WASHINGTON, July 17 (Reuters) - Two U.S. government watchdogs warned on Wednesday of possible delays in the scheduled Oct. 1 start of new state healthcare exchanges, raising further doubts about the implementation of President Barack Obama's signature legislation.
One watchdog warned the Internal Revenue Service would have difficulty completing testing of systems required to implement the law, while another from the Government Accountability Office said he also foresaw difficulties in meeting an Oct. 1 deadline
But Obama administration officials offered assurances to a congressional committee that they were on track. Acting Internal Revenue Service chief Danny Werfel told the committee the tax agency was "on target." Separately, Mark Iwry, a health policy senior adviser at the Treasury Department, also told lawmakers the administration's healthcare work was proceeding on time.
The administration officials' remarks came amid worrisome comments by watchdogs including Alan Duncan, an auditor with the Treasury Inspector General for Tax Administration, an arm of the IRS that monitors the agency's performance and readiness.
Duncan said the IRS work that must be done to test the systems "will be difficult to complete," by the Oct. 1 start date.
"The lack of adequate testing could result in significant delays and errors in accepting and processing...applications for health insurance coverage," he told the House of Representatives Oversight and Government Reform committee.
At the same hearing, Government Accountability Office official John Dicken said he also saw problems implementing the healthcare law. The GAO is the investigative arm of Congress.
Beginning in October, individuals will be able to buy health insurance through the new exchanges in order to comply with the Affordable Care Act (ACA).
The exchanges are essential to the healthcare law's "individual mandate," which requires people to have insurance or pay a fine. These exchanges will extend coverage to millions of uninsured Americans by offering subsidized insurance through online marketplaces in all 50 states.
Many states have refused to set up the exchanges, adding to the federal government's burden in implementing ACA, which begins for individuals next year. The federal government has to set up exchanges for individuals in 34 states.
The U.S. Treasury and White House said earlier this month that businesses would not be required to offer health coverage, or pay a fine, in 2014 because the administration had failed to issue final regulations in a timely manner.
Congressional Republicans, who have taken more than three dozen votes to repeal the law since it was signed in 2010, are using the delay to argue the entire law is flawed. Another House vote is expected later on Wednesday.
The votes have little chance of moving in the Democratic-controlled Senate.
The total work that the federal government needs to do in each state is still to be determined, raising the risk of missing deadlines, GAO's Dicken said, adding the federal government and states have already missed some exchange deadlines.
Reporting By Patrick Temple-West; Editing by Kim Dixon and Leslie Gevirtz