GAO: State, Federal Officials Missed Key Exchange Deadlines
Federal and state health officials appear to be delayed in setting up new health insurance exchanges for small businesses and consumers and it "cannot yet be determined" whether the exchanges will be ready to open in October, according to a pair of reports released Wednesday by the Government Accountability Office, the Wall Street Journal reports.
Health Insurance Exchanges Background
The ACA established separate exchanges for small businesses and individual consumers through which uninsured U.S. residents could purchase health coverage. The Congressional Budget Office has estimated that about two million U.S. residents will gain coverage through the small business exchanges and seven million U.S. residents will enroll in the individual insurance exchanges in 2014. Seventeen states have committed to running their own exchanges, while the federal government will oversee exchanges in 33 states (Radnofsky/Needleman, Wall Street Journal, 6/19).
GAO Report Findings Show Major Work Still Needed
In the reports, GAO acknowledged that state and federal officials have made significant progress in developing the regulatory framework and guidance to implement the exchanges (Alonso-Zaldivar, AP/Sacramento Bee, 6/18). However, GAO added that state and federal officials still have major work to complete before open enrollment begins Oct. 1, noting that it is unclear if they will meet the deadline.
The reports identified several issues facing state and federal officials, including:
- Officials creating the small business exchanges still must review plans that will be sold and train and certify consumer aides who will help companies and individuals enroll in plans (Wall Street Journal, 6/19); and
- A federal "data hub" designed to help individuals determine their eligibility and enroll in plans offered through the exchanges has only undergone initial testing (AP/Sacramento Bee, 6/18).
According to the reports, the 17 states running their own exchanges have missed deadlines on an average of 44% of key activities that were scheduled to be completed by the end of March.
"While interim deadlines missed thus far may not impact the establishment of exchanges, any additional missed deadlines closer to the start of enrollment could do so," the reports warned (Wall Street Journal, 6/19).
However, the reports said that some states with Republican-controlled legislatures or governors have made efforts to accommodate the law, noting that 15 states with federally run exchanges are expected to carry out at least some functions of the exchanges.
The reports also provided the first look at what the federal government has spent on the federal exchanges and the data hub. The reports said as of March the Obama administration has spent nearly $394 million on exchange efforts, mostly through payments to 55 different contractors, including:
- $84 million to CGI Federal, which is building the federal exchange computer infrastructure;
- $55 million to Quality Software Services, which is building the data hub; and
- $38 million to Booz Allen Hamilton to provide technical assistance for enrollment and eligibility.
The reports estimated that the Obama administration would need an additional $2 billion in the next fiscal year to create and operate the federal exchanges. However, it is unclear if Congress will approve the extra $1.5 billion needed to reach the total (AP/Sacramento Bee, 6/18).
GOP Lawmakers Criticize ACA Implementation, Citing GAO Report
GOP lawmakers used the GAO reports in their ongoing criticism of the ACA, the Journal reports.
House Committee on Small Business Chair Sam Graves (R-Mo.) said, "This GAO report confirms our suspicions about the implementation of the health care law," adding, "With each passing day it appears the creation of the exchanges are very much in doubt" (Wall Street Journal, 6/19).
Sen. Orrin Hatch (R-Utah) in a statement said that the reports show the "[ACA] isn't ready for prime time, and come October millions of Americans and small businesses are going to be the ones suffering the consequences" (AP/Sacramento Bee, 6/18).
CMS Director Says Exchanges Will Be Ready On Time
In related news, CMS Deputy Administrator Cindy Mann last week said that she is confident that states will be ready to enroll millions of newly insured U.S. residents in October, Modern Healthcare reports. Speaking at the Washington ACO Summit, Mann acknowledged that there will be a few glitches that need to be addressed, such as improving the Medicaid enrollment process. Mann said states will likely not be ready to implement "plan A" during the first year and instead will rely on "plan B" (Daly, Modern Healthcare, 6/18).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.