New delays hit Obamacare rollout before October 1 launch

By David Morgan

WASHINGTON (Reuters) - The U.S. government on Thursday announced new delays in rolling out President Barack Obama's healthcare reform, saying small business and Spanish-language health insurance enrollment services would not begin on October 1 as planned.

The postponements amount to a few weeks out of a months-long enrollment period aimed at signing up millions of uninsured Americans for health benefits. But they add to expectations of a slow start to the landmark social program which remains under attack by Republican leaders and faces formidable technical hurdles for states and the federal government.

The U.S. Department of Health and Human Services (HHS) said employers with 50 or fewer workers will not be able to sign their staff up for private insurance in federally operated exchanges until a month later, November 1, because of technical problems.

The White House also said online Spanish-language enrollment for Hispanics, an important Obama constituency who make up about one-third of the 47 million uninsured in the country, will also not be available until sometime between October 21 and October 28. Spanish speakers will still be able to enroll through a call center or enrollment specialists known as "navigators."

Administration officials did not explain the nature of the technical problems, but they emphasized that full online enrollment for other individuals will be available on October 1 under the Patient Protection and Affordable Care Act, commonly known as Obamacare.

The news comes as Obama and fellow Democrats are trying to stave off Republican attempts to delay the healthcare reform's launch with the threat of shutting down the federal government or risking a U.S. default on its credit.

"The Affordable Care Act is here to stay," Obama said in a feisty speech at a Washington-area college shortly before word of the new delays surfaced. He described the Republican strategy on Obamacare as, "'We've got to shut this thing down before people find out that they like it."

Republicans seized on news of the latest delay.

"This law is a disaster. But the exchanges -- the heart of the law -- are supposed to go live in just five days? Give me a break," said Senator Orrin Hatch, top Republican on the Senate Finance Committee.

"This law will never be ready for prime time, because this is what happens when Washington takes over healthcare," he said.

BUMPS AND GLITCHES

The Obamacare roll-out has required the creation of a massive information technology (IT) infrastructure to allow federal agencies, individual U.S. states and insurance companies to process applications for health coverage and determine subsidies for eligible Americans. The administration is counting on signing up 7 million people via the exchanges in their first year.

Earlier this month, health insurers complained of problems displaying basic information about the plans they will sell on federally run exchanges in 36 states. Among states that will run their own exchanges, Colorado, Oregon and the District of Columbia pared back their launches to address technical problems.

"I would imagine that the most critical defects are on the way to correction," said Rick Howard, a research director at technology consultant Gartner and an expert on public-sector IT, referring to the small business enrollment delay. "But it's going to be a rough ride."

The administration sought to play down the delays on Thursday, saying that new healthcare benefits for the uninsured would still begin on January 1, giving businesses two months to enroll for early coverage.

The enrollment period for small business is 12 months, and officials said small businesses would be able to shop for coverage, fill out paper insurance applications or discuss their options with call center staff beginning next week.

"As promised, people will be able to see what's in the marketplace, how to look at coverage, ask questions about whether or not this is good for their employees, find out about the tax credit then beginning November 1st, do the online enrollment," Health and Human Services Secretary Kathleen Sebelius said in an interview with cable-TV channel MSNBC.

It was the second Small Business Health Options Program (SHOP) delay for the administration, which postponed a provision to provide employees with a menu of healthcare options earlier this year.

A statement by HHS on Thursday focused on a ramp-up in government education and outreach efforts toward small businesses. Only in the 8th paragraph did the document mention in passing that "all functions" in the SHOP exchanges will be available in November.

The White House said the delay in Spanish-language online enrollment would provide "an opportunity" to build Obamacare awareness in the Hispanic community.

But Hispanic community representatives expressed concern.

"This type of delay can undermine enrollment efforts, so we think they need to do everything in their power to get this up and running as soon as possible," said Jennifer Ng'andu, director of health and civil rights policy at the National Council of La Raza.

"There's been such a fever pitch around October 1 that we don't want people walking away thinking there's nothing for them."

While Obamacare's foes in Washington pressed for delay of the entire law, members of the business community sounded a more supportive note.

"This is a huge undertaking and October 1 is not the only opportunity for small businesses to enroll. The glitches will come and we hope they will be speedily resolved. But in the meantime I don't have the sense that small businesses were lined up at the gates waiting to get in," said Neil Trautwein, healthcare lobbyist for the National Retail Federation.

John Arensmeyer, chief executive of the Small Business Majority, said Obamacare would bring major change to the U.S. healthcare system "so having a month delay is not a huge issue in the greater scheme of things."

Caroline Pearson of the healthcare consulting firm Avalere said SHOP exchanges are expected to have only limited enrollment because their value to business remains unclear.

(Additional reporting by Roberta Rampton in Washington and Lewis Krauskopf, Sharon Begley and Caroline Humer in New York; Editing by Michele Gershberg, Grant McCool and Leslie Gevirtz)