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Obamacare exchanges seen headed for 'rocky' enrollment start: expert

By David Morgan

WASHINGTON (Reuters) - Obamacare is likely to have a "rocky" enrollment start on October 1 in some U.S. states, because of ongoing technology challenges facing new online health insurance exchanges, a leading expert told U.S. lawmakers on Tuesday.

"At this moment, not a single state appears to be completely ready," W. Brett Graham of the Salt Lake City-based consulting firm Leavitt Partners said in testimony to a Republican-controlled oversight panel in the House of Representatives.

He said states should be capable of providing "baseline functionality" when enrollment begins in three weeks. But he cautioned about the potential for delays: "Most, if not all, exchanges will experience a rocky enrollment period as they work to overcome both known and unknown operational challenges."

Leavitt Partners has been involved in the design and development of some state exchanges and tracks exchange progress nationwide. The firm is headed by former Health and Human Services Secretary Michael Leavitt, a former Utah governor who held the health post under Republican President George W. Bush.

Graham's assessment for states that are working with the administration to implement President Barack Obama's healthcare reform was in sharp contrast with comments from technology contractors working to ready a federal marketplace for 34 states that have chosen not to set up their own exchanges.

Officials from technology contractors CGI and QSSI told the same House Energy and Commerce subcommittee hearing that they are on schedule for federal exchanges to begin operations as expected on October 1.

Graham did not identify the states that are facing challenges. Oregon has said it will delay full public access to its exchange for several weeks in October. California's exchange said on Monday it would be ready for full enrollment in time.

The exchanges are key to the healthcare law's success as the vehicle for enrolling an estimated 7 million uninsured Americans in new health plans for 2014. They will have until March to sign up for coverage next year.

Graham said state capacity has been strained by trying to tackle the complexity of the information technology (IT) needed to run the exchanges and a short timeline for implementation.

Some states are having difficulty integrating exchange technology with existing Medicaid and other state systems, according to Graham, who said the results could include slow enrollment, delayed eligibility determinations and increased potential for fraud and abuse.

There has also been a lack of adequate state exchange testing with "stakeholder" platforms and the federal hub system that the Department of Health and Human Services (HHS) has built to transfer consumer information between federal and state agencies, Graham said.

A U.S. watchdog agency warned in August that the federal IT system was months behind on security testing and said the HHS deadline for certifying system security had been set back to September 30. QSSI executive vice president Michael Finkel told lawmakers on Tuesday that the data hub completed a security risk assessment on August 30 and should be on track for certification.

"While some states have completed basic testing with the hub, others are working through the final testing phases despite still being in the building stages of development," Graham said.

"The risks of not having testing completed, or if something doesn't work as planned, is really delay - delay for the consumer and then delay for enrollment."

Graham said some states have had to cut back on planned functions by limiting initial website access, opting for manual processing on some functions, removing online chat functions for consumer assistance and limiting foreign language access.

"While such de-scoping is necessary to achieve basic functionality by October 1, the changes will impact the ability of both consumers and stakeholders to effectively access the system," Graham said.

(Reporting by David Morgan; Editing by Tim Dobbyn)

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