This week, the health insurance marketplaces created by the Affordable Care Act are open for business, introducing people who are uninsured or who buy coverage on their own to a new way to shop for coverage. For an estimated 7 million individuals in 2014—rising to 25 million by 2018—these marketplaces will serve as the gateway to an unprecedented set of consumer protections and level of coverage. Many people buying through the marketplaces will be eligible for financial help to reduce their monthly premiums and out-of-pocket costs. Millions more will gain access to public coverage—Medicaid and the Children’s Health Insurance Program—through the marketplace.
Achieving the vision for marketplaces as a seamless one-stop shop for obtaining coverage will largely depend on new IT systems that operationalize numerous policy and logistical decisions, provide real-time eligibility assessments, enroll people in appropriate coverage, and ensure premiums are paid correctly. Getting these systems right—under very tight deadlines—is an enormous task. Like all new start-ups, the marketplaces are sure to experience glitches, especially right after launch.
Similar concerns arose during the rollout of the Medicare Part D prescription drug benefit program in 2005. For example, transitioning low-income Medicare beneficiaries from Medicaid drug coverage to Part D involved data exchanges among states, the Centers for Medicare and Medicaid Services, and private drug plans. Before Part D launched, many observers worried that the data transfers would not work as required. And in fact, at first, they didn’t. Some beneficiaries learned at the pharmacy counter that their subsidy was not recognized by the pharmacist’s IT system, or that their prescribed drug was not covered by their plan.
In response, federal and state officials and insurer representatives cooperated to provide workarounds and temporary patches while the systems were improved. Today, the Medicare Part D program has become a core part of Medicare and a popular benefit among seniors, delivering lifesaving drugs to millions of beneficiaries.
Similar administrative and IT-related glitches will undoubtedly affect the marketplaces. To allow for the smoothest possible rollout, some states and the federal government have announced they will phase in certain features of their marketplaces. For example, in Vermont consumers will be able shop, compare, and select a plan starting October 1 but will have to wait until November to pay electronically for their policies. Small businesses in states with federally managed SHOP (Small Business Health Options Program) exchanges will also have to wait until later in the fall to enroll online, although they will be able to compare plans and send in a paper application starting October 1.
In Oregon, consumers will initially be referred through Cover Oregon’s website to an insurance agent or enrollment assister—known in the state as a “community partner”—to enroll in a policy rather than being able to sign up directly. In the District of Columbia, which is refining its system for automatic eligibility determinations, trained experts will work one-on-one with people who may be eligible for Medicaid and make an eligibility determination so that people can be enrolled as quickly as possible. People eligible for premium subsidies will be able to create an account on DCHealthLink and review plan options, and will receive their eligibility determination in early November.
For the federal government and each of these states, there is infrastructure in place to identify bugs and resolve them as quickly as possible. And more importantly, there has been no suggestion of any delay in the actual date coverage will begin—January 1, 2014.
For consumers who have long been shut out of the insurance system because of a preexisting health condition or an inability to afford insurance that covers their medical needs—or for those who have previously experienced long waits and administrative barriers to enrolling in Medicaid—the marketplaces open the door to a new era of consumer-focused health insurance. While problems are to be expected initially, people who need health insurance should not be deterred from exploring their options and enrolling in coverage this fall.