States Look to Avoid Federal Obamacare Payments

The fed­er­al gov­ern­ment is poised to start mak­ing state-based ex­changes pay for us­ing Health­Care.gov’s tech­no­logy, and that has some states mulling the pos­sib­il­ity of shar­ing ser­vices with oth­ers to con­trol costs.

The Cen­ters for Medi­care and Medi­caid Ser­vices pro­posed a rule last year re­quir­ing that cer­tain states es­sen­tially “lease”Health­Care.gov through a user-fee rate of 3 per­cent of the monthly premi­um the is­suer charges for each policy plan—mean­ing that, for the first time, us­ing the fed­er­al plat­form for state-based mar­ket­places won’t be free.

Last month, mar­ket­place of­fi­cials from sev­er­al states gathered in Port­land, Ore­gon to dis­cuss the rule, in­creased col­lab­or­a­tion, and long-term mar­ket­place af­ford­ab­il­ity and sus­tain­ab­il­ity—a con­ver­sa­tion es­pe­cially per­tin­ent to some states, such as Ore­gon and Nevada, that use Health­Care.govto sign up con­sumers but main­tain con­trol over their mar­ket­place.

States are left weigh­ing the pos­sib­il­it­ies: Do they share an­oth­er state’s vendor tech­no­lo­gies? How do they take ad­vant­age of ex­change soft­ware that’s already been built? Or is it cheap­er to pay the fee?

Some are talk­ing to one an­oth­er about ser­vices they could share, such as tech­no­lo­gies, call cen­ters, and mar­ket­ing strategies.

“We’re look­ing for op­tions that might be avail­able,” said Bruce Gil­bert, the ex­ec­ut­ive dir­ect­or of Nevada’s Sil­ver State Health In­sur­ance Ex­change. “I don’t see [Health­Care.gov], giv­en their pri­cing struc­ture, as a vi­able, long-term part­ner for a state like Nevada.”

Ore­gon is an­oth­er state con­sid­er­ing the costs. “I think we’ve known the fed­er­al gov­ern­ment was go­ing to be­gin char­ging for the tech­no­logy,” said Berri Leslie, Ore­gon Health In­sur­ance Mar­ket­place ad­min­is­trat­or, “but we didn’t know how much. And so I think see­ing the amount of the costs is cer­tainly driv­ing people to try and be in­nov­at­ive and cre­at­ive.”

Be­cause of the pro­posed user-fee rule, Ore­gon put out a re­quest for pro­pos­al in Decem­ber seek­ing a tech­no­logy plat­form for a state-based in­sur­ance mar­ket­place. The state hopes not to cre­ate a whole new tech­no­logy solu­tion, but rather to ana­lyze the cost and cap­ab­il­it­ies of what’s cur­rently on the mar­ket. That way, Leslie said, Ore­gon’s le­gis­lature can have the dif­fer­ent price points in hand when de­cid­ing wheth­er to stay on Health­Care.gov (and pay the new fee) or switch to a dif­fer­ent plat­form—data that could be il­lu­min­at­ing to oth­er states con­sid­er­ing the same thing.

“The out­come of our pro­cess will really in­form wheth­er or not the fed­er­al cost is really af­ford­able or reas­on­able giv­en what else is on the mar­ket­place,” Leslie said. “So I think oth­er states are watch­ing Ore­gon’s pro­cess pretty care­fully.” 

For user fees, CMS is al­lowed to col­lect only “the amount ne­ces­sary to cov­er the cost of unique ser­vices/be­ne­fits provided through the pro­gram as­sess­ing the fee,” CMS spokes­man Aaron Al­bright wrote in an email. He ad­ded that the agency is con­sid­er­ing re­du­cing the rate for 2017 to “ease the trans­ition for states.”

New Mex­ico is look­ing at leas­ing the fed­er­al site, but the state’s his­tory is dif­fer­ent than those of Ore­gon, Hawaii, and Nevada—the three oth­er state ex­changes that use the fed­er­al plat­form. Their sys­tems were plagued with tech­no­lo­gic­al glitches or wer­en’t fin­an­cially sound, for­cing them to switch to Health­Care.gov. But New Mex­ico began us­ing the fed­er­al web­site with the in­ten­tion of mov­ing to its own tech­no­lo­gic­al plat­form. In 2014, CMS no­ti­fied New Mex­ico that its state mar­ket­place, which hadn’t yet launched, was non­com­pli­ant. So, the idea was put on the shelf.

While Amy Dowd, CEO of Be Well NM, said she has con­cerns about the cost and the pay­ment mech­an­ism, New Mex­ico isn’t in any act­ive dis­cus­sions with vendors. At this point, it isn’t con­tem­plat­ing do­ing so. First, the state wants to see the fi­nal rule, which—if last year’s pre­ced­ent for the an­nu­al rule serves as an in­dic­at­or—won’t be out un­til late Feb­ru­ary.

Dowd did at­tend the Decem­ber meet­ing that dis­cussed the pos­sib­il­ity of shar­ing ser­vices, but not ne­ces­sar­ily to get on the ground floor of a po­ten­tial part­ner­ship. “My in­terest in at­tend­ing the meet­ing was to hear from my peers about how each state-based ex­change is ap­proach­ing the chal­lenge and to take any les­sons learned back to New Mex­ico,” she said.

Oth­er state-based mar­ket­places, such as the one in Wash­ing­ton, are happy with the tech­no­logy they cre­ated to sign up in­sur­ance en­rollees. Still, they’re look­ing at ways to part­ner with oth­ers in at­tempts to drive down the costs. (States are no longer get­ting fed­er­al funds to help them run their own ex­changes.)

There are myri­ad pieces to this com­plex puzzle, said Mi­chael Marchand, Wash­ing­ton Health Be­ne­fit Ex­change dir­ect­or of com­mu­nic­a­tions and out­reach. States are try­ing to fig­ure out how they could save both fin­an­cially and op­er­a­tion­ally, which in­cludes the pos­sib­il­ity of cre­at­ing part­ner­ships.

“We con­tin­ue to have these con­ver­sa­tions with states,” said Marchand, who at­ten­ded the Port­land meet­ing, “and it’s in­ter­est­ing be­cause, again, we’re all in the same boat. We want to do the best pos­sible job we can for our state and our res­id­ents, but we also want … to be good stew­ards of the tax­pay­er dol­lar. And if we can find a way to work with someone to help lower those costs and still provide that great cus­tom­er ex­per­i­ence or that great op­er­a­tion­al solu­tion to an is­sue, we’re go­ing to do it.”