John Sarich -- an insurance technology expert who said in May 2013 that the public exchanges should be in the testing stage by July 1, 2013, if they wanted to have a smooth launch -- says development problems look about as bad today as they looked a year ago.
Sarich, vice president of strategy at VUE Software, an insurance automation company, said he has seen no evidence that the vendors for the Centers for Medicare & Medicaid Services (CMS) has written the code for the back-end systems that are supposed to handle tasks such as billing qualified health plan (QHP) enrollees, paying Patient Protection and Affordable Care Act (PPACA) subsidies, and reconciling actual coverage numbers with the projected numbers used to calculate the subsidy payments.
Today, he said, because of the lack of functional back-end systems, simply sending QHP holders accurate bills and paying claims accurately depends on manual work-arounds.
Sarich said the big life and health insurers have the luxury of spending many years to develop big IT projects, and can do so quietly, out of the public eye. But even many of those projects fail, he said. He thinks getting the public exchanges systems to work properly could take three to five years, in part because of the exchange systems will have to connect with what, at least for now, are antiquated systems that rely heavily on floppy disks and COBOL.