The race is on to build health insurance exchanges

Michael Tutty on state decisions around exchanges and challenges ahead

Getting health insurance exchanges set up is now “a frantic race to the finish,” said Michael Tutty, MHA, PhD, director of the Office of Health Policy and Technology at Commonwealth Medicine and an instructor in family medicine & community health. The Affordable Care Act (ACA) requires that online shopping sites, also known as exchanges, for health insurance to be up and running by October 2013 with coverage starting on Jan. 1, 2014.

States that opted to build their own exchanges were scheduled to be notified by the Secretary of Health and Human Services by Tuesday, Jan. 1, whether their plans passed muster. But Dr. Tutty, who leads the UMass Medical School team helping design and implement just such a service here in Massachusetts, said that even with a green light from HHS, it’s going to take a significant effort to complete all the work required by the ACA and its aggressive schedule.

The federal government will be helping with, or handling entirely, the set up and management of most of the state exchanges in the nation. “It’s ironic because, originally, many Democrats wanted the federal government to set up all the health insurance exchanges,” Tutty said. “The option for states to set up their own was offered because more conservative leaders argued that states should have the option for greater control.” In the end, only 18 states, the vast majority led by Democratic governors, and the District of Columbia announced by the Dec. 14 deadline that they would build their own exchanges. The remaining states, mostly led by Republican governors, will rely on the federal government—in whole or in partnership—to build their exchanges.

Tutty and colleagues are supporting efforts to update the Massachusetts Health Connector, the exchange built as a result of the state’s groundbreaking 2006 health care law, to meet new ACA guidelines. UMass Medical School also received one of just seven federal Early Innovator grants to help states develop the infrastructure needed to support exchanges. Tutty recently co-authored a report on that experience with, Jay Himmelstein, MD, PhD, professor of family medicine & community health and medicine, and the chief policy strategist in the Center for Health Policy and Research.

Until recently, most experts expected many states would want to build their own exchanges. However, it’s now clear that a majority of states will be relying on the federal government. These states have until Feb. 15 to decide whether to create an exchange in partnership with the federal government, taking on responsibilities such as customer service and plan management. Only about a dozen states are expected to do that, leaving the federal government to run the rest on its own.

“I expect many governors are waiting to see how these exchanges work out,” Tutty said. States can change their minds, and take over the exchanges sometime in the future. “This way, the states that wait can watch implementation and progress before making a decision. Each year states can switch from the federally facilitated exchange to running a state-based exchange,” he said.

The federal government thus faces a more daunting task than expected. “There are certainly some synergies and efficiencies possible when working across multiple states,” Tutty said, “But the federal government will be required to work with each state’s Medicaid system and various private health plans.” The ACA also calls for expansion of Medicaid eligibility, but states can choose whether to implement that aspect of the law or not. Whatever they decide about Medicaid, many states will require big upgrades to their information technology systems, or entirely new equipment, to establish an exchange or Medicaid eligibility system that meets the law’s minimum standards, he added.

Massachusetts is ahead of the pack in many ways. The Connector already complies with the state’s pioneering 2006 health reform law, which is very similar to the ACA. But key changes still need to be made. In particular, “The national law expands eligibility and increases subsidies, and the Connector now has to be able to determine real-time eligibility for the state’s Medicaid program and tax credits offered by the IRS,” Tutty said.

The idea is to provide those who are newly eligible for Medicaid or subsidized insurance with a seamless experience. “If you’re on the Connector and you determine you are low income, currently you have to print out a paper form, fill it out and file it,” Tutty said. By January 2014, residents should be able to register for Medicaid directly from the Connector. “Eventually, we hope to streamline that further, allowing someone who is eligible for food stamps, for example, to find this out while they are enrolling in Medicaid and then enroll in both online,” he added.

All states are working toward the same accelerated timeline, which makes it a challenge. UMMS has unique opportunities for collaboration as part of the New England States Collaborative for Insurance Exchange Systems (NESCIES) Early Innovator collaborative agreement, which is administered by Dr. Himmelstein. So far there’s been a lot of “great knowledge sharing,” Tutty said, and he expects the participants will eventually share technology developed. “That should help us with efficiency and ongoing costs.”

Despite the challenges, Tutty is optimistic about the future. “We have a lot of work to complete here in Massachusetts and the nation. I am confident we will meet the deadlines in our state and provide a better experience to determine if an individual is eligible for specific health insurance options, and then help them easily enroll. This is truly a transformational investment in technology to increase access to health insurance,” Tutty concluded.

Related links on UMass Med Now:

Tutty, Himmelstein on lessons learned from health reform

Deadline for health insurance exchanges extended

Early innovator grant helps UMMS lead in health reform implementation