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HIX-IES Cost Report

HIX-IES Cost Report

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Published by WBUR
Health cost report.
Health cost report.

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Published by: WBUR on Aug 01, 2014
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08/08/2014

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HIX-IES Cost Report for the Joint Committee on Health Care Financing As Required by Outside Section 237 of the GAA
July 31, 2014
INTRODUCTION
Pursuant to Chapter 165, Section 237 of the Acts of 2014, the Executive Office for Administration and Finance and the Executive Office of Health and Human Services submit the following report on the financial impact of challenges associated with the launch of an updated state health insurance website in connection with the implementation of the Affordable Care Act. Massachusetts enacted landmark health reforms in 2006 designed to expand health insurance coverage to virtually all of its residents. These reforms have resulted in nation-leading coverage levels for the Commonwealth, with 97 percent of our residents insured. Our citizens now have better access to the care they need and are enjoying better health. They also have greater financial protection in the event of illness. Health reform has been affordable for the Commonwealth
 –
 the state has maintained balanced budgets and secured its highest-ever bond ratings during its implementation
 –
 and has witnessed growth in the percentage of employers offering coverage to their employees. The Affordable Care Act (ACA) provides the Commonwealth with the opportunity to build on the success of our state reforms. It expands subsidized health insurance coverage through MassHealth and the Health Connector to populations who did not previously qualify under Massachusetts reforms, making it easier for many of our families to afford coverage. It also provides the state with significant additional federal resources to cover populations we had already insured through state health insurance programs. The ACA makes prescription drug coverage more affordable for seniors, provides more affordable access to preventive care, and strengthens the
Commonwealth’s ongoing health care delivery system reforms designed to promote
better care at lower costs. Because the ACA
was based in significant part on Massachusetts’
2006 coverage reforms, the Commonwealth was well-positioned to implement and secure the
federal law’s
many benefits. Nonetheless, we have had to make some changes to
DEVAL L. PATRICK
GOVERNOR
T
HE
C
OMMONWEALTH OF
M
 ASSACHUSETTS
 
E
XECUTIVE
O
FFICE FOR
  A
DMINISTRATION AND
F
INANCE
 & E
XECUTIVE
O
FFICE OF
 H
EALTH AND
H
UMAN
S
ERVICES
 
GLEN SHOR SECRETARY JOHN POLANOWICZ SECRETARY
 
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comply with the ACA. Most of these changes have been fully implemented through collaboration between the state, insurers, consumer advocates, providers, employers and other health care stakeholders. They include the transfer of the lowest-income portion of the
Health Connector’s Commonwealth Care population to MassHealth;
alignment of Health Connector and small employer/individual market health benefits with federally prescribed categories of insurance plans (metallic tiers), which differ based on how subscribers and insurers share the costs of care; and the implementation of revised health insurance rating rules and a state-based risk adjustment program for this segment of our market. The Commonwealth has, however, encountered challenges with one aspect of its  ACA implementation efforts. The ACA required us to create a new online system for accessing individual and family coverage through the Health Connector and MassHealth by interacting with federal databases to validate eligibility and determine the program for which an applicant is qualified. Previously, any Massachusetts resident seeking help paying for health insurance was in a purely paper-based system, applying through a paper application that was manually reviewed, with notices and other documents being mailed to the applicant. In order to comply with new federal rules and make it quicker and easier for people to shop for and enroll in health coverage through
one-stop
 shopping for MassHealth and Health Connector programs, the Commonwealth launched the Health Insurance Exchange-
Integrated Eligibility System (“
HIX-IES
”)
 project in 2011. This gateway to health coverage was also intended ultimately to enable eligible Massachusetts residents to secure access to other state programs, including cash assistance and supplemental nutrition assistance. To date, due principally to challenges with our former information technology vendor, we have deployed an incomplete and imperfect web-based portal for state health insurance programs. While small employers have still been able to shop for coverage through the Health Connector, they have had to do so through a legacy website. We were able to launch a new website for shopping and enrolling in unsubsidized individual health coverage, but system performance was unreliable for a number of months
 –
 inconveniencing consumers and requiring manual workarounds. This same website also allowed people for the first time to submit electronic applications for subsidized coverage; however, it could not make eligibility determinations or allow applicants to shop for and enroll in subsidized coverage. Notwithstanding these challenges, the Commonwealth worked with insurers, consumers, providers and others to achieve the core objective of our reforms and the  ACA
 –
 protecting health coverage for those who have it and expanding access to those seeking it for the first time. To protect and advance coverage for Massachusetts residents, the Health Connector maintained Commonwealth Care for enrollees who were not qualified to transition to MassHealth. MassHealth received authority from the Centers for Medicare and Medicaid Services (CMS) to create a temporary Medicaid coverage for those applying for subsidized health insurance whose applications could not be processed through the website. Consumer call center hours were expanded, and both
 
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organizations collaborated on other member assistance efforts to work through challenges people were experiencing accessing coverage through the website. With the help of technology and operations support from Optum, the information technology firm that help put the federal healthcare.gov project back on track, the Commonwealth eliminated a backlog of more than 70,000 paper applications in March and has been able to keep up with processing demands ever since. The Health Connector also
instituted a “Fast Path” to re
-enroll members in unsubsidized individual coverage by the end of the federal open enrollment period.  As a result of these efforts, more than 300,000 people have newly enrolled in state-subsidized health insurance programs. This suggests that the Commonwealth is making major progress on one of the last frontiers of coverage expansion
 –
 enrolling low-income populations who have been the hardest to reach and make up the majority of the remaining uninsured. Whether newly qualified for state health coverage or newly aware of their options, these individuals now have access to affordable, high-quality coverage and the improved health and financial security it brings. There are also nearly 33,000 people enrolled in unsubsidized individual health plans and 3,200 newly enrolled in individual dental coverage through the Health Connector. Governor Patrick has underscored that health care reform is not just a website and has appropriately focused our efforts foremost on protecting and expanding coverage. At the same time, he has taken strong and effective action to rectify website project challenges and put the Commonwealth on a path to deliver a functioning website for the federal open enrollment period beginning in November 2014. He created a single point of authority and accountability for project delivery that reports directly to him, and brought in Optum to provide additional information technology expertise and critically needed operational support. These efforts have already enabled us to enroll more people in coverage and to improve the performance of the existing website. Moreover, under this revised project management structure
 –
 and with Optum now serving as the Systems Integrator for the project
 –
 
the Commonwealth is pursuing a “dual track” strategy to ensure
we have a working website this Fall. Our goal is to maintain a state-based marketplace by successfully deploying a commercial off-the-shelf product called hCentive, which has proved to be a successful solution for a number of other states. At the same time, the Commonwealth has been laying the groundwork to temporarily migrate to the Federally Facilitated Marketplace (FFM) for one year in the event the hCentive product cannot be successfully deployed in time for the upcoming open enrollment. In collaboration with the CMS, the Commonwealth intends to decide in early August on its final solution for standing up a functioning website.  As required, this report discusses state coverage, website and other costs associated with the HIX-IES project. The information included in this report is consistent with legislative testimony provided by the Administration before the Joint Committee on Health Care Financing, briefings during monthly Health Connector Board meetings and other public updates provided by the project team over the past six months. It principally highlights that:

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