States with dysfunctional insurance exchanges
are running out of time to decide how to proceed for the 2015 open enrollment period. Less than six months remain until the next signup window opens.
In recent weeks, a few states with the most troubled exchanges—Hawaii, Massachusetts, Maryland, Nevada and Oregon—have made decisions about how to move forward.
Nevada's exchange has had so many problems that it drew a class-action lawsuit
. Roughly 200 plaintiffs who thought they had signed up for coverage but were not actually enrolled are seeking damages. The state extended the open enrollment period through the end of May to allow residents who experience technical difficulties to sign up, but problems persist.
Larry Harrison, a Las Vegas-based insurance broker, said he had a client just this week who was trying to sign up for a plan that would cost $85 a month after subsidies through the exchange. She wanted to replace a COBRA plan that was costing $650 a month. But she couldn't get through the system owing to technical difficulties.
“It's Russian roulette,” said Harrison, who serves on the board of the Nevada chapter of the National Association of Health Underwriters. “Sometimes it works and sometimes it doesn't.”
On Tuesday, the Silver State Health Insurance Exchange's board voted unanimously to ditch Xerox
as its lead vendor in building the exchange. Nevada will instead rely on HealthCare.gov
for 2015 enrollments, joining Oregon in opting to use the federal technology for the next sign-up period.
“Everybody's thrilled that finally there has been some action taken,” Harrison said.
Nevada isn't giving up on eventually having a fully functioning state exchange. It has agreed to adopt the software developed for Connecticut—which had one of the most successful enrolment periods in the country—for 2016. It will join Maryland in opting to use the enrollment platform created by Access Health CT.
The board of Maryland's exchange also voted this week to give up on building a separate insurance marketplace for small businesses. Instead, it will rely on existing resources available through brokers to sign up companies for coverage.
Skepticism remains high about whether Maryland can create a functional online marketplace. “I will not be happy until I see something that works,” said Alan Schulman, an insurance broker in Rockville, Md. “I'm a bottom-line guy.”
Massachusetts is proceeding on a two-track path. It's trying to rehabilitate its troubled state exchange while preparing to use the federal exchange for the 2015 enrollment period, if necessary.
Hawaii is alone among the states with the most dysfunctional exchanges in opting to stay the course. The state ranked dead last in terms of meeting enrollment projections, according to an analysis by Avalere Health
, but will hope for better results for 2015.
Even if states opt to scrap their dysfunctional exchanges, their troubles might not be over. A federal grand jury is investigating Oregon's disastrous website and whether state officials misled the federal government to continue receiving grant dollars. On Tuesday, the Oregon governor's office released subpoenas from the U.S. attorney's office
seeking records of communication between top exchange officials.
And during a confirmation hearing this month, HHS secretary nominee Sylvia Mathews Burwell told legislators that she plans to wield the “full extent of the law” to recapture federal funds misspent on dysfunctional exchanges.
Coventry had the highest percentage of competitively priced plans for sale through the state and federal exchanges, according to an analysis by Avalere Health
. More than half of the Aetna-owned health plan's products were priced at or below the second lowest cost silver plan on exchanges. Humana had the next highest share of competitively priced plans (45%) followed by WellPoint (38%). At the other end of the spectrum: Only 7% of Cigna's exchange products were priced competitively. Roughly two thirds of consumers opted for silver plans, which are designed to cover 70% of medical costs, during the recently completed open enrollment period.
Insurers are spending a higher percentage of premiums on medical care since the passage of the ACA, according to an analysis by the Senate Committee on Commerce, Science and Transportation
. Under the healthcare law, insurers must spend at least 80% of premiums on healthcare costs in the individual and small-group markets and 85% in large-group coverage. If they fail to do so, they have to refund the excess revenue to customers. In the individual market, the medical-loss ratio for health plans increased from 77.8% in 2011 to 81.2 % in 2012. For the small-group market, the ratio increased from 77.2% to 77.7%. And in the large-group market it went from 84.0% to 85.2% Follow Paul Demko on Twitter: @MHpdemko