Health Insurance Marketplaces: Two States’ Recipes for SuccessOctober 18, 2013 by Melissa McCormack
Despite the current government shutdown, health insurance marketplaces, or “exchanges,” opened for business in each state on October 1. These marketplaces are the most visible component of the Patient Protection and Affordable Care Act (ACA), also known as “Obamacare.”
Some states are letting the federal government operate their marketplaces. But the federal website, HealthCare.gov, has been plagued with web traffic and registration issues since its opening. In those states whose marketplaces are operated federally, this has left many would-be enrollees unable to shop for insurance coverage online.
Other states have elected to operate their marketplaces themselves, at the state level. The states running their own marketplaces have distinct advantages both in terms of reaching and educating their residents and enrolling them online. I took a close look at two such states – Oregon and Vermont – to identify how they’ve set their marketplaces up for success.
Models for Success: Oregon and Vermont
Oregon and Vermont represent opposite ends of the geographic spectrum. They also differ significantly in size. And despite both leaning left in the most recent presidential election, their political environments are very different, too. But they share a commitment to tackling their health insurance marketplaces head on.
Here are some key statistics for each state’s marketplace:
Oregon’s state-run marketplace is a corporation called Cover Oregon. Spokesperson Lisa Morawski says their corporate structure allows them to be “more nimble than a state agency while at the same time being just as transparent and accountable to the public.” Cover Oregon believes that working with local groups and building relationships the old-fashioned way – face-to-face – equips them to make their marketplace work as well as possible for as many people in the state as they’re able to.
Vermont’s marketplace, Vermont Health Connect, is housed within the state government. According to Deputy Commissioner Lindsey Tucker, Vermont leadership felt strongly that the state-based approach would give them the ownership and flexibility they wanted. That’s particularly important to Vermont because the state is pursuing universal care: they’ll transition to a single-payer system in 2017. In order to ensure their marketplace helps pave the way for universal care, Vermont wanted to be at the helm.
After speaking with leadership at the marketplaces of each state, I’ve identified some key themes in actions the marketplaces are taking to ensure they’re reaching and enrolling their communities.
Nailing the Web Portal Experience
It’s no secret that the primary challenge facing the federal marketplace is its website, HealthCare.gov. Since its opening on October 1, many visitors to the site have been unable to create accounts or log in using accounts they’ve already created.
States running their own marketplaces have a size advantage here. State sites don’t have the same traffic as the federal site, which serves as the portal for 36 different states. But Vermont and Oregon have a few other tricks up their sleeves to avoid the problems the federal site has faced.
The Vermont Health Connect web portal had some initial hiccups; many visitors encountered slow load times in the first few days. But unlike the federal marketplace, where different pieces of the site were built by different contractors, the Health Connect site was built by a single technology firm, which allowed Health Connect to work quickly and efficiently with the site builder to address problems. Since week one, they’ve improved load times by 60 percent. Today, over 5,000 unique accounts have been created on the web portal, which represents 11 percent of the state’s uninsured population just two weeks into open enrollment.
Cover Oregon knew that large scale website and technology launches rarely work perfectly right out of the gate. They also recognized that many of their residents have been waiting years for health insurance. Their priority for their web portal isn’t just getting it live – it’s getting it right. To that end, they’re using a phased approach: initially, website visitors have to work with a certified insurance agent or community partner in order to apply online. Full-fledged individual online enrollment will come later.
This approach allows Cover Oregon to stem and control the flow of traffic to the website. They can observe the site’s behavior to diagnose and address problems before they activate the individual online enrollment functionality. Spokesperson Ariane Holm says this approach “helps us to identify systems issues so that when the site is open to the public, it will be a positive experience.”
Utilizing Local Medicaid Resources to Improve Efficiency
Both states have made extensive use of their established healthcare resources – namely, their state Medicaid programs – to make enrollment run more smoothly for consumers and staff alike.
Vermont Health Connect is set up within the Department of Vermont Health Access, the state’s Medicaid plan. This differs from some other state-run marketplaces that are being operated through those states’ insurance divisions. Tucker explained that this model makes for makes for a smoother process for both Health Connect and Vermont residents.
The Vermont Health Connect call center that signs up residents for insurance plans during open enrollment is run by a company that’s been working with the state’s Medicaid agency for many years. That means the call center has an established knowledge of residents’ needs and concerns, as well as the state’s administrative processes.
Housing the marketplace within the state Medicaid agency also allows the state to “more seamlessly communicate with Vermont families and help them access the coverage they are eligible for without needing to pass them back and forth between different agencies,” says Tucker. Whether an individual is eligible for Medicaid or purchasing private coverage, they’ll all come through the Health Connect call center and website.
Cover Oregon Chief Communications Officer Amy Fauver says running their own marketplace allows them to regularly interact, face-to-face, with staff of the state’s Medicaid program. The two groups collaborate to design the most seamless experience for customers (i.e., Oregon residents).
Not unlike Vermont’s marketplace, the Cover Oregon website is a one-stop shop for both marketplace shoppers and Medicaid-eligible individuals. When consumers visit CoverOregon.com to search for plans, the website will instantaneously check for Medicaid eligibility as well. And phone calls for both Medicaid and the marketplace will be routed through Cover Oregon’s call center.
Using Targeted Marketing to Reach the Many and the Few
Though they’re not for-profit, health insurance marketplaces are essentially businesses. “We’re really a startup,” says Oregon’s Fauver. And like any business, one of the biggest initial challenges is marketing: making sure customers – in this case, state residents – know about and are interested in the service that is offered.
Cover Oregon is partnering with community-based organizations from around the state, including rural areas where traditionally underserved individuals live, to help educate local communities. This grassroots effort is allowing them to reach non-English speaking individuals and others that may have been overlooked by a federal effort.
Fauver says it would be easy to focus only on highly populated areas. “We could probably reach all of our numbers if we wanted to just by advertising in the Portland metro area,” she explains. “But that doesn’t reach our mission of making sure that all Oregonians know about the opportunities that are here.”
Additionally, Cover Oregon’s ad campaign makes use of local musicians and showcases scenery from across the state. “We’ve all seen ads geared toward a national audience,” says Fauver. “Sometimes they’re meaningful to you and sometimes they’re not.” Cover Oregon is tailoring its ads to its friends and neighbors, and knows what they’ll respond to. “We couldn’t do that if we didn’t have a state-based [marketplace],” says Fauver.
Another selling point for residents is that Cover Oregon’s call center and website are locally staffed. “There’s something to be said for when the person who’s picking up the phone to answer questions is also somebody you might run into at the grocery store,” Fauver says, noting that staff “hear from their friends and families what’s working and what’s not working as well,” allowing them to course-correct quickly if needed.
Vermont’s Tucker says operating their own marketplace means they’ve taken on the weighty responsibility of educating everyone in the state. But because the people running the marketplace are Vermonters themselves, they know how to reach their residents and what Vermonters will respond to. “We are able to brand in a way that makes us recognizable for Vermonters,” Tucker explains. “We are able to use images and reference points that Vermonters know and understand.”
CMS spokesperson Tasha Bradley points out that, regardless of whether a consumer is in a state-based marketplace or a federally-operated marketplace, coverage will begin in January 2014 with the same requirements across all states (e.g., no more denial of coverage for pre-existing conditions). But Bradley also acknowledges that because states know the needs of their citizens best, state involvement in building the marketplaces is ideal.
Working With Stakeholders to Drive Down Costs
Tucker summarizes the benefit of Vermont running its own marketplace vs. defaulting to a federally-run marketplace succinctly: “We wouldn’t have had the same kind of control.” Part of this control means Vermont has worked with the insurance carriers in the state to arrange for sole control of individual and small business insurance. In other words, any individual or small business group insurance will have to be purchased through Health Connect.
Tucker is quick to point out that this heavy-handed approach brings with it cost benefits for the state’s taxpayers. It allows Vermont to streamline administrative functions, which results in lower premiums and savings on administrative costs, while creating a simpler experience for customers to boot. Tucker explains that “having responsibility and ownership for the marketplace allowed us to work in a more direct way with our stakeholders, including our [health insurance] carriers.”
Vermont also collaborated with its carriers to design an essential health benefit package – a set of service categories that must be covered by all health plans in the marketplace – that is tailored to the needs of Vermonters.
Cover Oregon’s relationship with its insurance carriers is an important component of its success, too. Fauver attributes their ability to build close relationships with carriers to the communication enabled by a state-based model. “Stakeholders at all levels have a much greater opportunity to shape and influence the direction of the marketplace when they can actually go talk to the people who are running it,” says Fauver.
She says the close relationships with carriers have made a “huge difference” in terms of cost. Under the ACA, all carriers must submit their rate and plan information at the same time, making differences in rates and terms very clear. When Cover Oregon was able to evaluate carrier rates on an even playing field and discuss discrepancies with carriers face-to-face, rates were driven down. “We saw the forces of competition working the way they’re supposed to, and it compressed rates,” Fauver explains.
The marketplaces in each state are trying to accomplish so much so quickly, and Fauver acknowledges that not everything will be perfect. But as a state-based marketplace, she says, “We’ll really have the opportunity to tweak and fix and optimize what we’re doing at a really localized level, and the people of Oregon will be better served because of that.”
Vermont’s marketplace echoes that sentiment, noting that a by-the-people-for-the-people approach will be key to their success. Says Yahr: “Vermont Health Connect will ultimately be successful because it’s a system built for Vermonters, by Vermonters. Vermont took control of creating a health insurance marketplace that reflects the traditions and preferences of Vermonters.”
Thumbnail image created by David Harris.