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Will the ACA health insurance exchanges be up in time?

Unless the state health insurance online exchanges are open for business on October 1, or soon after, there won’t be time enough for the millions of people expected to be processed and enrolled in new health insurance plans by January 1, 2014. That’s the grand opening of the Affordable Care Act (ACA), and it’s through the state exchanges that people will receive the benefits of that law.  Given all the promises and hype about the health care reform initiative, a less than smooth beginning would be a huge embarrassment and a loss of faith in the government’s ability to solve our health care problems.Modern monthly calendar

Not all states are building their own exchanges. Just  17 have declared their intention to build a State-based Exchange with 7 others electing to work with the federal government to set up a Partnership Exchange.  Twenty-six other states have taken an ACA option that calls for a federally run exchange in states declining to create one of their own.

What are the chances that 6 months from now, all the states will have their health insurance market places operational? -  Right now, it doesn’t look promising.

To help with the cost of building these exchanges, Health and Human Services (HHS) has offered the states funds to create their exchanges and maintain them over an initial period. Every state applied for the initial planning level grant; but only 12 states, so far, have been approved for level 2 funding, suggesting that development of exchanges for the other states hasn’t moved past the planning stage.  Exactly how close the states are to completion is not well publicized

New Mexico, one of the states building their own exchange, waited until January, 2013 to finalize agreements with an IT contractor.  Worse, the bill to actually start work on the exchange didn’t pass the New Mexico legislature until earlier this month and was signed into law by the governor just 3 days ago.  Minnesota and Idaho are in similar straits.  These late starts don’t bode well for an October completion date.

However, even states that started soon after the ACA was passed are experiencing delays. Media sources have cited vague and changing HHS ‘guidance’ to explain the delays in developing Connecticut’s exchange. Last year alone, government instructions on how health care reform is to proceed amounted to 70,000 pages!  Developing an easy to use, error-free, and accurate system on time under these semi-chaotic conditions alone would be daunting.

Meanwhile, it’s the federal government that’s on the hook for building 26 exchanges and partnering with 6 more.  No one expected this many states to abdicate control over their own health care exchanges.  One official, Gary Cohen, Director of the Center for Consumer Information and Insurance Oversight, assured lawmakers that development of these exchanges was ‘on track’ to be up on October 1.  However, another official admitted the work to be done by the feds is ‘staggering’; and Scott Serata, president and CEO of Blue Cross and Blue Shield Association, doubted the veracity of government assurances that all is going well.

Honest, straight-forward information about the progress of the exchanges being developed is not readily available. The Kaiser Family Foundation maintains a site that purports to track each state’s exchange activity.  But the information offered is largely based on official announcements and press releases, not much on specific development activity.  That there’s activity is evident.  Gartner Consulting sees all the big IT development companies, Xerox, Accenture, IBM, CGI and others are fully engaged by both the states and the feds.  But will their efforts be enough?.

Respected critics cite the late starts, scope and complexity of the task in their determination that not all the exchanges will be finished on time.    John Goodman, noted health care economist, believes only Massachusetts,  Utah and maybe Maryland and Colorado will be ready.

I’m not that pessimistic.  I think California, awarded a whopping $909 million by the feds and the first state to pass legislation initiating an exchange, will have an exchange up on time.  I also believe New York’s will be up and running as well.  (Accenture, a consulting and IT development company accepted $359 million to build and operate the California exchange while  New York  turned to the contractor responsible for its current Medicaid system to build its exchange.)

However, there’s a larger issue here.  Supporters of the health reform bill are putting everything they have behind getting enrollment started in a big way.  A successful kick-off would silence critics and start health reform in this country on a positive note.  Even more importantly, affordable insurance plans depends on many healthy people participating in these exchange market places.  Will these enrollment goals be met if all the health insurance exchanges were operational on October 1?

Far from it.  Even if all the exchanges were operating smoothly, participants would have to wade through an impossibly complex qualification process.  HHS recently released a sample enrollment form listing the most basic information required for the average applicant.  It’s 21 pages long!  A longer, 60 page document listed the information necessary to process all the benefits offered by an exchange.

The complexity reflected in the amount of information needed to obtain benefits presents a formidable barrier for those who want those benefits.   The Associated Press called it more complicated than any tax form.  The sad part is that the people who designed the form worked hard to make it as simple as possible.  The really sad part is that getting qualified is only the beginning of the process.  Choosing among 5 types of health insurance offered by innumerable health insurance companies will be another challenge.  So, despite the Herculean efforts being spent to get the health insurance exchanges finished in time, other factors will ultimately define the initial failure or success of the Affordable Care Act.

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