Promised Fix for Health Site Could Squeeze Some Users

To help meet that schedule, the Obama administration, in an abrupt shift, named a “general contractor” on Friday to oversee changes to the troubled Web site of the federal marketplace.

Such a condensed time frame raises the question of how hundreds of thousands of people whose current policies do not comply with the health law will obtain new coverage in time, and how millions who may qualify for subsidies will enroll. Some experts predicted a groundswell of demands from Congress and elsewhere to delay the deadlines.

Jeffrey D. Zients, President Obama’s troubleshooter on the project, said the general contractor, Quality Software Services Inc., a unit of the UnitedHealth Group, would now “manage the overall effort,” like a general contractor on a home improvement project. Notably, that company had a role in developing one of the most troubled components of the marketplace, which helped verify the identities of those registering.

Until now, the federal Centers for Medicare and Medicaid Services served as the project’s quarterback. Contractors complained that the agency did not have the expertise to lead such a complex and ambitious undertaking, requiring the integration of dozens of programs and databases.

People involved in the repair effort said the Nov. 30 deadline was challenging but not impossible to meet. Mr. Zients, a management expert who is in line to take over as the chief White House economic adviser on Jan. 1, said, “By the end of November, HealthCare.gov will work smoothly for the vast majority of users.”

“It will take a lot of work,” he said. “A lot of problems need to be addressed. But let me be clear: HealthCare.gov is fixable.”

Since it went live on Oct. 1, the Web site has frustrated millions of people trying to obtain insurance under Mr. Obama’s health care law. For the administration, making it work is increasingly urgent for both political and practical reasons.

In recent weeks, insurance companies have notified hundreds of thousands of people around the country that their current coverage will end on Dec. 31 because it does not comply with the Affordable Care Act. For example, the policies may not provide “essential health benefits” like maternity care and may not cover as much of the medical costs as required by new federal standards.

In a typical letter, about 25,000 policyholders of Independence Blue Cross in Pennsylvania were informed, “As a result of the health care law, your current health plan will be discontinued effective December 31, 2013.”

Consumers living in Washington, D.C., were informed by CareFirst BlueCross BlueShield that “your current plan will cease to exist” on Jan. 1 because it does not conform to the new federal mandates.

Blue Cross and Blue Shield of Florida said it was informing about 300,000 subscribers that their insurance policies did not meet the new requirements.

Consumers are typically offered new coverage that meets federal standards, but the cost of comparable policies may be more or less than what they now pay, depending on a person’s age, income, family size, place of residence and tobacco use, among other factors.

Millions of consumers with individual policies are expected to qualify for subsidized rates. But the government must calculate the correct subsidies and process the enrollments — functions that were to be handled mainly by the Web site. People can also file applications on paper or by phone.

More than 19 million people have visited the Web site in the three and a half weeks since it opened as the main online vehicle in 36 states for choosing insurance coverage. But insurance executives said they were still receiving incomplete and inaccurate data on those who manage to get through the application process.

Mr. Zients said more than ninety percent of users were now able to create accounts, but only three out of ten were “getting through the application process.”

Robert Pear reported from Washington, and Sharon LaFraniere from New York. Ian Austen contributed reporting from Ottawa, and Reed Abelson from New York.

China’s Credit Squeeze Relaxes as Interest Rates Drop

China’s central government made no official announcement on the situation, and it remained unclear whether policy makers had intervened, but short-term interest rates fell sharply Friday from the day before, when they had reached some of the highest levels in a decade.

Still, rates for Chinese institutions seeking interbank financing on Friday were substantially higher than they had been a few weeks ago.

Financial experts said they expected the higher interest rates to persist for some time because the Chinese government appeared to have abandoned its longstanding policy of responding to any hint of an economic slowdown by expanding credit. Analysts say the government is holding back because it is determined to rein in excess credit expansion and avert a financial crisis that could result from years of poor lending practices and overinvestment. There are also hints that a huge shadow banking operation in China could be masking more serious financial risk-taking.

“The government at the moment wants to signal, we’re working on reform; we’re not interested in short-term stimulus, like China did in the past,” said Louis Kuijs, the chief China economist at the Royal Bank of Scotland.

The government’s reluctance to increase bank liquidity is troubling investors because of concerns that China’s economy is weakening much faster than expected.

Economists in China cut their growth forecasts sharply in the last week, though projections remain robust at 7 percent. Prices of Chinese shares plunged on the Shanghai and Shenzhen stock markets, ending one of the worst weeks in four years.

Joe Zhang, a longtime banker and the author of “Inside China’s Shadow Banking: The Next Subprime Crisis?,” said the apparent decision by the central bank to discipline banks by allowing rates to rise this past week was necessary.

“Effectively, they’re telling commercial banks to go and sort out their problems,” Mr. Zhang said by telephone on Friday. “The banks have lent out too much money. And what happens over time? You go from prime to subprime to silly loans. This is what happened with the U.S. subprime crisis. Banks start lending to bad projects. We’ve been too reckless.”

Determined to shore up defenses in a financial system that now underlies the world’s second-largest economy after the United States, China’s top leaders are slowing the flow of the fuel that has helped foster many of the risks: credit from state-run banks.

For much of the last decade, when the economy has slowed, Beijing has pressed state-owned banks to lend more aggressively.

But when interbank lending tightened this month — after aggressive lending early in the year — the central bank refrained from adding liquidity to the market, which would have kept short-term interest rates low.

As credit markets began to freeze up and mistrust among banks spread, rumors circulated of defaults. Late Thursday, the Bank of China, one of the country’s biggest lenders, was forced to issue a statement on its Web site denying local news reports that it had defaulted on interbank payments.

By late Friday, the markets had settled somewhat. The overnight lending rate between banks had dropped to 8.49 percent, down from a record-high fixing of 13.44 percent on Thursday, but still much higher than last month’s levels of less than 4 percent.

The situation remains volatile. Another benchmark rate for bank-to-bank borrowing costs, the seven-day repurchase rate, opened Friday at 8.1 percent, briefly soared as high as 25 percent and closed at 5.5 percent.

“Persistent tight liquidity conditions in China’s financial sector could constrain the ability of some banks to meet upcoming obligations on maturing wealth management products on a timely basis,” the credit ratings agency Fitch Ratings said in a report. Wealth management products are instruments sold to investors through banks and trust funds but do not appear on the financial companies’ balance sheets.

Referring to wealth management products, Fitch went on: “Issuance of new products, and borrowing from the interbank market, are among the most common sources of repayment for maturing W.M.P.’s, and the recent interbank liquidity shortage complicates both.”

Neil Gough contributed reporting from Hong Kong.