"First they ignore you, then they ridicule you, then they fight you, then you win." -- Mahatma Gandhi

Tax Season Compounds Obamacare Problems & Screwups; AP: “As Cover Oregon Dissolves, It Leaves Behind Costly Legacy”

March 9th, 2015 by mopns · No Comments

With tax season in full swing, Americans are beginning to see many new frustrations thanks to Democrats’ unpopular health care law.

The AP wrote last week, “It’s not uncommon to feel some trepidation around tax-filing season. But there’s an added hassle this year for nearly a million consumers who got financial help with health insurance premiums under President Barack Obama’s law. The government sent consumers erroneous information on forms that they need to complete their 2014 tax returns. . . .

“‘It’s been a comedy of errors from the start,’ said K.C. Crafts, a freelance financial writer from South Berwick, Maine. The mistake the government made affected 800,000 customers receiving subsidized health coverage through the federal insurance market. Some states running their own insurance exchanges also have had tax-form troubles. In the federal case, 2015 premiums were substituted for what should have been 2014 numbers on new tax forms called 1095-As. Those forms are like W-2s for people who got subsidized health insurance – building blocks for filing an accurate tax return. . . .

“Crafts said her form has another error as well, potentially more serious. The coverage dates are wrong, and the result makes it appear as if she and her husband got much more in subsidies than they actually received. . . . ‘This is not just an aggravation, it’s a financial issue, because I could end up paying for a clerical error,’ she said. . . .

“Asked for an explanation at a recent House hearing, HealthCare.gov CEO Kevin Counihan put it this way: ‘It appears there was an unfavorable interaction between two pieces of software code.’ Translation: The administration still is technologically challenged by health insurance programs.”

Another way to translate that might be, “A law reordering 1/6th of the American economy to align with a massive new government program is unsurprisingly running into the bureaucratic screw-ups and snafus that are the predictable hallmarks of a large government undertaking.”

Meanwhile, The Hill reports, “A majority of ObamaCare customers, 52 percent, are being forced to pay back some of their subsidies during this year’s tax season, according to new data from H&R Block. Customers are paying back an average of $530, which has caused a 17 percent drop in the average return so far this spring, according to the analysis by the tax services giant. The Obama administration had warned that people could end up paying back some of their subsidies because many were relying on previous years’ income when applying for the tax breaks. H&R Block has predicted that ‘most filers’ would owe some of their subsidies back to the federal government because they were relying on 2012 income.”

And then there are the frequently troubled state health care exchanges, the worst of which have come from states dominated by Democrats who rushed to embrace Obamacare. According to a report in last week’s Seattle Times, “About 13,000 people with accounts in the Washington Healthplanfinder insurance exchange were sent emails . . . that indicated a payment of their monthly health insurance premium had been made automatically. There was one problem. In many cases, many of them saw three times the correct amount deducted from their bank accounts. To make matters worse, some consumers who tried to log in to their Healthplanfinder accounts to check on the payment could not get in. And those who tried to call the exchange’s call center had to endure hold times as long as 79 minutes. . . . According to Bethany Frey, spokeswoman for the exchange, this latest glitch was caused by a coding error that affected accounts in which a change or correction had been made in the amount to be invoiced.”

When it comes to problems with the state health care exchanges, though, one can reliably find the bottom of the barrel in Oregon’s latest struggles. The AP writes, “A bill dissolving the independent corporation that runs Cover Oregon is on its way to the Gov. Kate Brown. But even when it is gone, Cover Oregon will leave a legacy of hundreds of millions of dollars spent on a health exchange that failed — with even more millions in legal fees and other expenses still to come. Cover Oregon spent $300 million in federal funds, much of it to have Oracle America Inc. build an exchange for Oregonians to buy health insurance. The health exchange web portal failed to launch in October 2013.The state spent at least $26 million of its own money on Cover Oregon-related projects. Last spring, Oregon scrapped the web portal and switched to HealthCare.Gov, a federally run website.”

The AP then tallies all the money that the failure of Cover Orgeon cost both federal taxpayers and Oregonians from Bend to Eugene to Portland:

  • “$240 million — amount Oregon paid to Oracle for developing both the exchange for individuals and small businesses and for public assistance modernization projects. This was funded in part by a $300 million federal grant. The remainder of the federal grant went for salaries, marketing, communications, community grants and other administrative costs.
  • $23 million — additional state money spent on the failed modernization technology project.
  • $9.1 million — spent through the end of 2014 to hire hundreds of temporary workers to manually process paper applications.
  • $6.6 million — amount Cover Oregon paid Deloitte to assess glitch-filled exchange and provide future options for the state, as well as to transition the state to HealthCare.gov.
  • $1 million — amount paid for independent assessment of Cover Oregon project by First Data, and for services of turnaround expert Clyde Hamstreet and his team who took over Cover Oregon’s reigns at the height of its failure last spring.
  • $1.9 million — attorney’s fees for legal fight against Oracle and federal criminal investigation into exchange failure.”

But that’s not all, the AP notes, because Oregon will still have to pay $30 million to adapt another state’s Medicaid system, though “[t]he federal government has promised to pay 90 percent of it,” which translates to taxpayers in other states picking up the tab. And then there are all the yet to be determined costs, such as the “amount Oregon will pay Oracle to host the Medicaid system until December 2015,” the “amount it will cost Oregon to build a website for small businesses to obtain health coverage for employees, the “amount it will cost Oregon to modernize the state’s legacy social services computer systems,” and of course, the “additional legal fees for Oregon-Oracle lawsuits and criminal investigation.”

When Democrats insist in the face of all this evidence that “the law is working,” it’s clear they haven’t paid attention to any of the news reports about people losing coverage, unable to see doctors, struggling with higher premiums and skyrocketing deductibles, and it’s obvious they haven’t talked to anyone tussling with tax forms or Oregonians paying for that state’s disastrous health care exchange.

 Related:

CBS: “Insured Through Obamacare? Prepare For A Tax Headache”

IG Report: IRS Rehired Hundreds Of Ex-Employees With Troubled Records‏

“If You Like Your Obamacare Plan, It’ll Cost You”, “Doctors Weigh Whether To Accept Obamacare Plans”‏

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