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January 31, 2014 12:00 AM

Officials with successful state exchanges worry about ACA's flaws

Paul Demko
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    Officials from some of the country's most successful state-based exchanges expressed concerns Friday that their work will be undermined by flaws in the Patient Protection and Affordable Care Act if those flaws aren't corrected.

    “There are really fundamental problems in the basic law of the ACA that need to be cleaned up,” said Christine Ferguson, director of the Rhode Island Health Benefits Exchange, during an event in Washington put on by the Robert Wood Johnson Foundation. “If we don't clear them up in the next year or so, there are going to be ramifications to that.”

    For instance, Ferguson indicated that there are some problems with affordability standards for employer-based health plans that are preventing individuals who should qualify for federal assistance from accessing subsidies. In addition, some individuals who are eligible to enroll in Medicaid don't want to do so, she pointed out. But they are then unable to access subsidies to assist in purchasing private coverage.

    Mila Kofman, executive director of Washington, D.C.'s exchange, said she worries potential customers are being lost due to frustrations with the federal system for verifying identity. “It's very difficult to get through identity proofing instantly,” she said.

    Given the partisan standoff over the healthcare law, the prospects for addressing such problems legislatively would seem remote. However, some of the issues could potentially be rectified through policy changes enacted by the Obama administration.

    Friday's event featured representatives from some of the most successful online marketplaces. Some other state-based exchanges—including those in Oregon, Maryland, Minnesota and Hawaii—continue to suffer from severe problems that have hampered enrollment. Just 16 states have opted to establish their own marketplaces, rather than defer to the federal government.

    Kentucky has been among the most successful states in connecting residents with coverage. President Barack Obama praised the state for its efforts under Democratic Gov. Steve Beshear during Tuesday's State of the Union address. Nearly 200,000 individuals have now signed up for coverage through the state's exchange. Roughly three-quarters of those individuals were deemed eligible for Medicaid, while the remainder signed up for private plans. Prior to the establishment of the exchange, there were roughly 640,000 uninsured individuals in Kentucky out of a population of more than 4 million. But it remains unclear what percentage of those individuals obtaining coverage through the exchange previously lacked coverage.

    Currently, just three health plans are selling products on Kentucky's exchange. But Audrey Haynes, secretary of the Kentucky Cabinet for Health and Family Services, said that she expects more insurers to participate during the open-enrollment period for 2015. “We have heard from our managed-care plans that are owned by larger carriers that they want to come into the market,” Haynes said. “We expect our number of carriers to certainly grow and our networks to become more robust.”

    Likewise, Ferguson indicated that she expects more competition on the state's exchange for 2015 coverage. “We are definitely in conversations with other carriers to come in, and I think we'll be successful with that,” she said.

    By contrast, California is not allowing any new plans to come into the marketplace for 2015, according to Peter Lee, executive director of Covered California. The state currently has 11 carriers selling products through its exchange, but 96% of enrollments during the first three months of business went to just four firms.

    “We actually told the plans a year ago that if they wanted to be part of the individual marketplace to step up and play first year and not stand on the sidelines,” Lee said. “The plans are recognizing with us that this is not a short-term play.”

    Follow Paul Demko on Twitter: @MHpdemko

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