Already scrambling to meet a Dec. 23 deadline to sign up as many Californians as possible with insurance plans under the new federal health care law, the state's online exchange is confronting a potential delay over a backlog of 25,000 paper applications that must be resubmitted online.
Covered California officials said the problem should be resolved by the end of the week. But critics are worried that those who either filled out the paperwork for an insurance policy on their own, through a certified insurance agent or certified enrollment counselor since the exchange opened Oct. 1, might miss the deadline.
So is Covered California ready for the onslaught of last-minute applicants? There's less than two weeks to go before applicants must finalize their new insurance policies for coverage to start Jan. 1.
"They're not prepared," said Oly Storz, owner of Storz Insurance Services in Los Gatos. "People have been given false expectations."
The veteran insurance company owner has watched his own brokers wait three months to be certified to sell plans on the exchange. They've been put on hold for hours on the exchange's "broker hotline" then find they're unable to enter their name on the insurance application -- the only way the agents can make commission, he said.
"It's an avalanche now," Storz said of Covered California. "They say they're adding resources but they can't just hire new people who don't know what they're doing. It's just mind-boggling."
Larry Hicks, a spokesman for Covered California, said the exchange has "adequate personnel and adequate computer capacity to handle the workload that is to come."
But if last week's exchange statistics offer any kind of preview, procrastinators might want to start applying soon. Wait time for calls to one of three call centers around the state from Nov. 24 to Nov. 30 was 25 minutes, compared with 18 minutes the previous week. However, the average time it took for staff to handle each call was 18 minutes, the same as the week before.
Hicks pointed out that those buying insurance on the exchange have "a lot of different paths to enrollment," including 7,700 insurance agents, 2,047 enrollment counselors and 10,725 county eligibility workers.
Yet the paper application snafu was only discovered last week.
"You've got 25,000 applicants that have not been processed yet, and those 25,000 are expecting coverage on Jan. 1," said Neil Crosby, spokesman for the California Association of Health Underwriters.
"But since they're not yet in the system, the insurers don't even know they exist," Crosby said.
Hicks acknowledged that the situation is a "challenge" but said existing staff is being redeployed to address what he labeled a "temporary" issue. Moreover, he said, "it serves to remind us of the huge demand by hundreds of thousands of Californians who need health insurance."
For insurers, Hicks said the issue surfaced after the website's portal designed for certified insurance agents failed to work until Nov. 19. As they waited, agents printed out the 32-page paper forms for their clients, who filled them out and mailed or faxed them to the exchange's office.
Many certified enrollment counselors followed the same route with their clients after the counselors were unable to process online applications because of technical issues.
However, the data must be entered online through the exchange so health insurers can be notified of the new enrollments and provide individuals with a premium notice of payment due. Payments to health insurers must be postmarked by Dec. 31 for coverage to begin Jan. 1.
Last week, Covered California realized it could not process all 25,000 applications, said Hicks. So the exchange approached the California Association of Health Underwriters for help with the backlog. Hicks could not answer how the applications are being divided between the exchange and the insurance agents.
But copies of the paper applications will need to be resubmitted through the website. Crosby also said consumers should not assume their paper application was entered online for them, adding that they should either call their insurance agents or Covered California to determine whether their application was accepted.
Contact Tracy Seipel at 408-920-5343.