Obamacare 'Real Disaster' Possible Says California Insurance Commissioner

Robert Jonathan

The Obamacare implementation in California could be a disaster in terms of identity theft and fraud.

That is the assessment of the state's insurance commissioner who raised concerns about the thousands of enrollment counselors (who may also be called navigators in the law's bureaucratic jargon) who help people sign up for the Affordable Care Act though healthcare exchanges.

Many of these state-level exchanges aren't going to be up and running in time by the October 1 deadline anyway, which prompted US Senator Max Baucus (D - Mont.) in an April public hearing to say "I just see a huge train wreck coming down."

California Insurance Commissioner Dave Jones (also a Democrat) has specific misgivings about Covered California, which is what the exchange is called in the Golden State: "... [Jones] and anti-fraud groups say the exchange is falling short in ensuring that the people hired as counselors are adequately screened and monitored... Jones also said the exchange does not have a plan for investigating any complaints that might arise once the counselors start work. That means consumers who might fall prey to bogus health care products, identity theft and other abuses will have a hard time seeking justice if unscrupulous counselors get hold of their Social Security number, bank accounts, health records or other private information.

Said Jones: "We can have a real disaster on our hands."

Separately, the Obama administration announced that it has abandoned any income verification for those consumers who apply for coverage (and subsidies) through exchanges for at least one year and will rely on the honor system instead. As Forbes notes, "The feds will also allow people to gain means-tested subsidized coverage on the exchanges without having to…test their means."

The administration also postponed the employer mandate for one year. Under the mandate in the Affordable Care Act, employers with 50 or more employees would have been required as of January 1, 2014, to provide government-approved health insurance to their workers or pay a $2,000 fine per employee. The constitutionality of selectively enforcing or not enforcing the law's provisions has come under question, however.

The individual mandate, which was upheld by the US Supreme Court on a 5-4 decision based on it being deemed a tax, is still scheduled to go into effect as of January 1.

Various employers around the country have already cautioned that they may pass along expensive insurance cost hikes that insurance companies have been repeatedly warning about to customers. Other employers are downgrading workers into part-time status so they no longer have eligibility for insurance coverage or purposely keeping headcount below 50 to avoid the law's provisions -- which means jobseekers wil have a more difficult time getting hired. If or when the employer mandate kicks in, firms above the 50-worker threshold may find it more cost effective to drop health benefits entirely and pay the $2,000 fine per full-time worker, and some have said they will go in this direction.

Are you optimistic or pessimistic about the implementation of Obamacare?