(April 11, 2014) Despite some late-breaking improvements, it appears that insurance providers across Maryland will be glad to see the state’s health exchange system bite the dust.
Six painful months after the system’s rollout in October, the state’s oversight board voted this week to scrap the current website and hire the company that created Connecticut’s much more successful health exchange to set up a site for Maryland, using the same software.
Enrollment on the current Maryland Health Exchange ended this week, although the site will remain active until April 18.
“So long as you tried and failed to apply prior to March 31, they’re saying you’ll still be able to enroll before April 18,” said Chris Keen of Keen Insurance in West Ocean City, who has helped hundreds of resort-area residents enroll.
“It definitely got better in the last few months,” Keen said. “I tried doing stuff in October and November and it was just a waste of time. There are people going back through October and November that haven’t cleared out of the system yet. But the ones who got started later actually went through fairly easily.”
Along with a handful of other states, Maryland has elected to design and run its own insurance exchange, as mandated by the federal Affordable Care Act, rather than pay the federal government to incorporate the state in to the federal healthcare.gov system.
Insurance exchanges are one of the key elements of the ACA, popularly known as Obamacare. By subscribing to the exchange, people who are uninsured or under-insured by their employer can pool their buying power to purchase their own private insurance plans, many of which are subsidized by the federal government. Anyone making less than 400 percent of the poverty line will receive some type of discount, depending on the level of coverage they select.
Some exchanges, such as Connecticut’s, have been well-received compared to the problematic federal system. Other state exchanges, such as Maryland’s have fared worse.
According to the Kaiser Family Foundation, a health research institute, Maryland had only enrolled 38,070 people out of the estimated 419,000 eligible for coverage as of March 1. This enrollment rate of 9.1 percent pales in comparison to states like Connecticut, which achieved 26.6 percent enrollment in the first five months of its exchange.
Despite spending over $125 million on the site, Maryland’s system appears to have simply been overloaded, and could not handle the complex calculations needed to determine a person’s eligibility, cost, and subsidy.
In fact, Keen noted, the state had sped up the site by simply removing some of the informational qualifiers.
“They just took out some of the controls that would block applications,” Keen said. “For instance, I could put somebody in who was not a citizen, using their alien number. Before, it would require verification of their ID. But now it just pushes them through.”
Other states have fared worse, however. According to the Wall Street Journal, Oregon has spent an estimated $305 million on a system that still requires web applications to be manually processed on the other end by state workers.
The big question for Maryland is whether or not the Connecticut system will be ready for the next scheduled enrollment in November of 2014, and if the new system will carry over data from the old.
“The idea was that once you’re in the system, your policy would auto-renew,” Keen said. “But no one is convinced that the new system will be backwards-compatible.”
But for many employers and employees, the exchange system – when it works – offers a cheaper option than employer-provided insurance.
“For the lower-income groups, it works out because they’re getting a federal subsidy rather than the employer subsidizing the employee’s premiums,” Keen said. “Especially for small groups, they probably don’t have an HR department and don’t know how to administer the policy.”
Nation-wide, even some large employers, such as Target, are dropping their policies for most low-earning employees and instead paying the tax penalties to have those employees get cheaper insurance via the exchange given the federal subsidy.