by Chris Wheelahan –
There’s a lot about October 1, 2013 that people don’t realize.
Everyone understands what is necessary from policymakers, providers, insurance plans, and uninsured Americans. What most people don’t realize is that the Affordable Care Act represents the largest government-mandated, technological “go-live” in American history. In other words, all of the supporting technology for the state-based insurance marketplaces, the federally-facilitated marketplaces, the federal data hub, and changes to every state’s Medicaid eligibility system all need to be “turned on” over the course of one evening… or more accurately, one very late night. One issue: it’s not exactly like flipping on the Christmas lights for the first time.
Probably the most complex of these supporting technologies are the insurance “marketplaces”. Each marketplace has to perform all of the functions of the individual and “Small Business Health Options Program” (SHOP) exchanges. These functions include processing applications, consumer support, and managing plans and finances. Furthermore, they are unique to each state, making re-use of technology and the transfer of “lessons learned” difficult.
The Commonwealth Fund has published a map illustrating the diversity and complexity of these solutions from state to state. The “federally-facilitated marketplace (FFM) states” and “partnership states” are relatively consistent in how they will be setting up their marketplaces and the interactions with the Medicaid agencies. However, little uniformity exists in the states setting up their own “state-based exchanges” (SBEs). Utah, for example, will use its small-business marketplace as a basis for the SHOP Exchanges, but the FFM for individuals. California, on the other hand, will establish its own marketplace and must tie it into the state’s three separate existing Medicaid eligibility systems.
Leaving aside the challenges of state-based marketplaces, the federally-facilitated marketplace is a vastly complex system. Not only does the FFM have to do all of the same work that each individual SBE has to do, but it needs to be 100% flexible to meet existing laws and policies at the state level. Medicaid eligibility in the FFM, for example, is extremely thorny. When an individual applies for Medicaid, a FFM first needs to execute the state’s Medicaid eligibility rules to determine whether the individual qualifies, then pass the application to the state’s unique eligibility system for processing. Each state’s income thresholds, optional coverage groups, cascade hierarchy (the order in which individuals are assessed for particular Medicaid coverage groups) and technical details need to be configured in the system.
States must also make changes to their existing Medicaid eligibility systems to comply with the ACA. It’s impossible to neglect the endless debates about “expansion” versus “non-expansion” states. The fact of the matter is that states must conform to certain ACA eligibility rules regardless of whether they are expanding coverage in order to make the income calculations consistent between the exchanges and Medicaid. If states had inconsistent methodologies, individuals could fall into a coverage “gap” between eligibility for Medicaid and eligibility for premiums subsidies. This is not only a systems change, but also a change to policy and day-to-day operations in local HHS offices. Furthermore, applications “churning” between Medicaid agencies and the exchanges present an entirely new business process. And with new business processes come new enabling technologies.
Finally, there’s the federal data hub, which state marketplaces and Medicaid agencies will access to verify various “client-attested” data points such as citizenship, household size, income and incarceration status. This system is a middle-man between the accessing systems and the IRS, Social Security Administration, and Department of Homeland Security databases. The accessing systems will ask, for example, “Is this guy a US Citizen?” and the Hub should be able to determine whether the individual is or not. While this functionality is, in fact, complicated in its own right, the changes related to the Marketplaces and the Medicaid systems are far-reaching and unproven. The feds have said that this system is up and running (see Wonkbites from September 13), but a number of states are still struggling to get plugged into the system by 10/1.
So. Heaps of technological complexity. Got it. What does it mean for states?
It means primarily that there’s a vast network of mind-bogglingly complicated systems—which all need to be turned on with the flip of a switch at midnight on October 1st. This is difficult, and there is a high risk of system outages, defects, and breakages. I expect most people involved with these changes (including myself) will have a very late night or two this coming week to ensure this implementation goes off with as few hitches as possible.
It also means money… lots of money. The ACA provides a 100% match for Medicaid expenses related to the expansion population until 2016. It also provides 90/10 funding for all the work that goes into supporting a state’s ACA changes. (That being said, 90/10 funding on a $100 million project is still $10 million from the state budget.)
The technical complexity of the Affordable Care Act requirements is rarely acknowledged by the media. It is frankly a herculean task to get everything put together and switched on over the course of one night. There will be growing pains. Some of these systems may not be able to talk to one another on October 1st. Some folks may not get the benefits they need right away. But if I know technologists at all, little or no sleep will be had until things are working as expected and all is made right.
Chris is an IT Consultant specializing in Medicaid implementation for state and local HHS agencies.