Few states have embraced the ideas behind the Affordable Care Act (ACA) with more enthusiasm than Maryland and Massachusetts, which adopted many of them years before the passage of the federal law. But the two now find themselves trying to fix their malfunctioning health insurance exchanges and seeking federal approval to spend more money to do so.
Both states plan to replace their systems with technology from more successful state-based exchanges, but Massachusetts also wants to be prepared to switch to the federal exchange as a backup plan in case it can't pull off the switch in time for the next enrollment period, which starts Nov. 15. Switching from a state to federal-run exchange adds tens of millions in additional costs and would require giving up features that have been unique to the state’s health-care system since its 2006 overhaul, which greatly influenced the ACA.
The two aren’t alone among the 14 states that built their own health exchanges. Hawaii, Minnesota, Nevada and Oregon have all had technological failures that forced them to rely on paper applications for some or all of open enrollment. Only Oregon, though, announced that it will switch to the federal exchange. But most of them aren't spending more money to adopt technology from more successful states. Nevada, however, voted today to drop its health exchange contractor and partner with the feds for at least the next year and has already applied for federal grants to cover the additional costs, according to the Las Vegas Review-Journal.
Maryland received $180 million from the Centers for Medicare & Medicaid Services (CMS), the federal agency overseeing the formation of health exchanges about $119 million of which it spent on an exchange that ranked 40th among all states in sign-ups. The state is now seeking permission from CMS to put more of the remaining $61 million toward a purchase of Connecticut’s exchange technology, which is estimated to cost more than $50 million.
When states first applied for what are called Establishment Grants to build their online marketplaces, they had to predict the costs. Going over those costs requires them to resubmit plans to spend money that would have either returned to the federal government or gone to future changes.
Joshua Sharfstein, Maryland’s top health official, argues the approach makes more sense than trying to debug the existing system at a cost of $66 million or switching to the federal exchange because the state would have to rebuild its Medicaid system to sync with the federal exchange. That could be both costly and disruptive to current enrollees. “We think from a perspective of health, access to health care and fiscal management, that explains our decision,” he said.
Maryland's exchange suffered from management turnovers, missed deadlines and infighting between contractors.