The common description of a state health insurance exchange is an “online marketplace,” where customers can shop for insurance plans, comparing their options before making a purchase. But what will that experience entail? And how will the exchange incorporate elements of the Affordable Care Act (ACA), such as the expansion of Medicaid eligibility and the awarding of federal tax subsidies to qualified individuals and families?
Rhode Island officials have made considerable progress toward implementing the ACA. They have set up the governing board for its exchange. Their current task is to determine how the exchange will function and how consumers will interact with the exchange. Its first attempt at functionality was deemed too cumbersome for the customer, and simplicity became the top priority. Now with the second and current plan, governing board members are looking to neighboring states and potential vendors to implement their online exchange.
Over the last year, the online marketplace itself has undergone a fundamental restructuring, as a call for efficiency from the federal government and stakeholder groups pushed Rhode Island officials toward creating a simpler experience for the estimated 862,000 customers that will use the exchange.
In the preliminary incarnation of the exchange, conceived when planning began last spring, (well before HHS finalized rules on how exchanges would determine eligibility), residents would first apply for Medicaid. If they qualified, they’d be enrolled; if they didn’t, they’d then apply for a federal subsidy for private insurance through the exchange. If they qualified, they could purchase a plan; if they didn’t, it would be determined what insurance plans they could purchase on the exchange without a subsidy.
Conversations with the federal government in December and consumer groups, such as the Economic Progress Institute, which co-founded the Rhode Island Health Coverage Project to advocate for consumers in the state’s ACA implementation, prompted Rhode Island to re-evaluate that plan. “It is vitally important that the state pursue a model that is seamless to the customer,” said Linda Katz, policy director at the institute and a member of the exchange governing board.
State officials also met with several software vendors over two days at the end of January to discuss the small business market for the exchange and those discussions affirmed the decision to take the exchange in a new direction.
“There’s no way that anybody can understand how spending in health care works," said Meg Curran, chair of the exchange governing board. "It’s like a black hole of information.” So the process had to be leaner and easier to understand.
Rhode Island formulated a new model, called the “single project vision”: customers would enter their information, and eligibility software would determine whether they qualified for Medicaid or a federal subsidy and what insurance plans were available to them in one step.
Accomplishing that goal requires an extraordinary amount of coordination. Information must be streamed from the state Medicaid office, other state agencies, the Internal Revenue Service, the Social Security Administration, private insurance companies and the consumers themselves. That information must then be processed to determine whether a user is eligible for Medicaid, qualifies for federal subsidies and what plans fit their needs.
And that entire infrastructure "should be invisible to the consumer," Rhode Island Medicaid Director Elena Nicolella explained.
HHS has offered some assistance in its recently released rule on the ACA’s Medicaid expansion, assuring states that they would have access to a “hub” of federal databases, such as the Social Security Administration and the U.S. Department of Homeland Security.
To aid its IT decisions, Rhode Island also joined the New England States Collaborative Insurance Exchange Systems collaborative, a group of six Northeast states that are sharing ideas about how to create the technological infrastructure necessary for the insurance marketplaces.
The collaborative received a $35.6 million Early Innovator Grant from HHS in February 2011 to fund its efforts. It has produced a series of reports using Massachusetts, one of the member states, as its primary example because the state had already developed an exchange prior to the ACA. Massachusetts utilized a streamlined eligibility system, similar to what Rhode Island has elected to adopt . There have also been discussions about different tiers of cooperation among the member states, from simply sharing information to fully integrating their software. Every state except for New Hampshire has taken steps to establish an exchange.
Rhode Island is moving forward with its own system, while still utilizing the lessons learned from the group. Potential vendors for the exchange's software will be expected to draw from the collaborative's resources. Sharing information among states has been a significant aid in the process, state officials said. “It helps quite a bit," said health insurance commissioner Chris Koller. "We're all going through it. You can compare notes.”
So, the next big step for the state is putting out requests for proposals (RFPs), which would allow IT companies to pitch their ideas for the website design and accompanying software program that will run the exchange based on Rhode Island’s vision. Draft proposals have been posted for public comment.
What do you think of Rhode Island’s strategy and proposed RFP’s? Is your state facing similar challenges? Please share your thoughts in the comments.
Dylan Scott is a staff writer for Governing
