Maryland exchange, model of Obamacare implementation, won't be fixed until December

Since the day the Affordable Care Act passed Congress, the state of Maryland has been among the most eager to implement it, and among the most likely to launch an exchange smoothly. It’s a thoroughly blue state populated by politicians who pride themselves on the state’s hefty and experienced health care bureaucracy.

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Maryland’s Gov. Martin O’Malley, a presidential aspirant happy to charge forth with the Obamacare banner, held a press conference the day after its passage proclaiming the Old Line State’s intention to tow the line. In 2009, as the Obamacare debate raged, he declared Maryland uniquely suited to the task: a state of a “manageable size” and with more “PHDs per capita than any other state in the union.”

“[H]igh technology, IT, is one of our core strengths, one of our ‘economic and talent strengths’ as a state,” O’Malley said.

O’Malley’s certainty was one of the reasons President Obama chose Maryland for a speech in September touting Obamacare exchanges on the eve of their debut:

“Now, this is real simple,” Obama told a crowd at Prince George’s Community College. “It’s a website where you can compare and purchase affordable health insurance plans, side-by-side, the same way you shop for a plane ticket on Kayak, same way you shop for a TV on Amazon. You just go on and you start looking, and here are all the options.”

But a week into its launch, the Maryland exchange had reportedly enrolled only 326 people.

A week later, the number had improved to just a little over 1,000, and O’Malley told reporters it could be six weeks before the exchange website was working smoothly.

“My sense of it is, probably for the next month or so, month and a half, we will be working out glitches in the portal,” he said.

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That timeline should frighten the administration, whose disastrous federal exchange site is arguably more broken than Maryland’s, with much more asked of it.

It’s likely already scaring Dr. Peter Beilenson, whose Evergreen Health Co-Op is a new non-profit health company entirely dependent on the exchanges for enrollees. His concerns about the glitch-ridden system last week take on more significance in the wake of O’Malley’s announcement.

“If this were November 15th, I’d be really, really worried,” Beilenson told a Baltimore radio station. “[But] this being October 9th, I’m not terribly worried at this point, because I’m sure they’ll get this thing up and running better.”

Beilenson’s comment touches on the real timeline for improving exchanges. The deadline for citizens to purchase health insurance to prevent a penalty is mid-February, but applications for those who have managed to sign up are supposed to be processed by Jan.1. The deadline may be much sooner, as Megan McArdle explained, to prevent the “death spiral” that happens when too few young, health people sign up, the preponderance of older sicker people makes premiums spike, and more young, healthy people drop insurance because it’s no longer affordable. “Rinse and repeat and you have effectively destroyed the market for individual insurance policies.”

In the private sector, this system would already have been rolled back, probably less than 48 hours after it was rolled out. The government has more time, but not that much more, because every day they wait adds to the chaos that will occur if they have to pull the plug in December. If the system cannot reliably process 50 percent of its users on Nov. 1 — and I mean from end to end, including sending a valid enrollment file to the insurer — then the administration should ask for a one-year delay of Obamacare’s various regulations, including the individual mandate. Congress, including Republicans, should be ready to give it to them, with no strings attached.

Perhaps Nov. 1 seems too aggressive to you. I chose that date because it’s when Jon Kingsdale, who ran the Massachusetts exchange for its first five years, said we would be “really in deep doo-doo.” Well, let’s say Nov. 15 — the date when almost all the experts I’ve heard say we really need to be running at full speed, to handle the crush of applications sure to come between Thanksgiving and the mid-December deadline for buying insurance that starts in January.

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O’Malley’s estimate puts Maryland’s exchange running well, in a best-case scenario, in mid-November. Using the outside limit of his guess, it’s the beginning of December. Realistically, using a politics-to-English translator, it’s much later than that.

This is the state that prides itself on passing a health reform bill in 1993 when the nation did not. This is the state that’s a perennial leader in the number of health care mandates it places on businesses and consumers, and has the army of health regulatory bodies to match.

Even when the administration delayed important rules to prevent them becoming election fodder, Maryland forged ahead without. Formed by state legislation in early 2011, the Maryland Health Benefit Exchange Board met at least once a month starting in June 2011 to plan the build. The board, ironically, has a thorough and functioning website of its own. A calendar of events lists more than 200 meetings of exchange officials, working, business, and community groups about the exchanges over the last two years.

There was an undercurrent of apprehension at board meetings, but optimistic assessments and sunny PowerPoints papered over the real problems. At a December 2012 town hall meeting, exchange Chief Information Officer Kevin Yang joked that you could identify the IT guys in the room because they were the ones “sweating profusely.”

“We’re still waiting for certain standards to become official which is presenting some challenges …as far as timing,” Yang said, when asked in 2012 about delayed rule-making from the feds affecting their “aggressive” timetable.

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At a spring meeting, board members engaged in a bit of tragicomic foreshadowing, as they discussed disappointing focus-grouping. It showed citizens’ principal doubts about exchanges: They “have had bad experiences with government programs” and had “built up their defenses surrounding health insurance and anything government related,” researcher Colleen Learch of KRC Research informed them. The solution, board members agreed, was a messaging one, not a technical one.

“We have to make sure the messaging breaks down those defenses,” Learch said.

Jonathan Cohn, a health care reporter at The New Republic and an Obamacare supporter, declared in 2011, “none are moving as quickly, or effectively, to follow through on the law as Maryland Governor Martin O’Malley.”

Sarah Kliff, now a health reporter at the Washington Post, noted Maryland’s healthcare exchange progress was so rapid, it had “caught the attention of the Obama administration.”

If there was ever a state that was, in good faith, trying hard to get an exchange operational, Maryland was it.

And, yet, Maryland produced a disaster that may not be fixed in time to prevent the “death spiral.” The minutes of the last exchange board meeting before the launch betray no serious worry about what was about to happen, though there was a closed board meeting in September that may have been more colorful:

Chairman Sharfstein welcomed everyone and commended the continued work of the Maryland Health Benefit Exchange (MHBE)
staff as open enrollment begins on October 1st. Ms. Pearce commented on the MHBE’s continued preparation and testing of the various systems.

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At its Oct. 8 meeting, the board was tallying paper applications (866) and “implementing work-arounds.”

Back in 2009, when O’Malley was touting Maryland as the ideal state to lead ambitious national health reform, he had some words for anyone who doubted the federal government could pull it off:

Just because it’s not easy doesn’t mean that it doesn’t need to get done. And just because it’s difficult doesn’t mean that it won’t get done. It’s amazing what happens if we stick to the goal, if we keep pounding on those beliefs that unite us.

We’re coming off of eight years of a President who was very adept at belittling government and undermining any public confidence in our ability as a people to still get big things done through our government. But we’re turning the corner on that.

Yet when the Bush administration built a federal exchange for Medicare Part D—a bumpy implementation of its own in some ways— it anticipated “20,000 simultaneous users and built capacity for 150,000,” prompting the USA Today editorial board to proclaim, “That’s the difference between competence and incompetence.”

A little more healthy skepticism from Obamacare supporters like O’Malley about what the federal government could “get done” might have helped them actually get it done.

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