Examining ObamaCare’s Problem-Filled State Exchanges

Hearing Description: The Oversight and Government Reform Committee recently met to examine how state-based marketplaces were operating under the ACA. The witnesses reported their fair share of IT problems, but those have since been addressed and the exchanges are on solid footing with most, if not all, meeting enrollment projections.

Hearing Date: April 3, 2014

Hearing Summary: Prepared for AAPS by the Market Institute

The House Oversight and Government Reform Committee recently met to examine how successfully state-based insurance marketplaces were being implemented. As mandated by the Affordable Care Act, states could opt to run their own insurance exchange instead of opting out and using the federal marketplace. Chairman James Lankford (R-OK) said in his opening statement that the committee will host a number of witnesses from state based exchanges. He posed the questions: why did those states have such a tough time implementing those exchanges and how much federal oversight and taxpayer dollars will be needed over the next few years?

The first witness Tom Matsuda, Interim Executive Director at the Hawaii Health Insurance Exchange testified in his opening statement the combined total of enrollments in their State-Based Marketplace is over 36,042. There have been serious issues delaying enrollment, including significant backlog. So far, the Connector has spent $57 million of the roughly $200 million in Federal grants. They are extending their community outreach efforts to educate even more people on their mission.

The second witness Dr. Joshua Sharfstein, Chairman of the Maryland Health Benefit Exchange Board testified in his opening statement that despite terrible IT problems, Maryland still expects to meet enrollment goals or even exceed them. Maryland’s IT investment into building the marketplace is currently at $55 million, and after updating their legacy Medicaid system, they expect their IT costs to be fully in line with other states. After enrollment has ended, there is a plan in place to address any remaining IT issues.

The third witness Jean Yan, Executive Director at the Massachusetts Health Insurance Exchange testified in her opening statement that over 200,000 more people have signed up for subsidized coverage. More than 26,000 people have purchased unsubsidized, ACA-compliant plans through their Health Connector. Massachusetts has also experienced their fair share of IT issues, largely in part due to the first system integrator. Only parts of the website was rolled out. However, a new team is in place and is expected to go live with a fully functional state marketplace website during the next enrollment period.

The fourth witness Peter Lee, Executive Director at the California Health Insurance Exchange testified in his opening statement that over the past two years, Covered California has received a series of federal grants to fund the initial establishment of the marketplace in California, totaling just over $1 billion. The funding received has been, and is being, used to develop, launch and enroll individuals in this new marketplace. Over 1.2 million people will have enrolled by March 31st, but with a two week extension, the final number will certainly be higher. Over 85 percent of consumers paid their premium for coverage starting in January. If that trend continues, Covered California will have over 1 million customers who will have effectuated their coverage and we will surpass the “enhanced enrollment scenario.”

The fifth witness Scott Leitz, Interim Chief Executive Officer at the Minnesota Health Insurance Exchange testified in his opening statement that MNsure, the state’s insurance marketplace, is stable and secure and has signed up over 169,000 people. Additionally, 95% of enrollees have paid for it. It is no secret that the rollout of their website in October was rocky, to say the least. It was marred by software and technical glitches. Since January, MNsure is working at an extremely high rate for users and it is expected to improve even more.

The final witness Greg Van Pelt, Advisor to the Governor for the Oregon Health Insurance Exchange testified in his opening statement that Oregon embraced the provisions in the Affordable Care Act and has been leveraging its success into allowing us to reform the delivery of care for Oregonians. Oregon’s coordinated care organizations are starting to show results in containing costs, reducing unnecessary emergency department visits and increasing primary care. As they bring more than 230,000 new enrollees into Medicaid, these strategies will help offset increased utilization in many areas and help local providers manage the increased demand for services. More than 300,000 Oregonians have enrolled in health care coverage since October thanks to Cover Oregon. The road has been bumpy, but consumers now enjoy a competitive insurance landscape.

In response to questioning, Tom Matsuda said:

Their goal now is to improve functionality of the website after meeting enrollment figures
He believes personally identifiable information is secure on their exchange
Sustainability will be a challenge for Hawaii and they are actively looking for ways to cut expenses and raise revenue

In response to questioning, Peter Lee said:

Person to person support has been challenging
They doubled the rate of Latino enrollment in one month through outreach
There have been no data breaches of personal information
As part of the ACA, people are “converting coverage” and not necessarily losing coverage

In response to questioning, Jean Yan said: