaster.