STATE HOUSE, BOSTON, JUNE 12, 2014……Massachusetts health officials face an early July deadline to prove that their new plan to develop a functional online health insurance enrollment portal can be operational by the fall, or else the state could be forced by the Obama administration to join the federal exchange for at least a year.
In response to the deeply troubled rollout of the state’s online health marketplace, Gov. Deval Patrick and his team developed a dual-track strategy to try for a second time to build a state-based exchange with an off-the-shelf software product made by Virginia-based hCentive.
Health Connector officials since early May have been simultaneously preparing to the join the federal healthcare.gov web exchange as a backup plan in case the hCentive solution would not be operational by the fall.
“Every day we know that the key risk area is the aggressive timeline,” said Maydad Cohen, the governor’s former deputy chief of staff who recently took over the exchange project from Sarah Iselin, who returned to her job at Blue Cross Blue Shield after developing the strategy for the Patrick administration.
Cohen also announced that the state received approval Wednesday from the Centers for Medicare and Medicaid Services to extend through the end of the year existing subsidized Commonwealth Care plans and the temporary Medicaid coverage extended to more than 160,000 people who could not enroll in ACA plan due to the technical problems that plagued the state site. Letters to subscribers will start to be mailed out Thursday, and those individuals will most likely have to reapply during the next open enrollment period.
The extension is the second reprieve given to the state by the federal government that has allowed Connector officials to keep nearly 90,600 residents on their existing subsidized plans while the state works to make online enrollment in new Affordable Care Act-compliant plans possible. Another 126,281 Commonwealth Care subscribers were transitioned to MassHealth in January under the ACA’s new expanded Medicaid coverage.
Lora Pellegrini, president of the Massachusetts Association of Health Plans, said that while the Connector should be applauded for the progress they’ve made to keep people insured and put the website project back on track, it will be important not to “lose sight” of the importance of moving people quickly off temporary MassHealth to their ACA coverage.
“While the reduction in the number of uninsured is significant, the ultimate test of success will be whether the Commonwealth is able to maintain these gains when individuals transition out of temporary coverage and into permanent coverage where they may be required to pay for all or some of their health insurance premiums,” Pellegrini said.
Connector officials will meet in early July with officials from the Centers for Medicare and Medicaid Services to prove that the hCentive option is sufficiently developed and on track to go live in time for the next open enrollment period starting in November.
While the state will continue to improve the hCentive site over the coming months, CMS will be looking in July to see if the system has the ability to offer a streamlined application, shopping and plan selection process, enrollment and billing through the state’s vendor Dell, and can connect to the federal data hub to perform immigration status checks, income verification through tax filings with the IRA and other functions, according to state officials.
The state also plans to have five health plans loaded into the system for the June 30 launch, and CMS wants all vendor contracts to be finalized with a updated project budget and federal funding request.
“We believe we will be able to present to them a product that meets the criteria,” Cohen said.
Members of the Health Connector staff demonstrated parts of the new website for the Health Connector Authority Board on Thursday at its monthly meeting. One of the biggest ongoing concerns is how to integrate the state’s “wrap” program with the new system. The state wrap is a program that makes up the difference for low-income health insurance subscribers between the level of federal subsidies received and the higher level of subsidies offered through more generous state laws.
While the wrap is expected to be integrated with the hCentive site during its second phase in later July, officials said they are still trying to figure out how to continue the program should the state be forced to join the federal exchange.
Ashley Hague, deputy executive director of the Connector, said there were currently “no red flags” on the work being done to prepare Massachusetts to join the federal exchange as a last resort, and noted that, “If we were to rent the (federal marketplace) for 2015, we still would maintain authority to control what plans are offered.”
Administration and Finance Secretary Glen Shor said the administration has identified at least $40 million in grants previously awarded to the state to help with the implementation of the Affordable Care Act that can be used to reduce the state’s request for additional funding from CMS. The Connector has put a preliminary estimate of $121 million on the dual-track project, but has yet to finalize a contract with its new IT vendor Optum.
Shor noted that to date the state has spent $65 million of the $175 million it received from the federal government to build the original exchange, but it remains unclear how much will be left over once CGI and other expenses are paid.
While it remains unclear how much additional money CMS will be willing to commit to the state’s rebuild of its health exchange website, Cohen said, “No one said the cost of $121 million, which everyone recognizes was a preliminary number, was too high. As expected everyone is asking us to work on how we can reduce and really stabilize that number to be firm and come together with our project plan.”
Shor said, “We all have an interest in being as cost conscious as possible.”
The Connector has still not finalized contract termination negotiations with former vendor CGI, who continues to help transition the project to Optum. State officials laid much of the blame for the failed rollout on the company. The state is also working to sign a formal deal with Optum as its new IT vendor on the project. Optum is already owed $25.8 million for the work it has done since February.
Shor noted that despite the unexpected coverage options being deployed to make up for the failure of the web exchange and the state adding 296,686 new members since December 2013 in MassHealth and Connector plans exceeding budget expectations, total costs are similar to original projections for fiscal 2014. Current spending projections anticipate $6.08 billion for MassHealth and the Connector, just under the $6.11 billion budgeted.
The fee-for-service costs of temporary Medicaid coverage so far have totaled $90.5 million.
Still, Shor said budget officials will have to continue to monitor MassHealth costs “very carefully” moving into fiscal 2015 as large numbers of subscribers remain on temporary Medicaid plans as they wait to be transitioned.
“There are multiple different reasons, coverage and financial, why we want to move people to the full world of ACA compliance. We will have to continue to watch the cost of temporary Medicaid coverage over the time we need to use it in fiscal 2015,” Shor said.
Copyright 2014 State House News Service