Only 16 states and the District of Columbia established state-based health insurance marketplaces in 2014, the first year of the Affordable Act Act’s major insurance expansions. These states cited numerous advantages, including greater autonomy over policy decisions and easier coordination with Medicaid. They used that flexibility to accomplish policy goals like improving consumer choice and health plan quality. However, the failure of information technology (IT) systems to reliably carry out basic marketplace functions upstaged more ambitious goals in many states.
As states plan for 2015, IT fixes have dominated operational decisions, and few states have moved to establish their own marketplaces or make bold policy changes. Arkansas remains the only state with a federally run marketplace to have enacted legislation granting it the necessary legal authority to establish a state-based marketplace. Only one state with a previously federally run marketplace—Mississippi—has opened its own small-business SHOP (Small Business Health Options Program) marketplace since last year.
Information Technology Transitions
For the 2014–15 open enrollment period, at least seven states—Hawaii, Idaho, Maryland, Massachusetts, Nevada, Oregon, and Vermont—will be using a different information technology platform or vendor than last year. See the table below for more about these transitions.
State-Based Marketplace IT Platforms for Individual Market, 2015
| Information technology platforms for 2015 | States |
|
Changing IT platform or vendor: |
Hawaii,* Idaho, Maryland,* Massachusetts,* Nevada, Oregon, and Vermont* |
|
Maintaining or adopting state-based IT platform: |
California, Colorado, Connecticut,1 District of Columbia, Hawaii,* Idaho,2 Kentucky, Massachusetts,* Minnesota, New York, Rhode Island, Vermont,* and Washington |
|
Maintaining or adopting federal IT platform: |
New Mexico,3 Nevada,4 and Oregon |
|
Adopting another state’s (Connecticut’s) IT platform: |
Maryland |
Note: IT platforms are shown for individual marketplaces only. Mississippi, New Mexico, and Utah have state-based IT platforms for their Small Business Health Options Program (SHOP) marketplaces and use the federal IT platform for their individual marketplaces.
* Maintaining state-based platform but changing IT vendor.
1 Connecticut is marketing the expertise of its people and the processes it has developed to other states through a separate business, Access Health Exchange Solutions, in an effort to lessen the cost of development for states seeking to transition from the federally facilitated marketplace, and to help sustain Access Health CT. It also is offering its technology to those states looking for lower cost and faster deployment.
2 Idaho is newly adopting a state-based IT platform for 2015.
3 New Mexico had planned to build a state-based IT platform, but opted to continue using the federal platform for an additional year.
4 Nevada originally planned to procure another state’s IT system for 2016 after using the federal IT system for 2015, but abandoned that plan because of concerns about cost and timing.
Source: Authors’ analysis.
What Do Information Technology Transitions Mean for Marketplace Operations?
Transitions in IT platforms will necessitate changes to marketplace operations. Consumers’ and insurers’ experience with the marketplaces during the next open enrollment period will in part depend on states’ effectiveness in implementing these “behind the scenes” changes.
Eligibility and enrollment: Establishing a state-based marketplace gave states the opportunity and funding to develop a streamlined information technology solution to provide a “one-stop-shop” for enrolling in Medicaid, the Children’s Health Insurance Program (CHIP), or a private health plan. Although state-based marketplace IT systems differed in the degree to which this occurred, most built a system designed to provide a single point of entry and minimize transfers of consumers’ applications between Medicaid/CHIP agencies and the marketplace.
By contrast, states with federally facilitated marketplaces had to rely on transfers of Medicaid/CHIP applications from the federal marketplace to enroll eligible people in Medicaid/CHIP, a process that was delayed in 2014 because of ongoing technological problems. The transition to a “supported state-based marketplace” in Nevada and Oregon, in which these states maintain core functions but use HealthCare.gov, means that Medicaid/CHIP application data will need to be transferred from the federal IT system to the states, as currently occurs with the federally run marketplaces.
Plan renewals: As state and federal policymakers consider how best to help marketplace enrollees renew their coverage, transitions between IT platforms may complicate the plan renewal process. For example, Idaho’s marketplace (Your Health Idaho), citing delays in receiving data on its 76,000 marketplace enrollees from the federal HealthCare.gov platform to its new state-based platform, is creating accounts for individuals currently covered through HealthCare.gov and asking them to verify their information to ease the renewal process. Maryland and Massachusetts, which are obtaining new state-based IT systems, will require individuals to resubmit applications for coverage.
Health plan IT connections: In states that are transitioning IT systems, insurers that do not already have a connection to HealthCare.gov must establish one if they wish to continue selling marketplace plans. In Oregon, for example, five of the 16 insurers selling through CoverOregon in 2014 did not already have an existing connection to the federal marketplace.
State-specific policy decisions: New information technology platforms may not be flexible enough to carry out some of the state-specific policy decisions states made last year. For instance, Massachusetts’ and Vermont’s decisions not to migrate to the federal marketplace were based in part on their desire to maintain unique programs to provide additional premium subsidies to consumers in their states, which would not have been possible through the federal platform; meanwhile, Maryland will be able to adopt some, but not all, features of Connecticut’s technology.
Looking Forward
Although born out of painful necessity rather than deliberate planning, efforts by state-based marketplaces to adopt new technology solutions could help future state-based marketplaces avoid the daunting task of developing marketplace IT from scratch—particularly when federal funding for establishing a health insurance marketplace is unavailable next year. In the short term, smooth transitions between information technology platforms—as well as fixes to existing ones—will be crucial as states ready themselves for the next open enrollment period. In the long term, more states may feel emboldened to make improvements that go beyond the basics as marketplace technology continues to stabilize.
