After months of speculation on just where the Obama administration is toward the development of the new health insurance exchanges, the Government Accountability Office (GAO) has issued a 48-page report complete with timelines and a detailed report on just where the Obama administration is––or at least was last month.
The key summary:
“Much progress has been made, but much remains to be accomplished within a relatively short amount of time. CMS’s timelines provide a roadmap to completion; however, factors such as the still-evolving scope of CMS’s required activities in each state and the many activities yet to be performed—some close to the start of enrollment—suggest a potential for challenges going forward. And while the missed interim deadlines may not affect implementation, additional missed deadlines closer to the start of enrollment could do so. CMS recently completed risk assessments and plans for mitigating risks associated with the data hub, and is also working on strategies to address state preparedness contingencies. Whether these efforts will assure the timely and smooth implementation of the exchanges by October 2013 cannot yet be determined. ”
Regarding the Data Hub:
“FFEs [the federal exchanges] along with the data services hub services are central to the goal under PPACA of having health insurance exchanges operating in each state by 2014, and of providing a single point of access to the health insurance market for individuals. Their development has been a complex undertaking, involving the coordinated actions of multiple federal, state, and private stakeholders, and the creation of an information system to support connectivity and near real-time data sharing between health insurance exchanges and multiple federal and state agencies. Much progress has been made in establishing the regulatory framework and guidance required for this undertaking, and CMS is currently taking steps to implement key activities of the FFEs, and developing, testing, and implementing the data hub. Nevertheless, much remains to be accomplished within a relatively short amount of time. CMS’s timelines and targeted completion dates provide a roadmap to completion of the required activities by the start of enrollment on October 1, 2013. However, certain factors, such as the still-unknown and evolving scope of the exchange activities CMS will be required to perform in each state, and the large numbers of activities remaining to be performed—some close to the start of enrollment—suggest a potential for implementation challenges going forward. And while the missed interim deadlines may not affect implementation, additional missed deadlines closer to the start of enrollment could do so. CMS recently completed risk assessments and plans for mitigating identified risks associated with the data hub, and is also working on strategies to address state preparedness contingencies. Whether CMS’s contingency planning will assure the timely and smooth implementation of the exchanges by October 2013 cannot yet be determined.”
That about sums up the whole report––CMS has been outwardly optimistic but is clearly struggling to make the deadlines.
Continue reading “Will the Federal Health Insurance Exchanges Be Ready On Time?”
Filed Under: THCB
Tagged: Affordable Care Act, CMS, Federal Insurance Exchange, Robert Laszewski, The States
Jun 19, 2013
Last week, I received my weekly email update from the Maryland health insurance exchange:
Maryland Health Connection completed its Final Detailed Design Review (FDDR) live system demo on Thursday, May 30. The FDDR is a federal stage-gate required of all state-based exchanges. Maryland Health Connection successfully demonstrated end-to-end enrollment of a split family scenario including user log in, eligibility determination, real-time data verification through the Federal Data Services Hub, enrollment into plans, payment and file generation to be sent to an insurance carrier. This major information technology milestone received high marks by federal partners. We will continue with development of Maryland Health Connection over the next several weeks and begin user acceptance testing in July.
This report tells us a few things.
First, the Maryland health insurance exchange is on track to launch on time and ready to serve all comers. I continue to be impressed by how well this state-run health insurance exchange is working toward implementing the Affordable Care Act (“ObamaCare”) on October 1, 2013.
Second, apparently the Federal Data Hub is up and running. While that is what the Obama administration has been telling us, it has been hard to find anyone who has actually seen it or used it.
Third, Maryland has its system ready to exchange eligibility and premium information with the health insurance plans––perhaps the biggest challenge the new exchanges, state or federal, face.
Across the country, I am not so worried that consumers will have a website to go to on October 1 in order to shop for the new health plans as I am concerned with how things will go on January 1, 2014 when patients show up in a doctors office. If we don’t have a clean exchange of eligibility and payment information there are going to be lots of people who will have their doctor or hospital telling them they don’t know anything about their coverage.
Continue reading “Will the Affordable Care Act’s Health Insurance Exchanges Be Ready On Time? The Obama Administration’s Top Secret Enterprise”
Filed Under: THCB
Tagged: Affordable Care Act, Federally-run exchanges, Health Plans, Insurance Exchanges, Obamacare, Robert Laszewski, State-run exchanges, The States
Jun 9, 2013
I have to say I was surprised with the press reports last week that there wasn’t “rate shock” in California when the California exchange offered preliminary information about their new plans and rates.
At least one prominent health actuarial group had predicted a 30% baseline increase in costs for California’s new health insurance exchange plans under the Affordable Care Act (ObamaCare”).
As the director of the California exchange put it, “These rates are way below the worst-case gloom-and-doom scenarios we have heard.”
But a few days later there is lots more information coming out and it would appear we have a case of apples to oranges to grapefruit. And, we have a pretty good case of rate shock.
First, the exchange officials pointed out that we have to be careful to compare apples to apples when looking at 2013 rates and comparing them to the 2014 exchange rates because the 2014 exchange plans have far more generous benefits.
Yes we do, particularly when the California exchange forces us to give up our apple and buy a more expensive orange.
One of the reasons health insurance in the exchange will cost a lot more in most states is because the new health law outlaws many of the existing plans now being offered and requires only those much richer plans to be sold.
Are people going to get more coverage for their money? Yes. Do they want more coverage if the premium costs for those plans is a lot higher? Likely yes if taxpayers are paying for most of it. If not, clearly they didn’t want to pay for it before. Come January, lots of California consumers in the small group and individual market are going to get a letter from their existing insurer telling them their current plan is no longer available and the cost of the new required plans will be a lot more.
Simply, the new law is taking plan design choices away instead of letting the consumer decide what is good for them. Does that matter in California?
Continue reading “Rate Shock and Awe in California”
Filed Under: THCB, The Business of Health Care
Tagged: Affordable Care Act, California, Insurance Exchanges, Rate Shock, Robert Laszewski, The States
May 28, 2013
Every week, I get an email from the Maryland Health Connection––the state run health insurance exchange.
Maryland is one of a minority of states that are building their own Affordable Care Act (“ObamaCare”) exchange.
You can go to their site and sign up for these weekly updates.
Let me suggest that Maryland is an example of what an on-track and well organized effort looks like for any exchange hoping to be ready to enroll people on October 1––and ensure that they will be covered should they walk into a doctor’s office on January 1, 2014.
Maryland is simply ticking through all of the key milestones they must meet. The latest release reviewed its efforts to launch the connector program (those who will assist people in signing up), the status of the carrier filings (Maryland Blue Cross has filed for an average increase of 25% for individual coverage warning young people could pay as much as 150% more), the timelines for carrier submissions of coverage packages, and they outlined their third party administration program to be able to launch the small business choice (SHOP) option––unlike the federal exchange Maryland will have the SHOP option.
Continue reading “A Health Insurance Exchange That Won’t Be a “Train Wreck””
Filed Under: OP-ED, THCB
Tagged: Affordable Care Act, Insurance Exchanges, Maryland, Robert Laszewski, The States
May 1, 2013
As the Obama administration continues its top secret effort to build federal insurance exchanges in about 34 states while 16 states are doing it on their own, that continues to be the big question.
HHS is using IT consulting firm CGI for much of the work on the exchanges and the federal data hub. CGI has their plate full since they are not only working on the federal exchange but also doing work for the state exchanges in at least Colorado, Vermont, and Hawaii.
Earlier this month, the Senate Finance Committee held an oversight hearing. The Obama guy in charge of exchange development testified before them. I thought it was notable that it was the Democrats who expressed the greatest concern, and frustration, over senators not getting a clear idea for just where the administration is toward the goal of launching the new health insurance exchanges on October 1.
Continue reading “Six Months Out Health Plan Execs Say They Doubt Exchanges Will Be Ready”
Filed Under: Health Plans, THCB
Tagged: Affordable Care Act, CGI, Edifecs, Health Insurance Exchanges, Health Plans, HHS, Robert Laszewski, The States
Mar 26, 2013
So far California has received $910 million in federal grants to launch its new health insurance exchange under the Affordable Care Act (“Obamacare”).
The California exchange, “Covered California,” has so far awarded a $183 million contract to Accenture to build the website, enrollment, and eligibility system and another $174 million to operate the exchange for four years.
The state will also spend $250 million on a two-year marketing campaign. By comparison California Senator Barbara Boxer spent $28 million on her 2010 statewide reelection campaign while her challenger spent another $22 million.
The most recent installment of the $910 million in federal money was a $674 million grant. The exchange’s executive director noted that was less than the $706 million he had asked for. “The feds reduced the 2014 potential payment for outreach and enrollment by about $30 million,” he said. “But we think we have enough resources on hand to do the biggest outreach that I have ever seen.”
Continue reading “A $910 Million Price Tag For California Exchange: A Dark Omen of Things to Come”
Filed Under: Health Plans
Tagged: Affordable Care Act, California, Covered California, Health Insurance Exchanges, HIEs, New York, Private Insurance Exchanges, Robert Laszewski, The States
Mar 24, 2013
A million Floridians will now be eligible for Medicaid––the Obama administration is happy about that.
Republican Rick Scott gets to do it his way––in an almost entirely private market.
This from today’s Tampa Bay Times:
His [Scott's] endorsement of the expansion came hours after the federal government agreed to grant Florida a conditional waiver to privatize Medicaid statewide for the state’s more than 3 million current recipients, more than half of which are children or people under age 21.
Scott has agreed to only a three year trial expansion and the legislature must vote in favor of it––not a certainty. And, the Obama administration is taking some big risks––a five county trial of Scott’s privatization program has had lots of problems.
In prior posts I have said that Republican governors, so adamantly opposed to “Obamacare,” ought to go to Washington and negotiate a deal on Medicaid expansion. If they believe they can manage Medicaid better than the traditional federal route, which is what they claim every time they demand block grants, then they should put a deal on the table. Ultimately, the feds will pay 90% of costs and the state will pay 10% of the cost of the expansion. The Republican governors don’t believe they can save 10% if given more flexibility?
Continue reading “Rick Scott’s Privatization Experiment in Florida”
Filed Under: THCB
Tagged: Medicaid Expansion, Rick Scott, Robert Laszewski
Feb 21, 2013
Last week, I reported on my informal survey of health insurance companies and their estimate for how much rates will rise on account of the Affordable Care Act (“Obamacare”).
Today, there are press reports quoting the CEO of Aetna with their estimate. The Aetna estimate is worse than mine.
Health insurance premiums may as much as double for some small businesses and individual buyers in the U.S. when the Affordable Care Act’s major provisions start in 2014, Aetna Inc. (AET)’s chief executive officer said.
While subsidies in the law will shield some people, other consumers who make too much for assistance are in for “premium rate shock,” Mark Bertolini, who runs the third-biggest U.S. health-insurance company, told analysts yesterday at a conference in New York. The prospect has spurred discussion of having Congress delay or phase in parts of the law, he said.
“We’ve shared it all with the people in Washington and I think it’s a big concern,” the CEO said. “We’re going to see some markets go up as much as as 100 percent.”
Continue reading “More Signs of Rate Shock and Awe”
Filed Under: Health Plans, THCB
Tagged: Aetna, CBO, Health insurance, health insurance premiums, Mark Bertolini, premium hikes, Robert Laszewski
Dec 13, 2012
What will health insurance cost in 2014?
Will the new health insurance exchanges be ready on time or will the law have to be delayed?
There Will Be Sticker Shock!
First, get ready for some startling rate increases in the individual and small group health insurance marketplace due to the changes the law dictates.In a November 2009 report, the CBO estimated that premiums in the individual market would increase 10% to 13% on account of the health insurance requirements in the ACA. In the under 50 employee small group market, the CBO estimated that premiums would increase by 1% to a decrease of just 2% compared to what they would have been without the ACA. All of these differences in premium would be before income based federal subsidies are applied to anyone’s premiums.
In recent weeks, the Obama administration issued a series of proposed regulations for the health insurance market. Since then, I conducted an informal survey of a number of insurers with substantial individual and small group business. None of the people I talked to are academics or work for a think tank. None of them are in the spin business inside the Beltway. Every one of them has the responsibility for coming up with the correct rates their companies will have to charge.
Hold onto your hat.
On average, expect a 30% to 40% increase in the baseline cost of individual health insurance to account for the new premium taxes, reinsurance costs, benefit mandate increases, and underwriting reforms. Those increases can come in the form of outright price increases or bigger deductibles and co-pays.
Filed Under: Commentology, Health Plans, THCB, The Business of Health Care
Tagged: CBO, Health Insurance Exchanges, individual market, Premium, Robert Laszewski, Small Group
Dec 5, 2012
The Obama administration just released another set of regulations, the “Draft Notice of Benefit and Payment Parameters for 2014.”
Among many other things in the 373 pages, they have announced their proposed assessments to cover the cost of running the federal exchange.
In order for the feds to administer the new insurance exchanges, they have proposed a fee of 3.5% of premium on each insurance policy sold in the exchanges (page 224).
This from the Kaiser Foundation 2011 “Primer” on Medicare:
“The costs of administering the Medicare program have remained low over the years––less than 2% of program expenditures.”
Many times over the years I have heard from advocates of a single-payer Canadian-style health plan that Medicare proves the federal government can do it cheaper than the private sector and should therefore take it all over.
So much for the notion that the feds are the model of insurance efficiency.
Under the new health care law’s Minimum Loss Ratio (MLR) provisions, insurance companies are limited to no more than 20% of premiums for expenses in the small group and individual markets.
Continue reading “Inside Baseball: Getting the Federal Exchange Right”
Filed Under: Health Plans
Tagged: Economics, federal exchange, Minimum Loss Ratio, Robert Laszewski
Dec 2, 2012