Welcome to Health Reform Watch, Sarah Kliff’s regular look at how the Affordable Care Act is changing the American health-care system — and being changed by it. You can reach Sarah with questions, comments and suggestions here. Check back every Monday, Wednesday and Friday afternoon for the latest edition, and read previous columns here.
Days until marketplaces launch: 4.
Mila Kofman is the executive director of the D.C. Health Benefit Link, the health law marketplace for the District of Columbia that will launch on Oct. 1. On Wednesday, her agency announced that it would not be able to determine some shoppers’ premium prices on launch date. Instead, due to a “high error rate” discovered in testing, that information wouldn’t become available until November.
I sat down with Kofman in her Washington office Thursday morning to talk about the decision to hold off on determining premium prices, why that decision was made and what it means for consumers. What follows is a transcript of our discussion, lightly edited for clarity and length.
Sarah Kliff: Why don’t I start with what is actually changing? What did you guys announce yesterday that is changing about DC Health Link?
Mila Kofman: I’ll give you the full picture. I thought I was announcing good news, and no one wrote about it. Here’s what we’ll have October 1.
Small businesses can come October 1 and do everything from start to finish. They can open up an account, and they can choose what they offer their employees. We’re doing full employer choice. That means if an employer decides to offer gold coverage, then the employees will have 112 different policies to choose from. The employer can choose what level of contribution, uphold who works for the employer and an e-mail will go out and then employees will get a notification. They can start setting up their own accounts, and essentially pick whatever policy option is right for them.
That’s really good news, because the federal marketplace is not putting that functionality into place in year one. We’re very proud of what my team has accomplished. I think our SHOP is going to be the best in the nation.
SK: And that’s all done at this point?
MK: Yes, we’re opening it up to the public on October 1. We’re testing the entire system until the moment we go live, and you always want to do that but it's done. October 1, employers can do that.
On the individual side, let’s say you know you’re not going to qualify for premium assistance, because for an individual person, the tax credits phase out at 400 percent of federal poverty level, which is about $42,000 or $43,000. Let’s say you make $60,000, and know you’re not going to qualify. You go online, you establish your online account, and you can look at our 34 different products. You compare, you look at prices, and you can look at benefits. You can pick one and you pay. You can do that on day one.
I don’t encourage people to do any of this on day one because picking an insurance plan that’s right for you is a big decision. You need to talk to experts, so I’m really encouraging people to take advantage of the customer service we’re providing in October. But if you wanted to, October 1, you can do that.
The third category of people are folks who might qualify for Medicaid and folks who may qualify for premium reductions through tax credits. We did a lot of testing of that part of the system and so we had 1,000 different case scenarios we were testing for eligibility. Some of those test scenarios are probably families who might not exist. They’re so complicated that they’re not typical families.
SK: Can you give me an example of what one of the complex ones you tested was?
MK: It’s things like a family of eight, where one person works for one employer, one is on Medicaid, some children are over 21 not on Medicaid, children under 18 maybe on Medicaid. Just a lot of factors that apply which, in typical cases, we’re not going to have that. In those more unusual scenarios we’ve constructed, we found errors in the way the calculation was being done.
SK: So there were 1,000 case scenarios, how many were coming back wrong?
MK: Of the thousand cases we tested, a little over 15 percent. And that’s too many. That number is not on Medicaid eligibility but it's on premium reduction. I’ll give you an example of the error. If you’re really eligible for a $100 reduction, let’s say, the calculation would say you’re eligible for $150 instead of $100. Or it would say you’re only eligible for $50. It was both ways.
To me, it doesn’t matter if the error rate is 15 percent or 100 percent. It’s still wrong, and we cannot have any consumer rely on inaccurate information. They’re stuck with this decision for a year if they believe they’re getting a higher tax credit. So I decided not to deploy that mechanism.
SK: What about people who might be eligible for Medicaid?
MK: For Medicaid people, there’s no delay. If you qualify, your application will be processed right away just like they are processed now. If you don’t qualify for Medicaid, then you’ll get a notice saying you may qualify for tax credits. That’s the notice you’ll get from us in early November, the amount you may qualify for.
Once the calculation for the premium tax credit is accurate, we’ll automatically run everyone who filled out an application in October. I’d be surprised if we get 100 applications, I’d be shocked frankly. But even if we get thousands, everyone is going to be run through the automatic determination, and will get information on how much they qualify for. They’ll get that early November. They’ll have ample time to figure out what plan they want.
Those folks who fill out the online application, if they want to see everything is available, they can still see all the health plan options and the price. They’re not going to know how much their price is reduced with certainty because we haven’t shared that information. But there is a way for them to estimate how much their premium may be reduced, we have a cost calculator that folks can use, I just don’t want to encourage folks to rely on it just because it's not an actual determination by us. But it will give you a good sense.
SK: Why is this a hard thing for the exchange to do? Why is this technology difficult to get off the ground?
MK: All of this is very difficult to build. All of this requires a lot of different coders to be talking to each other, and it's all very hard. I’m just very happy that all of these other pieces are working because all of it is extremely hard. There’s nothing about the IT pieces, any element, that is easy. My team, if we just did the regular test scenarios, we would not have discovered the flaw. Because we developed very unusual scenarios, that helped us figure out we were getting an incorrect calculation.
I’m very happy we decided to test the cases that might never ever come up, because we found these glitches.
No one is going to be left behind, I want to stress that. We’re going to have daily logs of people who have applied. No one is going to fall through the cracks. Everyone is going to have their coverage effective January, as long as they enroll and pay the premium. We will be following up with every single person who fills out the application in October.
SK: Is there any longer term impact? When I’m at the White House, they talk about how, on October 1, everyone should be able to shop for health insurance. You can only get so far in the shopping process in D.C. because of this glitch. Do you think that matters?
MK: I firmly believe there is no negative impact on consumers. If I thought there would be any negative impact, we would have potentially turned this on and then notified consumers that we redid the calculation. That was the other option, turn it on knowing you’d have to follow up with some consumers because of them getting the wrong information. I did not want to do that.
There is absolutely no negative impact on consumers, I cannot stress that enough. The shopping process, this whole online portal is all new, and consumers are going to want to check it out, and see what’s available. This is just the start. Consumers will have lots of time to make decisions, shop and finish the transaction. So everyone could open an account, look at all the policies, the prices and start thinking about which health plan is right for them. Consumers will have accurate information about the premium tax credit they’re eligible for. They’ll get that information in early November, for those who qualify. That’s ample time to make a decision.
SK: I see some people outside of here taking this as a sign that Obamacare isn’t ready to launch, that we should just delay it a year, that this is the first of many glitches? What do you think of that? Do you feel ready?
MK: Here’s what I know. October 1 SHOP functionality will be working with full choice for employers, very robust SHOP probably the most robust in the nation. On the individual side, great companies, great options, and consumers can go start to finish. We’ve tested the whole process, you can open an account, you can check out your prices, you can see up to three options all at once, you could print all 34 if you wanted to. All of that is ready to go on October 1.
In the interest of full transparency, we found the glitch, we were not getting 100 percent accuracy rate on eligibility and premium reductions. And I did not want to go live with that because we’re not getting 100 percent accuracy. So we determined there is no negative impact on consumers at all. Their coverage will not be delayed, they will have coverage effective January 1.
None of this is easy. The IT build alone is very complicated. The fact that for the most part, all state-based marketplaces can go live October 1, and provide tools and new options that don’t exist right now, is incredible. We’ve moved the ball forward.
SK: What would you say to people here in D.C. looking over at Virginia and Maryland, who are asking, why won’t some of this be available to me on the first day? Why can’t I see prices on the first date?
MK: There’s not going to be any delay on the Medicaid side. It’s business as usual on Medicaid. There is no delay at all.
I would rather have accuracy for everyone than accuracy for 85 percent of the population. So, I think it's really important to gain consumer trust and provide accurate information as we know it at the time, and that’s exactly what we’ve done. We cannot give everyone an accurate determination right now. I cannot turn that function on and know that some people will not have accurate information about their premium reduction.
KLIFF NOTES: Top health policy reads from around the web.
Few insurers will offer coverage in Georgia. "About 95 percent of American consumers will have a choice of two or more health insurance issuers, and often many more, the U.S. Department of Health and Human Services said Wednesday in announcing premiums for federally run insurance exchanges in 36 states, including Georgia. But in two regions of southwest Georgia, there’s only one insurer offering coverage –- Blue Cross and Blue Shield of Georgia. And the premiums in that corner of the state are much higher than in the rest of Georgia." Andy Miller in Georgia Health News.
Californians are largely unaware of their Obamacare options. "California is one of two dozen states preparing to dramatically expand Medicaid, the federal-state insurance program for the poor, yet the survey found only half of newly eligible low-income Californians presume they will qualify. The nonpartisan Kaiser Family Foundation surveyed some 2,000 uninsured Californians from mid-July until the end of August, a summertime lull before a burst of planned advertising and outreach efforts." Sarah Varney in Kaiser Health News.
Trouble for the health marketplaces? "With less than five days left to debug the sprawling new computer system, there are other signs of trouble: People close to the situation are also skeptical the online marketplaces for individual customers will be fully ready. The administration said it was confident they would open on time." Louise Radnofsky, Christopher Weaver and Sarah E. Needleman in the Wall Street Journal.