Article by: Jackie Crosby, Star Tribune
Officials say the new insurance exchange hub will be ready by Oct. 1, though some functions won’t be in place yet.
The no-frills space where high-tech wizards are building Minnesota’s health insurance exchange looks like a war room for a political campaign.
IT consultants work elbow to elbow around computers in a center island. Along one wall, stripes of blue tape and clusters of neon-colored notes demark key dates on the march to an unrelenting Oct. 1 launch date.
It’s a labyrinthine process that ultimately will connect a brand new pathway for buying health insurance with Minnesota’s aging computer system and a massive federal hub.
Thus far, the state is hitting the required milestones to prove that the exchange, called MNsure, will be ready for open enrollment in October. But in one indication of the challenge at hand, officials for the first time are dialing back expectations for what to expect out of the gate.
April Todd-Malmlov, MNsure’s executive director, alerted the MNsure executive board in late June that some low-income workers and individuals who are new to public health programs will be automatically assigned an insurance plan during MNsure’s first months. That’s a departure from what proponents have touted as a key advantage of the exchange — consumer choice.
Some bells and whistles, such as being able to compare hospitals and doctors, will come in a series of planned upgrades.
“We know we’ll run into bugs, little glitches,” Todd-Malmlov said. “It won’t be perfect.”
The state exchanges, marketplaces where people can comparison shop for coverage, are an essential platform to implement the most sweeping reform elements of the Affordable Care Act starting in 2014.
In Minnesota, about 71 percent of workers get insurance at the workplace. The exchanges are meant to help everyone else — individuals, businesses with fewer than 50 workers and those in public health programs.
A key to making it work is getting the agency’s 35-year-old computer system up to snuff. Today, the Department of Human Services still sends out thick paper packets to enroll people in public health programs at significant cost to taxpayers and great hassle to citizens.
It’s a “monumental undertaking,” said Scott Keefer, vice president of government affairs at Blue Cross and Blue Shield of Minnesota. “Someone likened it to trying to get your Blackberry to talk to your rotary phone to talk to your iPhone.”
Responsibility for overseeing the construction of the complex technology behind the MNsure exchange lies with Maximus, a $1.2 billion publicly traded company based in Reston, Va. Maximus runs call centers and administers government programs in the United States, Canada, Australia and Saudi Arabia. The company also has a hand in exchanges in New York, Connecticut, Hawaii, Vermont and Maryland and will run call centers in some of the 34 states that will use federally run exchanges.
Minnesota hired Maximus because it “came with a whole package,” Todd-Malmlov said. That package included relationships with the three companies that now are doing the heavy lifting on the IT side: EngagePoint of Fort Lauderdale, Fla.; IBM’s Curam Software and EngagePoint of Waukesha, Wis.
Maximus’ role is as a grand conductor — making sure the subcontractors stay on track and the regulatory requirements are met.
Maximus and its subcontracts must build the architecture for a system that will take data from hundreds of thousands of individual Minnesotans, verify it with a half dozen state and federal systems, overlay it with information provided by health plans and spit out a simple set of choices the average citizen can understand. Underneath the hood, more than 40 software programs are running to keep the data private, and verify such things as household income, citizenship and other workplace insurance offerings.
When the switch gets flipped, MNsure will debut as a single website that will calculate how much premiums will be and whether a person qualifies for a public program or a subsidy to make premiums more affordable. The site must be able to collect money to pay the insurance companies, and tie into a call center or online chat room to answer questions.
Since 2010, the federal government has poured more than $394 million into states to help get exchanges built, according to a recent U.S. Government Accountability Office report. Minnesota has received about $110 million for the exchange, and about $165 million as of the end of April. About $46 million is going to pay Maximus and subcontractors. The funds also have gone to hire MNsure staff, and to market and run the exchange for the first year.
The money flowing into the state has leaders of some Twin Cities technology companies shaking their heads.
“It’s striking to me that the state has moved in this direction, to go to a firm like Maximus when there are companies right here in Minnesota that could have done the exact same thing for a fraction of the cost,” said John Reynolds, CEO of CieloStar, a technology start-up that has built a private insurance exchange for companies around the country but isn’t going after government exchange work.
“The state has invested a significant amount in the infrastructure. And, ongoing, the amount of money it’s going to take to keep this rolling — it’s a layer of cost and complexity on top of what is already an expensive system. I’m not sure in the end it’s going to get anywhere near the uptake that they’re predicting.”
Certifi is among the local companies working on state exchanges. The Hopkins company is handling the accounting billing and payment for the Utah exchange. Bloomington-based Ceridian was gunning for the state’s business but pulled out of the process midstream. Optum, a division of Minnetonka-based UnitedHealth Group, runs exchanges around the country but was precluded from applying in Minnesota because the state restricted companies with ties to insurers as a conflict of interest.
Minnesota officials assert that the IT contract with Maximus is the smallest among the states that are building a system they intend to run and not outsource.
Todd-Malmlov said the state has saved money because Maximus and the same team of subcontractors are building the insurance exchange in Maryland. The two states have been able to save costs by piggybacking on each other’s work. Minnesota plucked the work done on small business enrollment “lock, stock and barrel,” Todd-Malmlov said, and Maryland borrowed from Minnesota’s work on identity management. Building the exchange on existing computer system in the state also is more cost-effective, though challenging.
The exchange itself is expected to cost $50 million to $60 million to run the first year but will need to be self-sufficient by 2016.
Todd-Malmlov said she aims to build a system that will become a “state gem,” even if the process of joining old systems with the new, given the racing deadline, is coming with some hitches.
At a demonstration for the federal government a few weeks ago, MNsure successfully tapped into the federal hub to verify Social Security, citizenship and eligibility for tax credits, in 49 seconds or less.
“We’ll be ready to go,” Todd-Malmlov said. “It’s going to work and it’s going to perform the basic functions. Is it going to be perfect on Day One? No. But it is a significant amount of work in a small period of time that will provide service at a level people haven’t had before.”