Connecticut could soon find itself soliciting bids from information technology vendors for a new health insurance exchange ”“ without sufficiently working out the requirements the IT system would need. That would open the possibility that it could select the wrong vendor.
Officials aired that scenario at a mid-September meeting of Gov. M. Jodi Rell”™s cabinet on health-care reform, which is chaired by Christine Vogel, the former head of the Connecticut Office of Health Care Access.
Vogel also said there is evidence that Connecticut employers are delaying their own health insurance decisions over continued uncertainty on the overall direction of health care reform, and the specific options that will be available.
According to the U.S. Census, 12 percent of Connecticut residents lacked insurance in 2009, up from 10 percent the year before, or an additional 43,000 residents. The number of residents covered under employer health insurance plans appeared to hold steady ”“Â although those figures include laid-off workers who pay their own premiums under COBRA, with many tapping federal subsidies to assist them during the recession.
Mandated under the federal Patient Protection and Affordable Care Act, health insurance exchanges are designed to spur competition in the health insurance market, by giving consumers better information on available plans and pricing available to them, while improving the back-end IT systems between patients, carriers, doctors and hospitals.
Connecticut and other states currently lack sufficient guidance on the architecture of health insurance exchanges, Vogel said, potentially jeopardizing any future request for proposals (RFPs) Connecticut might make to vendors.
“We can make some assumptions, but ”¦ if we”™re not making the right assumptions we possibly could be wasting six months of our time with an inaccurate RFP,” Vogel said. “I guess if we had to, we could change midstream; but I believe that would delay us even more on a process that on a good year could take six months.
“We need to make sure we get the right vendors bidding on these projects so that when we select our vendor, they can get the work done,” Vogel added. “God forbid we can”™t, and we then have to ”¦ reissue an RFP.”
Vogel recently attended a meeting convened by federal officials to give states an update on health-care reform, along with Michael Starkowski, the commissioner of the Connecticut Department of Social Services. Starkowski relayed an encounter he had with a federal official, when he queried her on the federal government”™s efforts to design health-insurance exchanges for any states not choosing to create their own.
“Her eyes just glazed over,” Starkowski said. “I really think if they were to come in to operate a federal exchange ”“ in essence if it was more than two or three states ”“ it would be impossible for them.
“If you have seen one state Medicaid program ”“ you have seen one state Medicaid program,” he added. “If they are going to operate in the Medicaid environment, they are literally going to have to come up with 40 to 50 different exchanges themselves. So I think what they”™re trying to do is trying to generate that enthusiasm from states (by) saying, ”˜we”™ll give you some guidance, we”™ll let you do it; but remember we”™ll give you some flexibility. If we come in and operate an exchange, your flexibility is probably going to be gone.”™”
The sophistication of those nascent state exchanges is all over the map, Starkowski said. The federal exchange is being modeled on one created in Massachusetts, which Starkowski said currently has 60 workers and costs $30 million annually to operate. By comparison, one in Utah costs about $600,000 a year for four employees to run, at least in the early going.
