States running out of time on health insurance exchanges

June 16, 2013

With the deadline for states to implement Affordable Care Act-mandated health insurance exchanges less than four months away, state governments will need to move fast.

States are having to reevaluate their existing health insurance infrastructures to meet the act’s requirements. They have already received nearly $4 billion in funding for the effort thus far — and can access more dollars through 2014.

Some states are still applying for additional federal funding for exchange-related projects. New Mexico, for instance, recently requested $20 million for outreach, education and marketing activities.

Several states — including California, Oregon and New York — have already set up exchanges, secured vendors, built system infrastructure and created Web sites to educate consumers.

These states are now shifting their focus to developing marketing and outreach strategies for the new systems.

As states move through the workload, there are key opportunities for contractors. Washington state, as an example, recently contracted with several firms to help residents figure out how to purchase health plans.

States that have opted to use federally provided health insurance marketplaces are still awaiting the exchanges, and concerns persist over whether these exchanges will integrate with state health and human service computer systems.

Integration is a critical component. All states, whether or not they’ll be running their own exchanges, will depend on the federal hub to decide whether consumers qualify for subsidies.

Some states secured vendors early to mitigate integration issues, but contractors can expect to see last-minute state-level procurements for both information technology upgrades and health exchange integrations.

Take Nebraska, which opted for the federal exchange and will use a two-phase approach. Phase one involves adding capability to the state’s existing eligibility system, while in phase two, the state will buy a program that can be used longer-term.

Deltek expects a solicitation for Nebraska’s effort in August, and implementation is expected to begin in 2014.

Amanda White is a research analyst at Herndon-based Deltek, which conducts research on the government contracting market and can be found at www.deltek.com.

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