For many states, the Jan. 1, 2014, deadline to establish online health benefit exchanges (HBEs) as set forth by the federal Affordable Care Act may seem like a distant goal rather than an immediate priority. But for those involved in the IT portion of building the exchanges, the timeline is alarmingly short given the variety of policy and technical issues each state must sort through to comply with the act.
Some states are ahead of the game when it comes to building HBEs, but are worried about systems integration, information sharing and expectations at the federal level, while others are still in the initial planning stages. With so many uncertainties, it’s questionable if states will meet the deadline.
One major issue is how states’ individual online health exchanges will interact with a proposed federal data services hub to verify the personal information of those seeking insurance. Not all state officials are convinced that’s going to be feasible in the near future — particularly since the hub hasn’t been established yet.
Officials in Hawaii, one of the states in the initial planning stages of an exchange, worry the deadline is too close given the complexity of the information sharing that must take place.
“I think it is too tight,” said Lloyd Lim, health branch administrator for Hawaii’s Insurance Division. “The feds promise that there will be a federal hub that you can link into in real time so you can verify information with the federal agencies, but we haven’t really seen that yet. There is a lot we have to get done between now and then, and it is going to be quite the challenge, primarily on the information systems side to meet the 2014 deadline.”
Utah, which already has a health exchange online, also finds itself somewhat in the dark about its ability to meet the federal deadline, according to Patty Conner, director of the Utah Health Exchange.
“There is no definition today on how we need to deliver some of these services and what exactly their expectation is,” Conner said. “It’s really hard to say that we’re going to make the timeline, because we don’t know all of the components at this point.”
Some states are ahead of the game. Like Utah, Massachusetts also has a functioning online health insurance exchange that has been in operation for a while. Glen Shor, executive director of the Commonwealth Health Insurance Connector Authority, which operates the exchange, said he was confident that Massachusetts would meet the deadline.
Health Care Reform Timeline
March 23, 2010
The Massachusetts Health Connector was created as a part of the state’s health reform law in April 2006, and began enrolling people in subsidized health coverage in October 2006; unsubsidized coverage enrollment followed in May 2007.
Today approximately 215,000 people in the state get their insurance through the Health Connector, which makes it easier for low-income families to get health coverage.
The Health Connector, Shor said, subsidizes coverage for people whose incomes are less than three times the poverty level and who don’t receive coverage through their employers. For those individuals and families who earn more money, the Health Connector makes it easy to find affordable coverage via an online shopping experience on the site.
“The combination of those programs has put more affordable coverage in the reach of thousands of people who didn’t have access to affordable coverage previously,” Shor said, adding that more than 98 percent of Massachusetts residents now have health coverage.
Utah’s Health Exchange has been online since August 2009, but Conner said health-care reform conversations, which ultimately led to the exchange’s creation, began in 2000.
The state’s focus back then was getting small business employees insured, as that group — particularly those businesses with fewer than 50 workers — made up the lion’s share of the state’s uninsured population.
Utah elected to set up its online exchange using a “farmers market approach,” Conner said. Brokers and insurance companies created links on the site, which individuals could use to apply for health insurance. Those using the site can do comparisons and get quotes across the entire spectrum of carriers participating in the exchange.
To improve insurance coverage in the small business market, Utah also set up a function on the exchange called the “defined contribution market,” which went through a yearlong beta test period in 2010 and became active in January. Under the defined contribution system, small businesses give workers a set amount of money to shop for their own health insurance plan. Employees can choose from 140 plans offered by four participating insurance carriers. As of July, 157 employer groups were participating on the exchange.
“They really have the opportunity to shop and pick something that meets their needs,” Conner explained, “and [they] can use the money from their employer to pick the right plan for them, as opposed to a defined benefit approach where the employer makes the decision and puts out the money up front for the health-care plan.”
Hawaii, on the other hand, is in the early stages of creating its health insurance exchange. In December 2010, the state appointed a health insurance exchange task force and recently approved legislation that establishes the exchange.
The exchange will be a nonprofit entity, so the state is in the midst of tasks like acquiring a tax identification number and putting together a state board to govern the exchange. According to Lim, Hawaii will apply for the first phase of Affordable Care Act state establishment grants in December.
Lim said the state hopes to hire an executive director for the exchange late this year or in early 2012. At that point, he said the ball should be rolling in earnest to get the exchange online. “In the meantime, we are going to issue an RFP for an IT architect to help the board design the information systems solution,” Lim said.
About 2,500 miles east of Hawaii, California is knee-deep in planning for its own HBE, which will be governed by a five-person board and include a website that provides standardized comparison information on qualified health benefit plans and options, a cost comparison calculator, Web-based eligibility portal and toll-free hotline.
Bill Obernesser, IT policy adviser with the California Health Benefit Exchange, said the state is in the “highest level” of planning and analysis work regarding the exchange.
The governing board has been appointed, and exchange staff members have been meeting since April to put together a projected schedule designed to comply with the federal deadline. Obernesser said the state’s own deadline is to have the exchange up and running in fall 2013.
“Any state looking at the deadline has to say, ‘Do we have anything in existence that we can leverage?’” he said.
One of California’s biggest challenges in meeting the exchange deadline will be systems integration.
“Every other state with the possible exception of New York has a single eligibility system for its public assistance programs, including Medicaid, so the emphasis is on one system,” Obernesser said. “We have three, so I don’t think I or anyone else could imagine an exchange system that somehow doesn’t talk to that welfare eligibility system without even specifying what all the parts might be.”
Obernesser said the state will likely hire some integration help in early next year to see how best to tackle those issues.
Utah also will be exploring integration efforts. Conner said that in 2012, the state will focus on integrating the individual insurance market with its public assistance program. As of today, she explained, Utah’s public assistance systems are completely independent of the exchange.
“We want to create some quick decision-support tools for consumers and do some prescreens to see if they are eligible for Medicaid,” Conner said. “If they’re eligible, we will interface them to that program to complete their application process.”
In addition, Utah is giving consumers stronger tools for comparing the cost and quality of competing health-care providers.
Hawaii also is confronting the challenge of integrating an HBE with its public assistance system. Lim said Hawaii’s Medicaid program operates on “very old computer systems.” Upgrading those systems and connecting them to the health exchange in two years will be a tight squeeze.
“Going from a very old system to a new system in the space of two years is not really consistent with the track record that Medicaid has in doing those kinds of implementations — and the federal guys know that,” said Lim.
The complexity involved in connecting state HBEs with the federal government’s planned data services hub could lead to other issues. One of Uncle Sam’s big initiatives is using the hub to perform real-time validation of applicant-provided information. Obernesser questioned what would happen if the information used to verify insurance eligibility is outdated. For instance, using IRS tax data to verify income wouldn’t necessarily reflect that a person was recently laid off from a job.
“How this stuff plays out as a practical matter in determining eligibility online and in real time, I think there are some challenges there,” Obernesser said. “There’s not much technical challenge going to [the federal] hub, assuming that it exists, and passing over the Social Security number and getting back the income.”
Massachusetts also sees information sharing with the feds as a looming issue.
“We definitely need to build some information sharing infrastructure with the federal government, and I think that work will progress,” Shor said.
Lim said each state will have unique issues and goals, but Hawaii might have it easier because it has fewer health insurers writing private insurance. But that doesn’t mean it’ll be a walk in the park.
In particular, Lim cited Hawaii’s diverse population, language and cultural issues as topics to look at as a health exchange is being created, along with other state programs that may be impacted.
“We have an employee mandate called the ‘Prepaid Health Care Act,’ which we think survives the Affordable Care Act, so the question is how to integrate that,” he said. “When you get down to the nitty-gritty, there are always going to be problematic aspects of trying to make the states fit into a one-size-fits-all [model]. So yeah, it is going to be an issue for us.”