Correction: An earlier version of this column incorrectly said Maryland’s health insurance exchange had never enrolled any applicants; in fact, thousands have enrolled through the state’s system. The story has been updated to remove the erroneous mention.
The open enrollment period for federally mandated health insurance is now closed, and it’s a fitting time to look back on how the state health insurance exchanges performed.
Much attention was paid to the difficult rollout of the federal exchange; however, the state exchanges — with rollouts that ranged from smooth to catastrophic — are also worth examining.
When the federal government first announced funding for state health insurance exchanges, a majority of states were led by receptive Democratic governors. After the 2010 elections changed the gubernatorial balance, Republican governors began opting out of state exchanges, joining their Capital Beltway colleagues in opposition to President Obama’s health-care reform.
In the end, only 14 states and the District of Columbia tried to create their own.
It appears Colorado, Connecticut, Kentucky and Rhode Island rolled out state exchanges with few problems. California, the District of Columbia and New York had launches that experienced only minor hiccups.
Minnesota, Nevada, and Washington state experienced more difficult rollouts: Nevada’s exchange eventually deteriorated into a failure, but the other two limped along.
Five other state exchanges failed outright. Maryland and Oregon received the lion’s share of media attention to failed exchanges because of problems with the technology. However, Hawaii, Massachusetts and Vermont also experienced severe and ongoing disruptions.
All of the failed states will be back to the drawing board before open enrollment begins in 2015.
The Department of Health and Human Services’ inspector general will review Maryland’s exchange, and the Government Accountability Office will review Oregon’s. Other federal and state audits and investigations are sure to follow in states with troubled exchanges.
However, these post-mortems are unlikely to unearth anything we don’t already know.
The federal government’s guidelines for state exchanges, though convoluted and time-constrained, don’t deserve blame. If a few states were able to launch successfully, they all should have been able to do so. Moreover, we saw vendors succeed in one state and fail in another.
The causes of failure were local.
In states that failed, we see the usual signs of bad IT project management: Multiple agencies had oversight responsibilities, with no single official accountable to the governor. Reporting on progress was weak or nonexistent. Contractors and subcontractors were poorly coordinated. Staff and contractors who sent up warning flares were ignored.
In the end, vendors pursuing state government IT business should always be wary when a client is building a system with federal money. Lackadaisical oversight can result, especially when the federal government is distracted by designing a similar system and has yet to be able to share best practices.
However, victory still goes to the bold. Connecticut, along with its primary IT consultants and vendors, is looking to resell its exchange solution to Maryland as well as Arkansas and Iowa, who are looking to move off of the federal exchange.
Despite the hit-or-miss rollout of state exchanges, one of the successes might emerge as the model for the nation’s insurance marketplace.
Chris Dixon is senior manager of research at Herndon-based Deltek, which conducts research on the government contracting market and can be found at www.deltek.com.