We are now two weeks into the launch of the Healthcare Exchanges created as part of the new Affordable Care Act. The Exchanges were launched in an effort to enable individuals and families to compare options and purchase health insurance. The ACA mandates that everyone has health insurance (employer-based, government-sponsored or individually purchased) by March 2014 or face a penalty of up to 1% of their annual family income in 2014. Penalties eventually scale to 2.5% in 2016. Insurance premiums may be subsidized depending on a family’s income.
The exchanges are sponsored by either a State or the Federal government and include plans sponsored by private insurers. States could opt to run their own exchange or let the Federal government offer plans for their state. As outlined in our previous blog post, 14 states built their own exchanges and the remainder opted to utilize the Federal exchange.
Here is a brief update on how things have gone over these last two weeks:
Overall, the reviews on the State exchanges have been fairly positive as people have been able to successfully log on and review options. Some of the exchanges in larger states have already reported enrollments in the first week of operation. WA has reported 10,000 people successfully completed the application process and were found eligible for coverage, CA reported 28,000 and NY 40,000. These numbers are quite small when compared to the eligible population - CA officials have estimated that approximately 5.2 M people are eligible across the state, for example. Smaller states have reported far fewer enrollments - 250 for CO, 18,000 in Kentucky and 580 in Rhode Island, for example.
Click to Enlarge
The Exchange (healthcare.gov) has not faired as well. The $400 M project has been hindered by multiple blackouts and has suffered substantial downtime. Heavy traffic and design flaws have many people reporting lock outs and long delays when they tried to create an account or enter information. These problems are continuing with some experts predicting it may require months and substantial additional investment to get to the point where the Exchange is working smoothly. The government has not yet released any enrollment figures but unofficial numbers point to approximately 125,000 accounts being successfully opened in the first weeks of the federal exchange. The target is 7 M enrolled in year 1. The Healthcare.gov is complex with ties into systems at multiple Federal Agencies including HHS, IRS and CCIIO. It is those inter-dependencies which appear to have caused the majority of the problems.