Inside the Obama administration’s plan to build 25 insurance markets

February 14, 2013

For months now, its been one of the health care overhaul's biggest unknowns: Will the federal government be ready to run two dozen state insurance marketplaces?

On Thursday Gary Cohen, director of the Center for Consumer Information and Insurance Oversight gave the Senate Finance Committee the most comprehensive explanation to date of what the agency has achieved so far—and what remains to be done.

The Department of Health and Human Services has put a lot of effort into building something called a "federal data hub," where the federal government—and the states—can check if an individual is eligible for new benefits.  As you can see in this diagram that consultants at Xerox drew up, the eligibility system is quite complex, as it needs to draw information a number of federal agencies.

Under this system, the Department of Homeland Security needs to verify that an applicant on the exchange is a legal resident of the United States because undocumented workers aren't eligible for health law benefits. The Internal Revenue Service must verify that the applicant earns the salary she says she does, which will determine what subsidies the individual can access.

There are so many agencies that will intertwine with the that this federal data hub, that Cohen had trouble listing them during his testimony Thursday. "I may have to get back to you with the complete list," Cohen told Senate Finance Chairman Max Baucus (D-Mont.).

Right now his agency is working to ensure that all of these federal agencies can share data, that Homeland Security, the IRS and state Medicaid programs—whose computer systems had never interacted — can all submit accessible data to the hub. Cohen said that HHS has completed the technical design of the data hub, and is now taking it for a test drive.

"We have begun testing with all those data flow issues," Cohen said. "It's moving along well ,and we expect to complete that testing by the spring."

That's the data side of the federal exchange. But there's another important task in front of HHS: ensuring that, when applicants show up at the new insurance marketplace, there will be something to buy.

Health and Human Services has a timeline for health plans that want to sell on the federal exchange: An application period will open on March 28 and close on April 30. By July, the federal government will decide which plans make the cut. Insurers will have to include their benefit and coverage package and how much it will cost.

"We will review those and make determination which plans will be sold in the federal marketplace by July," Cohen told the committee. "We’ll know by July what the bids are."

There's a final component of the system that Cohen spent a good chunk of his testimony explaining: outreach. A federal data hub and competitive health insurance markets don't do much good if nobody knows about them.

Cohen said that the Obama administration will launch a "major media campaign" in June, about four months before the exchanges open for enrollment Oct. 1.

"The purpose will be to try and drive people to Healthcare.gov," the federal site for the Affordable Care Act, Cohen said. "We will give people the information they need to come back in October when they can actually enroll."

While the Affordable Care Act doesn't tend to unite senators from opposite parties, those on the finance committee did seem to agree on this: The Obama administration will need to keep its nose to the grindstone to get all of this done on time.

"If it crashes and burns on October 1," Sen. Johnny Isakson (R-Ga.) warned, "you’ve got a huge problem."

Or, as Sen. Tom Carper (D-Del.) put it, "You really need to be on your A game."

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February 14, 2013

For months now, its been one of the health care overhaul's biggest unknowns: Will the federal government be ready to run two dozen state insurance marketplaces?

On Thursday Gary Cohen, director of the Center for Consumer Information and Insurance Oversight gave the Senate Finance Committee the most comprehensive explanation to date of what the agency has achieved so far—and what remains to be done.

The Department of Health and Human Services has put a lot of effort into building something called a "federal data hub," where the federal government—and the states—can check if an individual is eligible for new benefits.  As you can see in this diagram that consultants at Xerox drew up, the eligibility system is quite complex, as it needs to draw information a number of federal agencies.

Under this system, the Department of Homeland Security needs to verify that an applicant on the exchange is a legal resident of the United States because undocumented workers aren't eligible for health law benefits. The Internal Revenue Service must verify that the applicant earns the salary she says she does, which will determine what subsidies the individual can access.

There are so many agencies that will intertwine with the that this federal data hub, that Cohen had trouble listing them during his testimony Thursday. "I may have to get back to you with the complete list," Cohen told Senate Finance Chairman Max Baucus (D-Mont.).

Right now his agency is working to ensure that all of these federal agencies can share data, that Homeland Security, the IRS and state Medicaid programs—whose computer systems had never interacted — can all submit accessible data to the hub. Cohen said that HHS has completed the technical design of the data hub, and is now taking it for a test drive.

"We have begun testing with all those data flow issues," Cohen said. "It's moving along well ,and we expect to complete that testing by the spring."

That's the data side of the federal exchange. But there's another important task in front of HHS: ensuring that, when applicants show up at the new insurance marketplace, there will be something to buy.

Health and Human Services has a timeline for health plans that want to sell on the federal exchange: An application period will open on March 28 and close on April 30. By July, the federal government will decide which plans make the cut. Insurers will have to include their benefit and coverage package and how much it will cost.

"We will review those and make determination which plans will be sold in the federal marketplace by July," Cohen told the committee. "We’ll know by July what the bids are."

There's a final component of the system that Cohen spent a good chunk of his testimony explaining: outreach. A federal data hub and competitive health insurance markets don't do much good if nobody knows about them.

Cohen said that the Obama administration will launch a "major media campaign" in June, about four months before the exchanges open for enrollment Oct. 1.

"The purpose will be to try and drive people to Healthcare.gov," the federal site for the Affordable Care Act, Cohen said. "We will give people the information they need to come back in October when they can actually enroll."

While the Affordable Care Act doesn't tend to unite senators from opposite parties, those on the finance committee did seem to agree on this: The Obama administration will need to keep its nose to the grindstone to get all of this done on time.

"If it crashes and burns on October 1," Sen. Johnny Isakson (R-Ga.) warned, "you’ve got a huge problem."

Or, as Sen. Tom Carper (D-Del.) put it, "You really need to be on your A game."

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Neil Irwin | February 14, 2013