From the U.S. Government Accountability Office, www.gao.gov

Transcript for: State Health Insurance Marketplaces  

Description: Audio Interview by GAO staff with Valerie Melvin, Director,
Information Technology

Related GAO Work: GAO-15-527: State Health Insurance Marketplaces: CMS 
Should Improve Oversight of State Information Technology Projects

Released: September 2015

[ Background Music ]

[ Narrator: ] Welcome to GAO's Watchdog Report, your source for news and
information from the U.S. Government Accountability Office. It's
September 2015. The Affordable Care Act required the establishment of
health insurance exchanges or marketplaces to allow consumers and small
employers to compare and purchase health insurance plans. States could
either create their own marketplaces or have their residents use a
federally facilitated marketplace. All of which require information
technology projects to operate. A team led by Valerie Melvin, a director
in GAO's Information Technology team, recently reviewed federal and
state IT efforts related to health insurance marketplaces. GAO's Jacques
Arsenault sat down with Valerie to talk about what they found.

[ Jacques Arsenault: ] Can you talk a bit about the size and scope of
these health insurance marketplaces?

[ Valerie Melvin: ] Yes. The development of the state health insurance
marketplace is a very large nationwide effort that involves establishing
health insurance marketplaces in all 50 states and the District of
Columbia. These marketplaces are expected to provide a seamless single
point of access for private citizens as well as small employers to be
able to apply for and obtain healthcare coverage. There are particular
functions that these marketplaces have to provide in terms of providing
eligibility and enrollment, plan management, that being the health
insurance plans, managing the finances related to those plans whether it
be calculating the cost of the plans or paying for the premiums, and
consumer assistance which involves making sure that there are services
available to those that are applying for the health insurance plans. To
provide these capabilities, they have to rely on the development of
information technology systems. In some cases, it's actual modifications
to existing systems or it may be developing systems or interfaces to
other federal systems. There are different types of marketplaces that a
particular state can establish. The majority of the states have used the
federally facilitated marketplace or some form of that marketplace. But
there are 14 states that established and are operating their own
marketplaces along with 3 others that have developed their own but are
using some portion of the federal solution to assist them. These states
have access to two sources of federal funding for establishing these
marketplaces. That being federal grants as well as some portion of
Medicaid matching funds that they receive for their Medicaid eligibility
and enrollment systems. With regard to the federal grant funding, states
have reported spending about $1.45 billion on IT projects.

[ Jacques Arsenault: ] So then what did you find  about how well these
marketplaces are working?

[ Valerie Melvin: ] We found that the states have faced challenges in
designing, developing, and establishing the marketplaces as it pertained
to the information technology projects that we needed to support them.
And we found, for example, that the 14 states that had state-based
marketplaces were developing and operating IT systems to support their
marketplaces. However, not all of the functions had been completed as of
February 2015. We found in some cases, for example, that eligibility and
enrollment functions were in place but that in other instances, the
states had not been able to get all of these functions in and were
having to still rely on some manual processes to supplement their
automated functionality.

[ Jacques Arsenault: ] Now, your team also surveyed state officials.
What did they tell you about some of the challenges that they faced?

[ Valerie Melvin: ] The state officials identified a number of
challenges. Some of these were common across the states that were
developing their own IT solutions. We found challenges in five primary
areas. Those areas being project management and oversight, challenges
related to having compressed time frames for being able to develop and
test their systems. We found challenges related to the systems design
and development efforts for the states that were using the federally
facilitated marketplace. That included, again, compressed timeframes as
they were being required to continually define their requirements as
they were changed at the federal level. We also found that there were
concerns and challenges related to the significant rework and critical
functionality that had to be deferred. Thirdly, we found that with
regard to the state-based marketplaces, there were design and
development challenges that were similar to those with the federally
facilitated marketplace states that included interfaces with the
insurers and developing their website eligibility functions. In many
instances that resulted in them having to have work arounds to
circumvent defects in the eligibility and enrollment functionality that
they were developing. We also found challenges related to resource
allocation and distribution as it related to having adequate staffing
and funding. In some instances, staff that had been requested were not
brought on board or they had not been able to put the certified project
management in place that was needed to oversee the initiatives. Then
lastly we also saw some challenges related to such matters as their call
centers not being able to handle the volume of requests that were coming
into it as these problems were permeating across the state efforts.

[ Jacques Arsenault: ] And finally, what would you say is the bottom
line of this report?

[ Valerie Melvin: ] CMS has provided billions of dollars, funds for the
marketplace IT projects. And while the states have largely established
these systems, there's still work to be done. And there's still
challenges within the efforts that they have to undertake. These efforts
and these challenges necessitate that CMS provide an effective oversight
role.

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next episode of GAO's Watchdog Report for more from the congressional
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