“It’s harder to…

“It’s harder to rehab your house while you’re still living in it”: How the state that inspired Obamacare failed to implement Obamacare

When the Affordable Care Act’s various exchanges opened for business in late 2013, millions flocked to take advantage of these new health insurance platforms. But for one state, this was old news.  Massachusetts had long before implemented their own version of healthcare reform- in fact, the major principles of Obamacare were largely borrowed from it.  These principles being:

  • expanding coverage to all citizens, regardless of pre-existing conditions
  • requiring all citizens to be covered, also known as the “individual mandate”
  • providing financial assistance to lower income individuals and families to help pay their premiums

Given that Massachusetts already had a program extremely similar to Obamacare, one might expect the transition would be smooth, if not flawless.  Nothing could be further from the truth. Last week Massachusetts announced it would be scrapping its exchange, in favor of either an entirely new contractor or merging with the federal Healthcare.gov site.  What went wrong?  Vox.com examines today. They found several issues

“It was a management failure. Like the federal system, the state should have thrown the best IT support into it.” says Don Berwick, a current Massachusetts candidate for governor and former Obama administration healthcare implementation overseer. Massachusetts went with contractor CGI to build the exchange- the same contractor behind the initial failure of Healthcare.gov.  The state had trouble converting its subsidy system, which was entirely paper-based, to comply with Obamacare’s requirement of a real-time subsidy determination.  

“In some ways it’s harder to rehab your house when you’re still living it,” says Jon Kingsdale, the Connector’s first executive director.  State exchanges with the opportunity to start from scratch may have found the process easier than adapting existing systems and technology to legislation that was largely similar but different enough to cause fatal issues.. On the other hand, Oregon had that opportunity and completely blew it.

So how can it be fixed? Right now, Massachusetts ranks 49th in the nation in the number of actual insureds vs. eligible insureds at 12.2%, well below the national average of 28%.  Much of this can be attributed to the failed exchange, as hundreds of thousands of individuals are insured in transitional programs meant to provide temporary coverage while the state refocuses its strategy.  The first option is to hire a new exchange builder- at an estimated cost of $121 million, in addition to the $175 million already spent on the failed exchange. The alternative is to default to the federal health exchange- quite the fall from grace for not only an early Obamacare adopter, but also its blueprint.

May 12th, 2014 by QuoteBroker Insurance Services