How state exchanges that suffered calamitous launches prepared for Nov. 15

After struggling with information technology in the first year of open enrollment, some states that chose to operate their own Obamacare insurance exchanges are hoping and praying that this year is different.

A few, including Nevada and Oregon, have decided to switch to using the federal HealthCare.gov website for the second year of open enrollment, which starts Saturday and runs through Feb. 15, though they will continue to operate as state-run exchanges. But a few states have chosen to try their own solutions. Experts and officials in Maryland, Massachusetts and Minnesota are expressing confidence that the enrollment experience will improve this year.

But the big question is how much better will they be? The issues are centered in three areas: the state of the technology underpinning the exchange websites; the quality of the outreach and marketing to win over uninformed or skeptical consumers; and whether political changes will undermine the exchanges' future.

Dr. Peter Beilenson, CEO of Evergreen Health Co-op in Maryland, a new not-for-profit health plan based in Baltimore, said he's confident the exchange technology will be better in Maryland, which has implemented Connecticut's successful exchange platform. In the first open enrollment, severe problems with Maryland Health Connection contributed to his plan signing up only 450 individual-market enrollees. “I've been on (the website) at least 12 times in the last day just to do the shopping,” he said. “I think it will be much, much, more effective this year than last year.”

That confidence is shared by Maryland state officials. At a board meeting Wednesday, Isabel FitzGerald, the state's information technology secretary, said “the only thing left is to go live on the 15th.” She acknowledged there might be some glitches with the code but said that she was generally confident.

Beilenson said the so-called back-end function that provides information to insurers is “much, much better tested than last year. We were literally screaming last year that you have not tested it enough. Our people, who are very cynical about it, feel much, much more confident this year.” He added that the 834 forms to insurers will work well in addition to improved traffic testing.

While Maryland Health Connection's consumer-facing website design isn't perfect, he thinks it's better this time around. The Maryland website now displays an in-network provider directory.

“Last year, the only thing that appeared was the premium,” he said. “No one had any idea what they were buying.” As a result, he believes many consumers selected plans that didn't fit their financial and medical needs, only to drop them later. By contrast, the website now has more specific information about premiums and cost sharing. And for consumers who are eligible for a federal premium subsidy, it shows the cheapest silver plan available.

Kathleen Westcoat, CEO of HealthCare Access Maryland, a not-for-profit navigator organization that helps consumers enroll, agreed the website is much improved. Her navigators have had a lot more training on the exchange website this year than last, when the state's exchange programmers were working up to the last minute. And the navigators are reporting a more consumer-friendly experience.

But Beilenson worried that he's not seeing any marketing so far this year. Last year, he said, there were jingles for the Maryland exchange running in the media every 15 minutes. This year, he hasn't seen much promotion through the mass media or social media. “I would be shocked if there's significant knowledge of this in Maryland,” he said. “The average citizen in Maryland only knows that this thing didn't work last year.” He suspects exchange officials are adopting a wait-and-see strategy: if the exchange is working well, then they'll make a media push to promote the exchange.

Gene Ransom, CEO of the Maryland State Medical Society, said that while he's “cautiously optimistic” about the state's new improved exchange website, he's “very concerned” about getting the word out to the public about enrolling and re-enrolling.

The Maryland exchange board seems to think awareness is improving. According to minutes of the Sept. 16 meeting, the board commissioned a consumer survey showing strongly improved public opinion about the exchange. Based on its 800-person survey, awareness of the exchange had improved by 30 points, to 39%, with improved favorability results as well.

But Beilenson doesn't buy it. “There's no way that's possible,” he said, citing a Kaiser Family Foundation survey finding overwhelming ignorance nationally of the upcoming enrollment.

When asked whether the Maryland exchange had reduced its marketing, the exchange's director of marketing and outreach, Andrew Ratner, said that “you're trying to husband your resources where you can get the most bang for your buck. Putting it out early, before people could act on it—you don't have a bottomless trough of resources to be able to do that,” he said. He believes consumers will wait until closer to the enrollment deadline to sign up.

Maryland's marketing budget is reduced this year from about $7 million to $4 million, Ratner said. And the length of the enrollment period has been reduced from six months to three. “In a sense, you're trying to do twice as much with half as much,” he said.

Ratner is trying to husband his agency's resources more carefully this time around. The state handed out nearly $450,000 in social media marketing to public relations firm Weber Shandwick this year, and he's eager to see the results. He hopes to see more educational material, as well as an improved ability to respond to consumer feedback.

The Maryland exchange is closely coordinating its advertising strategy with its on-the-ground outreach. It will be increasing its enrollment fairs from 4 last year to 24 this year. The state will focus media buys around the scheduled fairs.

Westcoat is excited about the fairs. Her organization will be leading five of these events, compared with three during the first open enrollment. In addition, her organization is opening up storefronts, which plays into its new targeting strategy. Last year, the organization was successful in targeting people eligible for the state's expanded Medicaid program. This year it will target people to purchase private plans.

In Minnesota, the technical and political future of the state exchange, MNSure, appears more troubled. The exchange has been bedeviled by glitches and scandals since its launch last year. The state's office of the legislative auditor has released two reports in the past few weeks faulting the exchange.

In the first, released Oct. 28, the auditors detailed several failures of financial management and accounting. As a result, the exchange paid nearly $930,000 in additional unapproved marketing expenses, on a contract originally worth nearly $670,000, among other problems. In the second report, released Nov. 12, the auditors faulted the exchange's eligibility systems, with several reports of misclassified consumers and improperly calculated premiums.

The exchange also was hurt by the recent exit of its most popular insurer, provider-owned PreferredOne. Through Oct. 28, nearly 56,000 consumers purchased private coverage through the exchange. Of those enrollees, PreferredOne had about 32,000.

Some Republican lawmakers warn that the exchange's financial self-sustainability could be in trouble if the exchange doesn't recapture those PreferredOne consumers. The Patient Protection and Affordable Care Act requires that starting in 2015, state-run exchanges must be financially self-sustaining in their operations. “I'm concerned about the self-sustainability of the exchange, particularly because we had so few people enroll,” State Sen. Michelle Benson said.

State Rep. Greg Davids agreed. Because of the Republicans' capture of the Minnesota state house in the Nov. 4 election, Davids expects he'll become chair of house tax committee. If that happens, Davids said he will call for an investigation of the exchange's financial viability. “We're going to be putting some strong investigating into, 'Is this sustainable? Can we continue to do this?'” he said. “I think I know the answer already.”

Roger Feldman, a health economist at the University of Minnesota, agreed that the exchange's financial self-sufficiency might be an issue.

Still, Davids and Benson were lukewarm about the possibility of shifting from the state-run exchange to the federal HealthCare.gov. exchange. “If we have to make the move, we have to make the move,” Benson said. “I can't see spending any more money on MNSure. She expressed concern, however, about data security on the federal website.

Davids said he expects the U.S. Supreme Court next year to invalidate federal premium subsidies through the federal exchange, which would make it non-viable to switch from a state-run exchange to HealthCare.gov.

It's uncertain to what degree MNSure will function better this year, despite a vendor switch to Deloitte to operate the website. Heidi Michaels, president-elect of the Minnesota Association of Health Underwriters, said she's not feeling confident. That's because of shifting rhetorical priorities from exchange officials. At first, MNSure officials offered a list of 33 priorities that would address failings from the first exchange, with a particular focus on backend functions that send information from the website to insurers and the government. Now the exchange officials are focused on the performance of the website's consumer-facing features.

But the 834s have been an enormous problem, she said. “The health plans say they get fragmented records, where they'll get a record with only a first name,” she said. “Or only one line of an address. No phone numbers. No way to contact these individuals.”

Benson, a member of MNSure's legislative oversight committee, agreed about the shifting focus in priorities. Still, she thinks the consumer experience will be better than last year, though that's a low standard to clear. Nevertheless, she still expects glitches, requiring manual processing of 834s and forms for change-of-life circumstances.

An MNSure spokeswoman declined to respond to questions, referring Modern Healthcare to the minutes of exchange board meetings.

MNSure is beefing up its outreach and marketing capabilities. The University of Minnesota's Feldman thinks that's the right move, arguing that the outreach strategy will be critical. He argues that the California exchange's relative success in enrollment was at least partly due to aggressive and creative outreach.

But Michaels is less optimistic about the impact of the increased number of new MNSure enrollment workers, given the complexity of helping consumers sign up for insurance. “I have 20 years of experience,” she said. “When I call with a question, it's not typically a simple question. It's hard for me to envision that a person with less than a year of experience is going to be more informed and better able to answer my questions,” she said

In Massachusetts, officials of the Health Connector are expressing confidence about the performance of their exchange, which surprised everyone with the severity of its dysfunction during the first open enrollment given the state's experience operating the Connector since 2007. Jonathan Gruber, an economics professor at the Massachusetts Institute of Technology who sits on the board of the Connector, said that while he “still has a little PTSD” from last year's rollout, he's generally confident about the exchange's performance overall.

Indeed, he expects the Connector to perform much better than originally planned in its automatic linkage with Medicaid and with private insurers. “It looks like they've got it working,” he said. “It's very exciting.”

This year, the Connector lacks the consumer “window-shopping” feature that other exchanges have, and Gruber would like to see more consumer decision support functions, he said. And he's not sure whether the Connector will offer consumers up-to-date information on plans' provider directories.

Lisa McTighe, communications and outreach director for Minuteman Health, a new not-for-profit co-op plan, also expressed optimism about the Connector's performance this time around. Based on her plan's testing of the consumer part of the website, she said the site and its outreach materials are much clearer for the consumer.

Ed Lyons, who wrote a 31,000-word autopsy of last year's Connector failures, also voiced confidence. “It appears that they have their act together this time,” he said, citing increased testing and a new vendor. He also believes that Republican Gov.-elect Charlie Baker will apply more effective oversight.

But some worry about the backend part of the Connector. Joshua Archambault, the director of health policy at the Pioneer Institute, a conservative think tank in Boston, said he's concerned about the system's backend capabilities based on his conversations with insurers. “If somebody signs up starting on Saturday, and they have a kid or they moved or they have to change health plans during open enrollment, the state doesn't have that functionality” to change the information online yet, he said.

Archambault argued that the state did not sufficiently shake up the Connector's management team, despite a new overseer from the governor's office and a new vendor.

Gruber conceded that the Connector's online information-changing capability isn't ready yet. “My understanding is that if folks make a mistake (in entering) their information and don't realize it before they log out, they can call and fix it by phone,” he said. “But online fixes for that won't be available until a month in. Hardly a crisis.”

He said he's confident the 834s will be working better this year than last. Insurers aren't complaining this year based on current testing, while they were “appropriately loud” in making their concerns known during the previous open enrollment, he added.

Massachusetts also is expanding its consumer outreach this year. The state placed consumers who had trouble purchasing private insurance on the exchange in a transitional Medicaid plan. Gruber thinks a more aggressive marketing push is necessary to ensure no one in that group becomes uninsured.

He hopes every state is similarly aggressive in reaching out to consumers and encouraging them to return to the exchanges and shop around and compare plans before re-enrolling. “This competitive marketplace only works if people are active shoppers,” he said.

Follow Darius Tahir on Twitter: @dariustahir