March 3, 2014 | Rosemarie Day

Exchanges – What Can We Make of the Launch So Far?

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It’s well known that the launch of health insurance exchanges got off to a rough start.  If exchanges were graded, the federal marketplace would have gotten an F in October.  Even the best states deserved no better than a B+.  But the semester isn’t over yet, and improvements are being made (rapidly at the federal level, less rapidly in some states), so final grades won’t be in until we wrap up open enrollment on March 31, 2014.

Being a “cup half-full person,” I’ll start with what went right, then look at what went wrong, and then give you a sense of where I think we go from here.


At the 30,000 foot level, I can see the bright side:

  • Coverage has been expanded and over 4 million people are being insured through an exchange marketplace.  That’s over half-way to the original goal of 7 million.  And we know that people procrastinate, so we can expect a last-minute flurry of enrollment activity.
  • Many of those who are now insured through exchanges were previously uninsured. 
  • It’s more than the numbers – each of those numbers represent a real person with their own story – there are many testimonials about how much getting health insurance means to people [see this Boston Globe from 1/26/14 piece for testimonials]


There were well documented “glitches” that locked people out of the exchange application process.  The root causes for these problems are many and deep.  I’ll sum it up here by saying that launching exchanges involved a very large and very complicated IT project.  They got a late start, and people underestimated how hard it would be.

One particular challenge for exchanges included creating a unified eligibility system, where there would be “no wrong door,” whether you’re applying for Medicaid or exchange subsidies.  The vision is a great one, but achieving the vision is much harder than articulating it.  Why?

  1. Getting multiple government agencies to collaborate is exceedingly difficult.
  2. The Medicaid platform in most states is archaic.
  3. Massive IT projects are not for the faint of heart – they require intense focus, take more staff time than any agency would like, and they take years to complete, even in the best of circumstances.

Yet we know from other programs that launches are often bumpy – there have been many comparisons drawn to the launch of Medicare Part D.  And it can take some time to sort out.


On the ground and below the surface, problems remain, including long wait times at call centers, too many paper processes, and delays in getting info from the federal data hub (such as identity verifications).  (Picture a duck gliding across the surface of a lake, but its feet are paddling madly underneath…)  And there are problems that haven’t fully surfaced yet, such as difficulties with billing, reconciling subsidies, and processing Medicaid enrollments.

To solve their initial problems, the feds were able to bring in a mega-SWAT team from the private sector – and they fixed a lot of things.  [For great coverage of this, see this Time article from 3/10/14 edition.]  In fact, the federal marketplace has enrolled over 2 million people across 36 states so far.

Many state exchanges have not fared as well.  Whether for lack of resources, vision, or expertise, these states are still struggling.

And yet, some states are doing quite well – if you look at enrollments as a percent of goal for the first 4 months, CT, RI, NY, and CO are all above 100%.  So it’s possible to succeed.


Being a pragmatic person, my first question is always:  how do we fix this situation in the states that are still struggling?  With less than 30 days to go until the end of open enrollment, there are no silver bullets.  The only fixes are short term ones:  hire more call center staff, encourage people to enroll directly through insurers when possible, and add temporary staff to process applications.

But it’s critical to be laying the groundwork for long-term fixes right now.  The next open enrollment starts November 15, 2014.  Here are the steps that states should be taking immediately:

  1. If a state has the wrong IT vendor, they need to get the right one.  Some vendors did better than others, consistently.  Hire those vendors and set strong expectations.
  2. If a state has the wrong people in charge of the exchange, it’s time to hire the right ones.  The exchanges need to be accountable to the public, and that includes exchange leadership.
  3. If a state has several agencies involved in their exchange IT project, they need to establish a single point of accountability for the project, and put a strong and experienced person in charge.

There’s more that needs to be done, but this is a start.  In future blogs, I’ll look further at the states that are doing well, and identify some of the things that are working there.  That could help shed light on what can be done elsewhere.

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