The Corner

About Those ‘Functioning’ State Exchanges

As, the federal insurance exchange being used in 36 states, continues to face problems, things aren’t going as smoothly as we think in the states running their own marketplaces. First, the state of Massachusetts is starting to worry about its system. The Boston Globe reports:

With three weeks left in the year, not one of the thousands of Massachusetts residents who need to enroll in new health insurance plans by Jan. 1 has been able to do so through the state insurance marketplace that was revamped to comply with the national Affordable Care Act.

About 126,000 people enrolled in health plans subsidized by the state have until March to choose a new plan and can keep their current coverage until then. But thousands of others are depending on a new plan to start on the first of the year, and some worry that their coverage will not be ready in time. Their anxiety has only been heightened by stubborn technical problems, such as a snag this week that blocked many people from signing in to the website.

Here are some of the problems people who are trying to enroll are facing:

Kamentsky was first stymied by the widespread technological problems. At the end of October, she filed a paper application. She has been stuck since then in a shuffle of documents and on long calls with customer support staff, but she feels no closer to being enrolled.

“There’s no feedback,” she said. “There’s no way to tell if anything has been processed. Time is ticking away.”

 More than 32,000 people have been able to complete an application. Only about 1,700 have selected a health plan.

A small number have been able to submit payment information online, bringing them near full enrollment, but the state will not process those payments until Dec. 23. . . .

Many people who applied for a subsidy are in a holding pattern, waiting for the Connector Authority to verify their eligibility so they can shop for a plan.

I guess we shouldn’t be too surprised. Look who built the website:

The $69 million website was built by CGI, which helped develop the much-maligned federal health insurance site, The Health Connector website, by communicating with federal databases and the state Medicaid program, was meant to give users a place where they could find out which insurance subsidies they qualify for. But that function of the website has not worked.

And you know which other states are having problems and got their exchanges built by CGI? Hawaii, for one:

CGI Technologies and Solutions, Inc., another subsidiary, had been responsible for overhauling the IT systems for the Hawaii tax department, and then, developing its new delinquent tax collection services. Not only was the software and implementation problematic, but the second contract, signed in 2009, paid CGI millions for work it did not complete, according to a state audit completed in 2010 on the matter

Still, they hold contracts all over the Hawaii government. Hawaii’s Health Connector, the state’s new health exchange for providing insurance options under ObamaCare, hired CGI to build its website. Like, the Hawaii portal had immediate problems when it launched on Oct. 1, but those have since been rectified and so far, according to Health Connector officials who spoke with, they are not blaming CGI. 

And Vermont:

Meanwhile, the state of Vermont is reportedly considering whether to penalize CGI for not meeting its deadlines for designing and producing Vermont’s health care exchange, Vermont Health Connect, which is also experiencing the same kind of glitches as the federal system. In that case, the state recently signed an amended $84 million contract with CGI — just $9 million less than the one it signed with the federal government in 2011. In late September, reported that CGI failed to meet 21 deadlines this summer and the state could charge as much as $125,000 a day in penalties as a result. 

Other state exchanges are facing problems too. Here is Washington State:

While Washington’s health exchange website – – has fared far better than the federal government’s multi-state site, it has not fully resolved its own nagging performance issues.

The site was taken down for repair at about 2 p.m. Tuesday and remains down.  The website is not expected to be available until Monday at the earliest. . . .

Update, 2 p.m. Friday: The website remains down for repair.  At 1 p.m. Friday, the Washington Health Benefit Exchange, which manages the site, posted the following statement: “This week, Washington Healthplanfinder customers experienced intermittent slowness and even brief outages as they attempted to complete applications online. To address these issues as quickly as possible, we have brought the site down so that we may better troubleshoot and conduct necessary maintenance.”

The exchange has not given any estimate of when the site will be available to consumers.

 Even Maryland, a state Democratic governor Martin O’Malley hoped to make a role model, is facing real problems:

In recent weeks, the lagging enrollment and online glitches have embarrassed the administration of Gov. Martin O’Malley (D) and become a political liability for Lt. Gov. Anthony G. Brown (D). Brown, who is seeking to succeed O’Malley, has taken a leadership role in implementing the federal health-care law in Maryland.

The technological problems with Maryland’s exchange have been particularly problematic because the state was among the earliest and most aggressive in embracing the health-care law.

Here is Oregon:

Technical problems with Oregon’s online health insurance exchange have been an embarrassment to the state and forced people to sign up using paper applications. The state has scrambled to hire or reassign nearly 500 people to process applications by hand.

King has said Oregon set out to build an unusually complex exchange and didn’t have enough time to do adequate testing. Experts warned for months that Oregon was trying to do too much and risked missing the deadline to launch, but Cover Oregon officials refused to dial back their plans.

For two months, Oregon was unable to enroll a single person. Officials announced Monday that the first 219 people have enrolled in private insurance. About 3,200 have enrolled in Medicaid.

Last but not least, we have  the Washington, D.C., exchange, which is plagued by hundreds of problematic applications, long wait times, and more:

The District’s online health-insurance exchange is grappling with “hundreds” of problematic applications from shoppers unable to enroll in health plans because of system error messages, an exchange spokesman said Friday.

Exchange officials are in the process of identifying the account holders and contacting them, said Richard Sorian, a spokesman for DC Health Link. Most of the problems appear to stem from duplicate accounts that shoppers may have created inadvertently.

While no one has yet been fired at the federal level, three state-exchange directors (Oregon, Maryland and Hawaii) “resigned” over the embarrassing performances.



Veronique de Rugy is a senior research fellow at the Mercatus Center at George Mason University.

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