Obamacare Fails: Where Four State Health Exchanges Went WrongMuch has been written (and will continue to be written) about the spectacular failure of health insurance exchanges in Minnesota, Massachusetts, Oregon and Maryland—all blue states that support the Affordable Care Act.
By Charles Ornstein, ProPublicaThis post originally appeared on ProPublica.
Much has been written (and will continue to be written) about the spectacular failure of health insurance exchanges in Minnesota, Massachusetts, Oregon and Maryland2014all blue states that support the Affordable Care Act.
All were woefully unprepared for their Oct. 1 launch, and unlike HealthCare.gov, the federal marketplace, they are still having trouble getting back on their feet. As a result, enrollment in those four states has lagged behind other states, including many that actively oppose the health law.
The New York Times recently reported on how problems in these states could give Republican candidates an opening. “Last month, the Republican National Committee filed public-records requests in Hawaii, Maryland, Massachusetts, Minnesota and Oregon seeking information about compensation and vacation time for the exchange directors, four of whom have resigned. All five states have Democratic governors whose terms end this year. Three of them 2014 Gov. Neil Abercrombie of Hawaii, Gov. Mark Dayton of Minnesota and Gov. John Kitzhaber of Oregon 2014 are seeking re-election,” The Times reported.
One common element emerging in the coverage of these exchanges is that at least some state employees knew they were heading for disaster but didn’t take action early enough to remedy it. All the states have blamed some, if not all, of their problems on outside tech contractors. Here’s a sampling of what has been reported in each state.
The Oregonian newspaper has done a great job chronicling the unfolding disaster with Cover Oregon. The state is the only one in which no one has been able to enroll using the website. In an article last month, the newspaper reported that a technology analyst at Oregon’s Department of Administrative Services warned last May that managers at the exchange were being “intellectually dishonest” in claiming it would be ready Oct. 1.
As the Oregonian set forth in its findings:
- The project’s significant flaws were well documented dating back to November 2011. Multiple independent analysts repeatedly raised questions aboutpoor management along with strongdoubts that it could be operational by the Oct. 1, 2013 deadline.
- Cover Oregon leaders wavered between despair and an almost evangelical enthusiasm that they could complete the site. In the end they charged ahead, piloting an unfinished, largely untested exchange project right up to the Oct. 1 go-live date with no backup plan ready to go.
- Senior officials in Gov. John Kitzhaber’s office and elsewhere read at least some of these warnings but took no significant steps to intervene, apparently after being convinced by others the project was on track.
- A key official in the massive IT project took steps to silence the critics. The Oregon Health Authority last January withheld payment from the company hired to monitor the project, claiming its persistent criticism was inaccurate and inflammatory.
The director of Cover Oregon left on medical leave in December. The Oregonian also has a good piece comparing Oregon’s failures with the successes of Kentucky, whose exchange has been lauded.
Blame is being spread around in Minnesota, where the MNsure exchange is sputtering and its call center is unable to keep up with demand. As news site MinnPost reported last month: “The vendors are blaming the state. Gov. Mark Dayton and state officials are blaming the private companies who built the faulty technology, and MNsure leaders are quick to point out that they weren’t around when controversial decisions were made. Republican lawmakers, meanwhile, are saying that the governor needs to take responsibility for the project.”
MinnPostreported that despite their efforts to blame vendors, state officials were responsible for key decisions:
Newly released contract documents suggest the state and MNsure leaders had a more direct role in the health exchange’s many missteps than they have publicly acknowledged.
In recent weeks, Gov. Mark Dayton and MNsure officials have increased their criticism of vendors, blaming the private technology companies for some of the underlying problems and glitches with the health exchange’s operation.
However, in early May, the state of Minnesota in effect took over responsibility from its lead contractor, Maximus Inc., for constructing MNsure’s technical infrastructure, according to contract amendments released to MinnPost by MNsure.
The new documents show that the exchange staff quietly made a significant change to its key contract for building MNsure 2014 just months after making major revisions to the timeframe and size of the project.
Dayton later said he was unsure if senior MNsure staff were keeping him apprised of the serious issues with the exchange as soon as they came up.
The Star Tribune has reported on lengthy delays at the exchange’s call center and how officials in charge of the project received bonuses before its disastrous launch.
As in Oregon, the head of Minnesota’s exchange also resigned.
In many ways, Massachusetts should have been a leader in setting up its own exchange. After all, its 2006 health reform law signed by then-Gov. Mitt Romney has been cited as the model for Obamacare. But the state’s exchange, the Massachusetts Health Connector, has fumbled.
The Boston Herald reported last month that, “State officials overseeing the Health Connector website knew as early as February 2013 2014 some nine months before launch 2014 that parts of the $69 million Obamacare gateway would probably be delayed, public records obtained by the Herald last night revealed.”
The Boston Globe followed up with another report:
Massachusetts officials knew in July, three months before the launch of the state’s ill-fated health insurance website, that the technology company in charge was far behind on building the site and that there was “a substantial and likely risk” it would not be ready, according to a state official’s memo.
The website launched on Oct. 1 was incomplete and riddled with errors that frustrated consumers, blocked some from getting coverage, and required the state to move tens of thousands of people whose applications could not be processed into temporary insurance programs.
The head of the Massachusetts Health Connector Authority, which runs the insurance marketplace, was copied on the July memo. But the executive director, Jean Yang, and her staff never told the Connector board during its monthly public meetings that the project was off track, according to meeting minutes.
The Globe reported in a separate story how an untold number of people who “applied for Connector plans without financial assistance have not gotten coverage, because their payments were lost or somehow never linked to their accounts.”
John J. Monahan, a columnist for the Worcester Telegram & Gazette, put it like this last weekend:
Massachusetts’ universal health care program was the model for Obamacare. And now, it seems, the Obamacare website fiasco has been modeled by Massachusetts.
The state contracted with the same software company that messed up the launch of the Obamacare website to redesign its Health Connector website for people to buy insurance. It was scheduled to be working Oct. 1 to renew insurance for Jan. 1. It still isn’t working.
The Maryland Health Connection, like the exchanges in other states, knew well in advance that it wasn’t ready to launch, but the problems weren’t fixed in time.
The Washington Post reported last month how “senior state officials failed to heed warnings that no one was ultimately accountable for the $170 million project and that the state lacked a plausible plan for how it would be ready by Oct. 1.”
Over the following months, as political leaders continued to proclaim that the state’s exchange would be a national model, the system went through three different project managers, the feuding between contractors hired to build the online exchange devolved into lawsuits, and key people quit, including a top information technology official because, as he would later say, the project “was a disaster waiting to happen.”
The repeated warnings culminated days before the launch, with one from contractors testing the Web site that said it was “extremely unstable” and another from an outside consultant that urged state officials not to let residents enroll in health plans because there was “no clear picture” of what would happen when the exchange would turn on.
Within moments of its launch at noon Oct. 1, the Web site crashed in a calamitous debut that was supposed to be a crowning moment for Maryland officials who had embraced President Obama’s Affordable Care Act and pledged to build a state-run exchange that would be unparalleled.
Weeks later, the Baltimore Sun’s Meredith Cohn wrote a piece about just how much trouble she personally had trying to enroll:
For a chunk of two recent days, I tried to buy insurance on the Maryland health exchange.
My editors asked me to do this because Gov. Martin O’Malley recently told a national television audience that the “website is now functional for most citizens.”
They wanted to know what “functional” meant, especially after hearing stories from consumers about a glitch-prone website created under the Affordable Care Act for the uninsured and underinsured. Marylanders have described frozen screens, lost information, error messages and even mistaken identity.
My own enrollment took 5 hours and 22 minutes over two days, two calls to the exchange’s call center, seven times entering my personal information, two computers and two web browsers.
Maryland’s exchange director resigned in December. Last week, Maryland Gov. Martin O’Malley signed a law that would provide a backup method for hundreds of residents to get coverage effective Jan. 1 if they can show that they tried unsuccessfully to get coverage from the exchange.
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