The coming marketplaces were authorized by the Patient Protection and Affordable Care Act to begin selling private insurance coverage in 2014. The exchanges are slated to operate in every state and their plans will cover 7 million people in their first year, according to Congressional Budget Office estimates.
Depending on state interest and ability, states are either operating their own marketplaces, doing so in partnership with the federal government or deferring the entire operation to federal officials. Cohen acknowledged the continuing possibility that a number of the 18 states trying to launch their own exchanges may have to revert to either a partnership or fully federally operated model.
“Even if that doesn't happen and some change to a partnership, there will be an exchange in every state,” Cohen said about state-run exchanges.
But even where the federal government runs the show, significant obstacles must be addressed. Missouri, for example, enacted a law last year barring state officials from helping to implement provisions of the 2010 federal healthcare overhaul, and pending legislation there would bar insurers in the state from offering plans on the federal exchange. Texas officials have made it clear they will not review filings from health insurers to determine whether the plans they want to sell in the exchange comply with the federal healthcare law.
The ultimate effect of such resistance is unclear, Kim Holland, executive director of state affairs for the Blue Cross and Blue Shield Association, said in an interview. States retain review authority over plans sold in their states, even if those plans are compliant with the federal rules.
“Even though HHS is going to make a determination about whether these plans qualify to be on the exchange, that doesn't mean that states don't still have to perform their review and approve those plans for sale,” Holland said.
Other states continue to lack the legal authority to operate exchanges, Cohen noted. New Mexico, which is pursuing a state-run exchange, has put construction of its insurance marketplace on hold pending approval from the Legislature. “In some states, that's going to take some time,” Cohen said about the needed legislative approvals.
The biggest technological challenge for states, according to Cohen, is the design and implementation of the required eligibility and enrollment systems.
Little is known about state progress on state systems necessary to validate incomes, reassess eligibility after a federal review and take action on applications.
No publicly available national assessment has determined where states stand in building their data-services hubs, which are required to allow even federal exchanges to function, said Bruce Caswell, president of the health services segment at Maximus. Caswell's company is working with three states on their exchanges and on eligibility systems for other states that will have federal exchanges.
The combination of a fast-approaching start date and long-delayed federal rules governing insurance exchanges has led states to increasingly limit the eligibility functions they are building to simply core requirements of the law, Caswell said. “The accordion has squeezed, and we're running short on time and you need to look pragmatically at what the requirements are to meet day one functionality,” he said.
The complexity of the enrollment process may also complicate the launch, according to some critics. HHS recently issued rules proposing a 21-page enrollment form for applicants looking for coverage in the exchanges.
Brian Haile, former director of the Tennessee Insurance Exchange Initiative Planning, told attendees last week at a Washington health policy meeting that the draft application was too dense for applicants to even understand basic requirements, such as their need to re-apply annually for benefits.
“The federal government expects them to internalize the message saying, 'You need to re-certify,' and they are somehow going to understand that?” Haile said.
But most applicants are unlikely to ever have to digest the 21-page document, said Henry Chao, deputy chief information officer at CMS, who spoke at the same meeting. Chao said the administration expects most applicants to use an online version that will automatically skip irrelevant sections based on the data they enter. “Very rarely will there be a person who needs to read all of it.”