The first hearing of a new General Assembly oversight committee for Maryland's health insurance exchange made clear just how badly dysfunctional it remains four months after its botched launch. Despite millions in additional costs — some of which will be covered under existing, fixed-price contracts, and some of which won't — the software at the core of Maryland's exchange website remains deeply flawed and continues to require extensive manual work-arounds that frustrate consumers and slow the pace of enrollment. The situation presents two questions: What should the state do now, in the period before open enrollment ends on March 31, and what should it do between then and the start of the next open enrollment period in November?
Gov. Martin O'Malley's administration has been under steady pressure from gubernatorial candidates and other politicians — even some Democrats — to abandon its snakebitten exchange and instead use the federal one or to partner with one of the states whose systems have succeeded. State officials considered the option of moving to the federal exchange but decided not to for the moment. Based on the testimony at Monday's hearing, that choice appears to have been the best of some bad options.
Maryland has done reasonably well at enrolling those who qualify for Medicaid, in large part because many of those who are newly eligible for that program had already been covered under a limited state primary care program. But enrollment in private plans is lagging. As of Friday, fewer than 30,000 people had enrolled in private plans, and at the current pace, the state will come nowhere near its goal of 150,000 by March 31. The O'Malley administration's immediate focus needs to be on doing whatever it can to maximize enrollment in the next six weeks, and there is good reason to believe that switching to the federal system (or some other one) would not help in that goal and might make matters worse.
Isabel FitzGerald, the head of the state's information technology department who has taken over IT for the exchange, testified Monday that there were — and still are — "major defects" in the off-the-shelf software Maryland bought to serve as the backbone of its site. Minnesota, which used the same software, has experienced similar issues. The biggest problems are for those who tried to apply for insurance in the early days of the exchange, many of whom have still not been able to complete the process. Some applications are simply lost in the ether.
Those who are applying for the first time now are, generally, having a better experience, she said. Some are able to complete the process in as little as 20 minutes, and most of the problems with transferring enrollments from the state's system to the insurance carriers have been resolved, Ms. FitzGerald said. Only about 2 percent of new applications are getting "stuck" in the system, she said. For those who are still having problems, the state has developed elaborate, manual work-around procedures and has increased staffing at the state's call center. The system may still be frustrating for consumers, but its flaws are by now relatively well known by its administrators.
Shifting to the federal website, though, is not just a simple matter of flipping a switch. For one thing, the systems for enrolling in Medicaid are different from those for enrolling in private plans, and switching to the federal system might actually make matters worse in some respects. And it's not clear to what extent switching immediately to the federal system would help the 11,000 people whose applications are stuck. For the moment, it seems better to continue working with a flawed system whose problems are known rather than switching to a new one that presents different — and potentially unknown — difficulties.
After March 31, though, the question is much different. Maryland attempted to build something of a Cadillac system for its insurance exchange, one that would not only allow people and small businesses to shop for health plans but which would also replace outdated Medicaid software and eventually serve as a platform for determining eligibility and conducting enrollment for a variety of public assistance programs. In the long run, that might make sense, but it now appears that achieving that goal is not something the state is likely to accomplish in the 11 remaining months of the O'Malley administration. It is the next governor who would see that project through, and it should be up to him or her to decide whether it's worth the effort. The rubric through which the state should decide its best course of action after open enrollment ends this spring is to determine what option provides the greatest opportunity for a functional, bare-bones site by November and leaves in place maximum flexibility for the next governor to chart the health exchange's future.
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