A tale of two health care exchanges
ST. PAUL — A year ago, Minnesota and Maryland were at a similar place in developing new websites for their health insurance exchanges.
Both states were using a similar group of information technology vendors, and Minnesota and Maryland were helping each other by sharing code, according to comments from MNsure’s former executive director at a June 2013 board meeting.
But today, the two states seem to be charting very different courses.
Maryland decided this spring to pull the plug on its health insurance exchange website, and instead use a system developed by the state of Connecticut. The decision followed a judgment that the Maryland system “remains deeply flawed,” according to a March report.
But in Minnesota, officials have decided to stay the course — at least for the short term. A report this month from the Deloitte consulting firm found that only 26 of 73 website functions are working as expected, but MNsure officials focused on more optimistic findings when explaining their decision.
“As we look at the landscape of what are our available options, I wish that we could have said: ‘There’s a silver bullet here, and it’s this system that’s been currently built,’” said Scott Leitz, chief executive officer of MNsure. “We talked to other states. … We didn’t find that system.”
Information technology experts say it’s tough to judge which state is headed in the right direction.
Evaluating the baseline technology challenges in different states is difficult from the outside, said Rick Howard, research director for Gartner Industry Research, a Connecticut-based IT advisory firm. Plus, political considerations could prompt some states to try repairing systems, Howard said, rather than admit failure and hand off the job to another state or the HealthCare.gov exchange operated by the federal government.
The verdict on a state’s choice right now can’t really be made until Nov. 15, when the next open enrollment period begins for people trying to buy private coverage through the exchanges.
“At the end of the day, it’s what happens on Nov. 15,” Howard said. “What you can say is, the tolerance for anything like what happened on Oct. 1, 2013, will be far lower. Any decision that they’re making has got to take into account the stakes.”
“It’s extremely complicated,” said Deanne Primozic Kasim of IDC Health Insights, a Massachusetts-based consulting firm. “Each state’s situation is so different.”
Minnesota and Maryland were two of 14 states plus the District of Columbia to launch their own health insurance exchanges last year to implement the federal Affordable Care Act. The federal government’s HealthCare.gov website served as the marketplace for Wisconsin and 35 other states.
The health law requires almost all Americans to have coverage or pay a tax penalty, so the exchanges were meant to make shopping easier while connecting many with subsidies. But users experienced numerous problems with the federal website and many state-based exchanges.
In Minnesota, state officials determined by November that they had to rerun some 30,000 applications to check the accuracy of initial determinations for whether people qualified for subsidies or public health insurance programs. By December, thousands of MNsure customers were so frustrated trying to use the state’s balky website that they waited hours on hold seeking help from an overwhelmed call center.
By the close of the open enrollment period in March, MNsure made improvements to the website. The state hired an outside vendor for a staffing surge at the call center that helped keep wait times low.
By mid-March, officials were trumpeting the fact that MNsure had surpassed a goal for overall enrollment of 135,000, though the exchange fell short of projections for linking people with private health plans. By June 10, MNsure claimed 237,707 total enrollments, including about 186,000 people in public health insurance programs.
Maryland’s health exchange crashed on its opening day, and continued to have trouble throughout the fall. State officials claimed, however, that system improvements made since December allowed the Maryland exchange to exceed a goal of 260,000 enrollments by the end of March.
As of May 31, Maryland’s exchange claimed 372,517 enrollments, including about 300,000 in public insurance programs. Even with the big numbers, officials concluded in a March report that “Maryland’s current IT platform has serious defects that make an attempt at remediation an unacceptably costly and risky option.”
Comparing enrollment outcomes between the two states is complicated.
Maryland started with a larger pool of potential applicants for commercial coverage in its exchange, according to research from the Kaiser Family Foundation. After adjusting for the difference, a foundation analysis in April ranked Minnesota and Maryland No. 42 and No. 43, respectively, among all states in enrolling people in commercial health insurance.
On the public health insurance side, Maryland’s tally was helped by the automatic transfer of about 100,000 people into the state’s Medicaid program, said Stan Dorn, a senior fellow at the Urban Institute in Washington.
Minnesota’s commercial enrollment tallies are understated, Dorn said, because of the state’s MinnesotaCare program. It effectively pulls from the exchange market consumers who would otherwise be shopping with very large subsidies, he said.
Maryland isn’t the only state that’s decided this year to give up on its health insurance exchange. Officials in Massachusetts, Oregon and Nevada have announced plans to go in new directions, with HealthCare.gov providing at least part of the proposed solution in all three states.
In Minnesota, the federal website isn’t a good option, Leitz said, because the state needs to modernize its eligibility and enrollment system for Medicaid.
Currently, the work is being done as part of the MNsure program, he said, so scrapping the exchange would leave the modernization job unfinished. Plus, Minnesota would have to build a costly interface between the state Medicaid system and HealthCare.gov, Leitz said.
A key challenge with switching to the exchange in Connecticut or some other state, Leitz said, is that no other state has a program like MinnesotaCare.
“These are all new builds,” he said. “They were, to some degree, built to the conditions in different states, and coverage is different in every state.”
Like Maryland, the District of Columbia also launched its health exchange with similar vendors and goals as Minnesota, Leitz said. And like Minnesota, Washington, D.C., is staying the course with its website, he said.
To be sure, the Deloitte report found lots of problems with the current system, Leitz said. It also calculated that MNsure thus far has paid out to vendors about two-thirds of the $46.4 million earmarked for building the information technology system.
“This informs our discussions with the vendors today, which is: We’ve paid you two-thirds, but we haven’t received two-thirds yet,” said Brian Beutner, the MNsure board chairman, during a meeting this month. “So our discussions with them are: How do I take the third that I still owe you, and get the more than one-third that I’m still trying to get.”
Leitz said in an interview that he’s confident vendors will be motivated to get the job done. MNsure currently is negotiating extensions to vendor contracts that were set to expire Monday.
The good news from the Deloitte report, Leitz said, is that the initial review didn’t find significant gaps in the underlying technical architecture for the exchange. Plus, he said, the system is now correctly determining whether applicants qualify for subsidies or public insurance coverage.