KHI News Service

The Kansas insurance marketplace that might have been

Colorado’s insurance marketplace up and running smoothly under former Kansas IT leadership

By Phil Cauthon | October 21, 2013

A story praising the 'strong start' to Colorado's state-based insurance marketplace, published Sunday Oct. 20 by The Gazette based in Colorado Springs. By contrast, the launch of the federal insurance marketplace — which serves states that opted not to run their own, including Kansas — has been beset by problems.

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Perhaps it is a case of could-have-been.

Two years ago, Gov. Sam Brownback rejected a $31.5 million federal grant to set up a health insurance marketplace tailored for Kansas — defaulting instead to the federally run marketplace that was launched Oct. 1 but which continues to be beset by problems.

Gary Schneider — the technology expert who was poised to lead Kansas' marketplace development until Brownback opted against it — left instead for Colorado, one of 16 states that chose to run their own marketplace. He now is the IT project manager for the Colorado Health Benefit Exchange.

In Colorado, so far, things are going smoothly, Schneider said.

More than 700 people have enrolled in insurance plans using Connect for Health Colorado, the state’s marketplace. And more than 30,000 people have created accounts on the website allowing them to compare plan options and see if they qualify for tax subsidies.

"We had some bumps in the road with our system when we first turned it on, but most of those have been resolved," Schneider said.

Like the federal marketplace, Colorado's website initially was overwhelmed with traffic.

"Until you turn a system like this on ‘live’ and experience a real load, you can't be sure how it's going to react," Schneider said. "That was the first couple days, but things got pretty stable pretty quick."

Persistent problems

CGI, the contractor that built the Colorado marketplace, also built the federal marketplace. But Schneider said the fact that so many states went the way of Kansas — opting to use the federal marketplace, — greatly complicated the task for the national government.

Photo courtesy CHBE.

Gary Schneider, IT Project Manager for the Colorado Health Benefit Exchange.

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"If they had anticipated 35 or so states being in the federal marketplace, I'm sure they would have done some things differently,” Schneider said. “But that just panned out in the last 18 months, where states made these decisions to opt out. I don't think they anticipated more than a handful of states to be in the federal marketplace.”

He wasn't surprised that the federal marketplace is off to a rocky start, Schneider said, “given the tight deadline and the fact that so many states opted to not have a state-based marketplace. That made their task extremely challenging...because there are business rules that apply to different states."

President Obama today held a press conference to reassure those frustrated with, saying that "nobody is more frustrated by (the glitches) than I am."

But, said Obama, "even with all the problems at, the website is still working for a lot of people, just not as quick or efficient or consistent as we want."

The complexity of the federal marketplace has been its undoing so far, said Timothy Jost, an expert on the health reform law and a professor at Washington and Lee University School of Law.

"The main culprit is just a very, very complex system that must be established to enroll millions of people in hundreds of different health plans," Jost said. "The fact that 36 states refused to participate I think was completely unexpected. And Congress has not appropriated funds — since the initial appropriation, that I know of — for the federal exchange," he said, referring to the federal marketplace.

Timothy Jost.

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"Instead Congress has held numerous hearings that have tied up key government officials and kept them from getting their job done. So I think Congress is probably more to blame than anybody else."

Jost also laid blame on "the states that have opposed implementation, including Kansas."

“The states' decisions to not run their own exchanges has had a very serious effect,” he said. “States that are running their exchanges are showing a lot of success.”

States including Hawaii, California and Colorado experienced problems in the opening days of their marketplaces, but according to most reports those have now been largely resolved.<a name="continued"></a>

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Switching to a state-based marketplace

Should Kansas change direction and decide to run its own insurance marketplace — which for now seems unlikely given the opposition to Obamacare among the state’s Republican leaders — it could have the option of implementing proven software, such as that running Colorado's marketplace.

Schneider said he is in talks with several other states about using the system Colorado built, but Kansas isn't among them.

National Conference of State Legislatures

A map showing which states are part of the federal marketplace (dark and light blue) and which are running their own marketplaces (green). Utah is running its own marketplace for small business, but sending individual residents to the federal marketplace.

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A couple of states, Idaho and New Mexico, are betwixt and between systems. They launched Oct. 1 using the federal marketplace framework, but signaled early on that they intend to have their own state-run systems operating by Oct. 1, 2014.

But Schneider said he’s also heard from some states that earlier opted against a state-run marketplace.

"They're a little bit sensitive right now because they're trying to line up political support, so I really can't disclose one now,” he said. "Most of them are looking at having state-based marketplaces for the 2016 plan year, so that would be going live by Oct. 2015.

"It was always envisioned that the first states that built these marketplaces would make their technology and their know-how available to other states, so they could bring up a state-based marketplace with less cost, less risk and in a shorter timeframe," Schneider said.

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