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Thursday February 11th, 2016 12:15PM

Feds balk at paper health application

By The Associated Press
FORT LAUDERDALE, Fla. (AP) -- Federal health officials, after encouraging alternate sign-up methods amid the fumbled rollout of their online insurance website, began quietly urging counselors around the country this week to stop using paper applications to enroll people in health insurance because of concerns those applications would not be processed in time.

Interviews with enrollment counselors, insurance brokers and a government official who works with navigators in Illinois reveal the latest change in direction by the Obama administration, which had been encouraging paper applications and other means because of all the problems with the federal website. Consumers must sign up for insurance under the federal health overhaul by Dec. 23 in order for coverage to start in January.

"We received guidance from the feds recommending that folks apply online as opposed to paper," said Mike Claffey, spokesman for the Illinois Department of Insurance.

After a conference call earlier this week with federal health officials, Illinois health officials sent a memo Thursday to their roughly 1,600 navigators saying there is no way to complete marketplace enrollment through a paper application. The memo, which Claffey said was based on guidance from federal officials, said paper applications should be used only if other means aren't available.

Federal health officials also discussed the issue during a conference call Wednesday with navigators and certified counselors in several states.

"They've said do not use paper applications because they won't be able to process them anywhere near in time," said John Foley, attorney and certified counselor for Legal Aid Society of Palm Beach County, who was on the call.

That contradicts what federal health officials told reporters during a national media call this week, during which they said there were no problems with paper applications.

"There is still time to do paper applications," Julie Bataille, communications director for the Centers for Medicare and Medicaid Services, told reporters on the call Wednesday.

A CMS spokesman declined to comment directly on the issue Friday when asked whether they discouraged navigators from using paper applications.

"With the recent fixes to the website, we are encouraging consumers to use healthcare.gov since it's the quickest way to get coverage, but paper applications remain an option for consumers and navigators if they choose," said spokesman Aaron Albright.

In early November, President Barack Obama himself encouraged paper applications as one of several alternatives to the federal website.

"I just want to remind everybody that they can still apply for coverage by phone, by mail, in person," Obama said on Nov. 4 in remarks to Affordable Care Act supporters at a Washington hotel.

The paper application problem comes as insurance agents and brokers are dealing with a massive backlog of applications that they can't process because of problems with the federal website, including incomplete enrollment files sent electronically to insurance companies.

Paper applications seemed like a safe bet in early October as agents and navigators struggled with online applications. Once federal health officials receive a paper application, they check with other federal agencies to determine whether an applicant is eligible for a subsidy to help pay for a portion of their health coverage. But the process, which includes verifying incomes and immigration status, is taking longer than expected.

"This timing concern is enormous," said Jessica Waltman, senior vice president of government affairs for the National Association of Health Underwriters.

Her organization, which represents insurance brokers and agents, is in daily contact with CMS on enrollment issues. In several recent conversations, Waltman said CMS has expressed concerns about paper applications but stops short of saying they can't be used.

"We've gotten concerns from them saying, `I don't know about the paper applications. That's a really slow go or I don't know if that's the best idea,'" she said.

Kelly Fristoe, an insurance agent in Wichita Falls, Texas, has submitted 25 paper applications since early October and hasn't received a response from federal health officials yet.

"At this time, we are not using any paper applications," he said.

That also contradicts what CMS told reporters this week.

Bataille, the spokeswoman for the federal agency, said all paper applications received during October have been processed.

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