Health Insurance Exchange Deadlines Challenging for States, IT Firms

IT vendors are building cloud-based health insurance marketplaces for the states and a federal data hub to connect with them to support eligibility determination.

As an Oct. 1 deadline approaches for open enrollment in health insurance exchanges (HIXes), mandated under the Affordable Care Act, IT vendors, the federal government and states are rushing to complete the HIXes in time.

The Government Accountability Office (GAO), the watchdog arm for Congress, issued a report June 19 stating that HIXes are behind schedule to meet this deadline. The study was requested by Sen. Orrin Hatch (R-Utah), Rep. Darrell Issa (R-Calif.) and Rep. Fred Upton (R-Mich).

"Whether [the government's] contingency planning will assure the timely and smooth implementation of the exchanges by October 2013 cannot yet be determined," the GAO stated in its report, "Status of CMS Efforts to Establish Federally Facilitated Health Insurance Exchanges."

Under the ACA, or Obamacare, which the Supreme Court upheld June 28, 2012, in a 5-4 decision, states must set up Web-based marketplaces for consumers to purchase health care plans. Coverage for these plans must begin by Jan. 1, 2014.

The HIXes will be similar to travel sites such as Travelocity and Expedia.

Under the ACA, the federal government will step in and implement exchanges for states that decline to build them. The Centers for Medicare and Medicaid Services (CMS), which oversees all the exchanges, will run insurance marketplaces for 34 states, but 15 of these states will manage some functions of the exchanges. Some states are behind schedule to set up these functions, according to the GAO.

CMS is establishing a federal data services hub that will connect various state HIXes to determine consumer eligibility for health plans. The data hub will provide near-real-time access to federal data on eligibility and connect to data from states and state agencies.

"While CMS has met project schedules, several critical tasks, such as final testing with federal and state partners, remain to be completed," according to the GAO report, which collected information from CMS.

"The big challenge everybody agrees on is the creation, functionality, interoperability and connectivity of the data hub," said Patrick Riley, a senior industry analyst for Frost & Sullivan's Connected Health business.

The data hub will collect the eligibility and enrollment databases for the exchanges, which are expected to enroll about 7 million people, Riley told eWEEK. "It's a massive network to be able to have the interoperability and connectivity across the spectrum," he added.

Among the 55 contractors working on the CMS data hub are CGI Federal, Quality Software Services and Booz Allen Hamilton.

CGI Federal is the main architect for the data hub with an $84 million contract to build the computing infrastructure for the government's eligibility database, Riley said. Booz Allen Hamilton will provide technical assistance, and Quality Software Services will offer system testing support.

In addition, Verizon's Terremark business will provide a cloud computing platform, and Acumen will work on the analytics component of the hub.

"There's this huge challenge for IT to be able to create this eligibility and enrollment for all of those [insurance exchanges]," Riley said.