Health Reform and a Modest Proposal: Outsourcing the Federal Exchange

In previous blog posts, I have attempted to highlight the absolutely critical need for a functional, user-friendly Exchange for Iowa as outlined in the blueprint for health reform that the Affordable Care Act (ACA) laid out. Iowa’s failure, at the beginning of the ACA process, to establish an Iowa exclusive Exchange—an Exchange operated by Iowans for the exclusive enrollment of Iowans—resulted in a hybrid or partnership between the State of Iowa and the federal Exchange (healthcare.gov). The results of that partnership have been neither reliably functional nor user-friendly. On Monday, March 31, I met with members of Senator Tom Harkin’s staff in Washington, D.C., and presented to them the following proposal. The proposal is self-explanatory. Since then, there are reports that the state of Iowa has applied for federal resources from the Department of Health and Human Services to plan for a state-managed, state government-operated Exchange.

Multiple factors in both my personal and professional life, including a trip to Japan, a squirrel in my attic, water in my basement, an extremely busy medical practice, the arrival of a medical student who will work in my practice for a month, and quite frankly, trying to determine the facts regarding the State’s effort to establish its own exchange, I have not been able to schedule a meeting with federal officials regarding this proposal. I present this information today as a modest proposal to establish a non-political process that could and should greatly improve the health insurance needs of Iowans.

Proposal: Franchise the Federal Exchange to Non-profit State Entities

Request: Senator Harkin’s office arrange meeting between federal Exchange officials and Iowans regarding a possible Executive Order or whatever federal authorization is necessary to allow non-profit entities to franchise an independent Exchange to operate their own website and organization.

Rationale: Some states currently do not have, and probably will not be able to establish state-based exchanges using the current process due to particular political realities.

Iowa Specific Rationale: Despite years of planning, millions of dollars received by the State of Iowa, a bill in the Iowa Senate, and support of House Republicans and Democrats for a similar non-profit exchange program, the consequences of a Republican Governor and Republican majority in the Iowa House mean no independent state-based Exchange in Iowa. The hybrid/partnership Exchange will cease in 2015 when states are required to operate the own Exchanges, and the deadline to request monies to start state-based Exchanges is June, 2014. Total number of Iowans enrolled in private health insurance via the hybrid/partnership Exchange, approximately 15,300 (enrollment information from the Office of the Assistant Secretary for Planning and Evaluation (ASPE), Oct 1,2013 through Mar 1, 2014) is the lowest number of enrollments per state, based on state-by-state enrollments through March 1, 2014, excluding South Dakota, which has lowest total enrollment in the contiguous states.

Harms: Thousands of Iowans need one-on-one in-person assistance to sign up for the Exchange as evidence based on the experience of the nonprofit state-based Exchange in Colorado indicated. The health coaches in my practice are Certified Application Counselors (CACs) and have signed up 30-40 individuals on the Exchange.  If my 1,000 fellow family physicians in Iowa had health coaches who were also CACs, Iowa might have signed up another 20,000 to 30,000 individuals. A nonprofit state-based Exchange could work with, motivate, and cajole providers to follow that vision to benefit their patients. Neither a federal Exchange nor a state-managed Exchange will ever have that flexibility or agility. When enrollment began in October 2013, more than one-quarter of Iowa’s counties–the most rural counties–did not have Navigators to assist in enrollment. Focus groups of uninsured patients conducted by CoOportunity Health indicated uninsured patients trust their primary care physician with advice regarding health insurance. Iowa is an extremely “place proud” state and from a public relations perspective, a state-based Exchange named “Iowa State Health Fair” or “HAWK-I” would be more Iowa identifiable, Iowans would relate to it, and allow much more acceptance than healthcare.gov.

Cost: We could save Iowans money. Colorado’s Exchange costs 1.75 percent of premium dollars to use; the federal Exchange costs 3.5 percent.  In addition, many of the current Wellmark policy holders who renew non-ACA compliant policies this year are being denied the opportunity for federal subsidies. One of my patients saw his Wellmark premium of nearly $700 per month become a CoOportunity premium with subsidies that made his premium $177 per month.

Current experience: The partnership/hybrid exchange is cumbersome, the website is too often down, and it has an unbelievably bad reputation in many rural areas in Iowa. More than 16,000 potential Iowa Medicaid patients, including some of my patients, remained in enrollment limbo for an unacceptably long period of time, in spite of millions of Federal grant resources spent to establish a viable information transfer technology link between healthcare.gov and the Iowa Department of Human Services.

Politics: This option would spur recalcitrant states to developing their own nonprofit, state-based Exchange.

Motivation: Iowa was told at the onset by the former head of the federal Exchange program that Iowa should have its own state-based Exchange. Additionally, Iowans are best served by Iowans–people they trust.

Protection: Have the federal Exchange establish any requirements necessary for a nonprofit entity, with an independent board of directors to be approved; a worst case scenario would be the process defaults back to the federal Exchange.

Support: Wellmark and the Des Moines Chamber of Commerce want a state-based Exchange. Many legislators, Iowa residents, and health care providers also want an independent state-based Exchange.

Path Forward: Use Colorado’s blueprint for a nonprofit entity and use the Kentucky website and technology model. Seek input and best practice models from states with high enrollments. Have all stakeholder groups represented on the board of directors. To date, we have had a number of positive and supportive conversations with, and offers of support from Colorado (enrolled 133,000), Kentucky (enrolled 55,000), and Connecticut (enrolled 57,500), among others.

Conclusion: The revised national goal for enrollment in 2014 was 7 million; the goal by 2018 is 25 million. The Iowa goal will not be reached using the cumbersome federal Exchange or a similar state-managed, state-operated model. Iowa should have an independent nonprofit Exchange without any political influence brought to bear. Iowans will benefit from an Exchange independently managed by Iowans in the best health care interests of all Iowans.