GAO: HIX Unready by October?

In two reports examining the status of health insurance exchanges, the U.S. Government Accountability Office raises concerns that "much remains to be accomplished" by the Oct. 1 enrollment date.

The federal government's watchdog agency is raising concerns that the health insurance exchanges created under the Patient Protection and Affordable Care Act will not be operational by the start of the October 1 enrollment period.

The Government Accountability Office issued two reports this month. One report examined the status of the Centers for Medicare and Medicaid Services' efforts to establish federally facilitated health insurance exchanges. The second report examines CMS and state efforts to establish the insurance exchanges for small businesses.

Both reports reach the same conclusions. "Much progress has been made, but much remains to be accomplished within a relatively short amount of time," the GAO said in both reports.

"CMS's timelines provide a roadmap to completion; however, factors such as the still-evolving scope of CMS's required activities in each state and the many activities yet to be performed—some close to the start of enrollment—suggest a potential for challenges going forward," GAO said in Status of CMS Efforts to Establish Federally Facilitated Health Insurance Exchanges.

"And while the missed interim deadlines may not affect implementation, additional missed deadlines closer to the start of enrollment could do so. CMS recently completed risk assessments and plans for mitigating risks associated with the data hub, and is also working on strategies to address state preparedness contingencies. Whether these efforts will assure the timely and smooth implementation of the exchanges by October 2013 cannot yet be determined."

In a June 6 letter responding to the GAO concerns, Jim R. Esquea, assistant secretary for legislation for the Department of Health and Human Services, assured the auditors that "on Oct. 1, 2013, a health insurance marketplace will be open and functioning in every state."

CMS is supposed to operate "federally facilitated exchanges" in 34 states that have elected not to run state-based exchanges in 2014. Fifteen of those 34 states are expected to help CMS operate their FFEs in one capacity or another, but GAO says that exact role continues to evolve, even with the open enrollment period looming only four months from now. GAO noted that CMS approved states' exchange arrangements on the condition that the states actually do what they said they were going to do to make the exchanges operational. However, it's not clear how that process is going. If states don't meet their part of the deal, CMS said it would step in and carry out the necessary steps to make the exchanges operational.

"CMS is also depending on the states to implement specific FFE exchange functions, and CMS data show that many state activities remained to be completed and some were behind schedule," GAO said.

GAO says many other provisions that are the responsibility of CMS remain to be completed and some were behind schedule, especially functions related to "core exchange functional areas of eligibility and enrollment, plan management, and consumer assistance."  

"While CMS has met project schedules, several critical tasks, such as final testing with federal and state partners, remain to be completed. For plan management, CMS must review and certify the qualified health plans (QHPs) that will be offered in the FFEs. Though the system used to submit applications for QHP certification was operational during the anticipated time frame, several key tasks regarding plan management, including certification of QHPs and inclusion of QHP information on the exchange websites, remain to be completed. In the case of consumer assistance, for example, funding awards for Navigators--a key consumer assistance program--have been delayed by about two months, which has delayed training and other activities," GAO said.  

The wording of the conclusions in the second report—Status of Federal and State Efforts to Establish Health Insurance Exchanges—was virtually identical to that of the first report, but added that "in commenting on a draft of this report, HHS emphasized the progress it has made in establishing exchanges, and expressed its confidence that exchanges will be open and functioning in every state by Oct. 1, 2013."

The Small Business Health Options Program (SHOP) was approved in 18 states, and for 17 states that operate health insurance exchanges for individuals. CMS will operate a federally facilitated SHOP and an individual exchange in the remaining states. As with the status of the overall FFE programs and their relationships with particular states, the GAO study of SHOP programs found them in varied stages of evolution.

"For example, funding awards and development of a training curriculum for a key program that will provide outreach and enrollment assistance to small employers and employees have been delayed by about two months," GAO found. "Many key activities remained to be completed—some scheduled for near the start of enrollment in October 2013—and, as of May 2013, states were behind schedule in completing some key activities. In particular, about 44% of the key activities CMS initially targeted for completion by March 31 were behind schedule, although CMS reported that it had revised many target dates and other delays were not expected to affect exchange operations."

In his identical responses to both GAO reports, HHS' Esquea touted the "tremendous progress" that has been made in the three years since the PPACA became law.

"Earlier this year we successfully administered the qualified health plan submission process for the federally facilitated Marketplace. We published the final single streamlined application. We have announced several grant and contract programs that provide consumer assistance functions. We are in the final stages of finalizing and testing the IT infrastructure that will support the application and enrollment process," Esquea said in his letter.

"HHS is extremely confident that on Oct. 1 the marketplace will open on schedule and millions of Americans will have access to affordable quality health insurance."