State-Run Health Insurance Exchanges Showing Early Success

While the federal government has grabbed headlines for slow enrollment in its health insurance exchanges, many state-run marketplaces have quietly amassed thousands of completed applications for coverage.
October 7, 2013
Natasha Buranasombati of the California State University Health Insurance Project poses with a tablet showing California's online health insurance marketplace.
Natasha Buranasombati of the California State University Health Insurance Project poses with a tablet showing California's online health insurance marketplace. AP/Reed Saxon

While the federal government has grabbed headlines for slow enrollment in its health insurance exchanges, many state-based marketplaces have quietly amassed thousands of completed applications for coverage.

Smaller state-based exchanges in particular have shown early success, with Kentucky reporting 7,000 completed applications after two days and Connecticut announcing 1,000 since its exchange went online Oct. 1 along with most of the country. Meanwhile, the federal exchange serving as a marketplace for the 34 states that chose not to create their own systems isn’t releasing official enrollment data at this point.
 
The 16 states that chose to create their own exchanges have independent online insurance marketplaces that are independently developed, locally hosted and operated. Consumers living in the other states go to a single federally hosted web page, healthcare.gov.
 
Experts and officials are attributing the relative success of some state-based exchanges to simpler design, simpler services, more thorough testing, and the obvious—the federal government’s challenge of building both an information technolgoy infrastructure that can handle the volume of so many states along with a fully functioning web portal.      
 
 
Jim Wadleigh, the chief information officer for Connecticut’s health insurance exchange, said his team is still working to make sure his servers aren’t bouncing people back on their first try, but he’s avoided serious problems through rigorous testing early. He went as far as to start testing Connecticut’s access to the federal hub that verifies key information before the official launch. 
 
“I got a lot of pushback,” he said. “A lot of people weren’t happy with me, but I was able to find some things that would’ve been a problem if we waited until Tuesday, so I got a little start on the rest of the country by being able to do that.”
 
Wadleigh also credits a task-based approach that set key deadlines, emphasized functionality and refused to move on before the assignment was through. Lastly, he limited the number of services the site would handle upon its launch, leaving plan management functions, some reporting features and other tasks for later. 
 
Kentucky officials tried to avoid overloading their system by allowing consumers—many of whom were just curious about plan offerings at first—to browse different options before filing an application, according to the Wall Street Journal.
 
Whereas Connecticut essentially offers six services through its portal, the federal government’s exchanges have roughly 14 functions, Wadleigh said. Connecticut didn’t spend time designing a function that collects premiums from consumers, instead leaving that to insurers. With the unexpected number of states choosing not to create their own exchanges and the sheer number of services on the federal exchange, it’s no wonder the system is overwhelmed right now, Wadleigh said.
 
“You’ve got more work, less time, more infrastructure,” he said. “They were dealt a tough hand.”
 
The federal government is handling two-thirds of the U.S. population; the largest state exchange, California, is dealing with 15 to 20 percent, noted Bruce Eckert, the national practice director for health care consultant Beacon Partners. 
 
“It wasn’t that long ago that some of the states made their final decision on which way to go on their health exchange,” he said. “I think healthcare.gov got saddled with more constituents than they probably were planning on. I am aware, too, that it was thrown together in somewhat of a hurry, and that often leads to these kinds of problems.” But the volume is impressive, Eckert added, and it can’t be underestimated. “Amazon.com, their first day was not Cyber Monday. They had the opportunity to grow into it.”
 
The Centers for Medicare and Medicaid Services, which is managing the federal exchange, has attributed technical difficulties to high web traffic from pent-up demand for health care, reporting seven million unique visitors in the first 48 hours of enrollment. A spokesperson said by e-mail that CMS has added more servers and engineers to improve wait times, which have fallen by one-third. 
But some question how big of a role high volume is playing in the federal exchange’s technical challenges. Robert Laszewski, president of consulting firm Health Policy and Strategy Associates Inc., said he’s tried repeatedly to sign up at off-peak hours but hasn’t been able to verify his identity in drop-down menus—a common problem for consumers. 
 
“I could understand a capacity issue one hour after lunch, but 10 p.m. at night? Six in the morning?” he said. “They’re simply not ready.”
 
With the difficulty of communicating between a home computer and federal data hubs that verify identity, income and eligibility for financial assistance in real time, glitches are to be expected, said Sara Collins, a director at the Commonwealth Fund, a health policy research group. Enrollment figures available when insurance plans go into effect will provide a better measure of success, she said.
 
“I think the key date is really January 1. People are going to be coming and checking it out,” she said. “I think we tend to underestimate how desperate people are for the health and financial security that health insurance provides.”

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