State Marketplaces’ Proof Is in their Performance at Congressional Oversight Hearing

Last week, six state-based marketplace directors (CA, CT, HI, MA, MN, and OR) testified before the U.S. House of Representatives Energy and Commerce Committee’s Oversight and Investigations Subcommittee, where they faced tough questions on their marketplace performance, impact and future prospects. The hearing was notable for its intensive focus on operations, signaling a new emphasis on marketplace performance and outcomes. For those who missed it, here’s our recap on the highlights.
Marketplace Enrollment and Coverage: Marketplace and Congressional leaders shared evidence of a number of positive impacts that state-based marketplaces have had on the health care system including lower rates of uninsured, increased plan choice and competition, and steady or reduced growth of health insurance plan pricing. Five states, including Massachusetts, have lowered their uninsurance rates to below five percent. Connecticut testified that marketplace enrollment has exceeded federal goals by 200 percent while competition and oversight have kept marketplace premium rates flat. California noted that its active purchaser strategy, which requires issuers to offer the same benefits package so consumers can easily compare plans, has resulted in improved access to preventive care for most enrollees. California also testified that each resident will have at least three plans to choose from during the 2016 open enrollment period.
Improving Governance and Project Management: Subcommittee members and marketplace leaders freely admitted that marketplaces had seen their share of implementation challenges, including tight timeframes and mistakes in managing state and vendor work. States testified about changes they are implementing to improve operations, including reorganized governance structures, stricter project management, and new, more robust workplans. Massachusetts has replaced managers and hired for skills in IT systems oversight, and reestablished a formal governance structure with clearer reporting authority to the Secretary for Health and Human Services to strengthen the integration of marketplace and Medicaid systems. Oregon has moved its marketplace from an independent entity to a state agency charged with insurance market oversight, which allows for improved coordination, accountability, and economies of scale in staffing. Minnesota and are establishing new oversight and advisory authorities. Also suggested was stricter adherence by states and CMS to performance measurement gateways already developed for the marketplaces such as adherence to marketplace Blueprints.
Financing and Sustainability: Subcommittee members peppered state marketplace leads with detailed questions about budgets and sustainability. All states, reported they are on track to achieve financial sustainability, except Hawaii, which will transition its marketplace to the supported state-based marketplace model. Members raised concerns and signaled further investigation into state marketplaces’ operational and establishment spending, especially the use of federal establishment grants. While these grants were intended to only fund activities related to establishment, not operations, of the marketplaces, a lack of clarity on the definition of these types of activities has led to some confusion over appropriate use of funds. All states testified that they had not spent federal grants outside of the authority given to them under CMS, with the exception of Hawaii, which noted one item that it is in the process of reconciling with auditors before funding would be released. Where they had figures available, states shared details about operational and establishment budgets, with others expressing ability to review and report back further details to the Subcommittee. States also clarified that any funds granted to a state, but not ultimately approved for use by CMS would remain with the federal government.
Addressing Consumer Needs and Services: Each state has taken concrete steps to improve system functionality and implement new tools to better serve consumers. Many states reported positive utilization and consumer satisfaction survey findings during last year’s open enrollment period. Minnesota reported that more than 500,000 individuals had used their site, MNSure, to compare, shop and purchase coverage.  Connecticut reported that 96 percent of consumers found the AccessHealth CT site easy to use. For the next open enrollment period, Minnesota is adding functionality to its enrollment system, improving website performance and Medicaid system functionality.  Massachusetts is planning to improve customer service by adding four additional walk-in centers and evening and weekend hours to reduce call center demand.
Focus on Performance: Subcommittee members repeatedly asked for evidence of state performance, seeking a detailed accounting on state spending, state governance and oversight, federal audits, and renewal data.  While state exchanges are already complying with substantial federal and state oversight and reporting requirements, as detailed in a NASHP brief released this week, the hearing indicates an increased focus on state outcomes and performance that state exchanges will want to heed for future years. Also underscored was that the marketplaces, by their nature as IT projects, are not static, and will continue to evolve and improve over time, something that should be accounted for as part of future oversight.
Looking ahead, most state marketplace leads said covering the remaining uninsured and for the marketplace were among their top priorities.  . States and members also discussed the role of the marketplaces in the context of health care reform including improving access to higher value care. Importantly, states highlighted the value of flexibility as state-based marketplaces to tailor marketplace policies and structures to adapt to unique state needs and priorities (e.g., providing subsidies to a greater range of low-income individuals in Massachusetts or pursuing an active purchaser model to set benefit standards in California).  How these and other state marketplaces demonstrate their value in innovating and improving coverage, in their own states and for the nation, will certainly be a topic for continued conversations in the years ahead.