The Best and Worst Health Insurance Exchanges

About half of US states set up ‘exchanges’ to help their citizens obtain health insurance in the wake of the Affordable Care Act’s passage. Here are the best and worst ones.

Doctor Folded Hands

Do you need health insurance and live in California, Connecticut, or New York? Congratulations. The health “exchanges” your state set up following the Affordable Care Act’s passage are among the best in the US.

If you need health insurance and you live in Hawaii, Oregon, Maryland, or Massachusetts, on the other hand, please accept our condolences. The exchanges—sometimes called marketplaces—your state established in early 2014 have been anything but successful.

What exactly does it mean, though, when you call these health exchanges or marketplaces good or bad, successes or failures?

Also, if you consider one of the “bad” states home, shop around. (Actually, shop around even if you live in a so-called good state. Health insurance options can and do change a lot from year to year.) Shopping around--by talking to multiple insurance providers—lets you compare quotes, get the best rates, and save money on health coverage.

State Exchanges That Have Done Well So Far

Both the public and the press have had a lot to say about the states that have struggled with their insurance exchanges.

Although that makes sense, not every state that set up its own exchange has fumbled its implementation.

In fact, here are three states that’ve had positive experiences with their health exchanges so far.

California

The Golden State is a shining example of what’s possible when it comes to state-based health insurance exchanges.

That’s easiest to see when you look at the numbers associated with it. One example: more than two million people have used this exchange, called Covered California, since it opened its doors in 2014.

How many of those Californians are still enrolled in plans they bought through the exchange? Just over 1.3 million—which officials say is beyond their expectations.

Another figure that points to how well Covered California is doing: the state’s uninsured rate dropped to 12.4 percent after the exchange’s 2014 launch. (That rate was 17.2 percent in 2013.)

Finally, there’s the recent Field Poll that found 68 percent of registered California voters believe their state’s health exchange implementation has been successful.

Connecticut

A good indicator that Connecticut’s health exchange, Access Health CT, is doing well is other states are using the technology behind it.

In fact, Maryland replaced the faulty system at the heart of its exchange with a system from the IT firm that implemented Connecticut’s exchange. Vermont may follow in that state’s footsteps thanks to issues it has had with its exchange.

Like California, a few statistics also showcase the success Access Health CT has seen since it launched in late 2013. For example:

  • Connecticut’s uninsured rate has dropped by 50 percent since 2012, according to the Kaiser Family Foundation and Access Health CT. In 2012, the state’s uninsured rate was 7.9 percent, while more recent information says it’s now 4.0 percent.
  • Before Access Health CT launched, the number of uninsured people in the state was 286,000. As of late last year, the number was 147,166.

On a related note, CEO Jim Wadleigh shares that from Access Health CT’s second to third year, “we saw roughly a 25 percent increase. And in year three we are seeing roughly a 15 percent increase.”

A possible reason for that success: customers who “actively shop for plans are seeing a 4 to 6 percent decrease in premiums this year,” Wadleigh says. “Customers who are staying with their current plan are seeing a 2 to 4 percent increase, on average. These are some of the lowest increases in the country.”

New York

New York made headlines in early 2014 because it was bucking the trend of troubled state health exchanges. Specifically, it garnered a lot of media attention for making positive progress toward its goal of getting 1.1 million citizens to buy health insurance through its exchange by the end of 2016.

The Empire State blew by that goal during its second open enrollment period. More than 2.1 million people used the health exchange, NY State of Health, to obtain coverage in that time. That number represents over 10 percent of New York’s population. It’s also a two-fold increase over the state’s first open enrollment.

Some other stats NY State of Health is touting in the lead up to its third open enrollment period:

  • Eighty-nine percent of New Yorkers who used the health exchange during last year’s open enrollment were uninsured beforehand.
  • Nearly 75 percent of people who enrolled in one of its plans received financial assistance for 2015. The average price of those credits: $220 per month. 

State Exchanges That Haven’t Done So Well

Sadly, finding exchange horror stories is easier than finding success stories. Here are six of the scariest.

(If you live in a state that’s having problems with its health exchange, look elsewhere. Contact a number of insurance companies and compare quotes. It will help you get the best rate for the coverage you need.)

Hawaii

Unlike New York, Hawaii didn’t get off on the right foot with its health exchange.

A case in point: it wasn’t up and running on Oct. 1, 2013, like was supposed to be. When did it finally open? Two weeks after that date.

Also, only 9,800 people bought coverage through the Hawaii Health Connector during that first open enrollment period. That’s an especially bad result when you consider the federal government gave the state over $200 million in grants to set up its system.

All of which helps explain why state and exchange officials announced earlier this year that they’d switch to the federal healthcare.gov platform for 2016 open enrollment.

Oregon

Oregon’s experience with its exchange hasn’t been much different than Hawaii’s. Like the Hawaii Health Connector, Cover Oregon didn’t launch as planned as planned in late 2013.

Also, the delay created a lot of friction between the state and the company hired to develop its exchange.

One important way Oregon’s situation differs from Hawaii’s: it took its vendor to court. (Actually, that company, Oracle, started by suing the state in August 2014. Oregon responded with two lawsuits of its own, while Oracle filed a second suit in February 2015.)

Thanks in large part to that drama, state officials decided in March 2015 to stick a fork in their struggling health exchange and transfer to the federal system.

Maryland

The good news: about 33,000 Maryland residents bought health insurance through that state’s exchange during its first open enrollment period.

The bad news: they did so even though the Maryland Health Connection site crashed on opening day. They also had to deal with a bunch of other problems—including lost applications and a help-line number that sent callers to a Seattle pottery business--in the weeks and months after the launch. 

Because of those issues, the state tore up their contract with the vendor it hired to create the system. It then brought in another company to rebuild it from scratch.

Massachusetts

Massachusetts reportedly spent $500 million or more over the last few years to get its exchange in order. What did the state and its citizens get for all of that money? Not a whole lot, it seems.

Consider all the issues Massachusetts Health Connector and its customers have dealt with since this exchange went live in late 2013:  

  • As with too many health exchanges discussed here, Massachusetts’ crashed right out of the gate.
  • The chaos that followed forced the state to temporarily enroll hundreds of thousands of residents in Medicaid (so they wouldn’t lose health coverage).
  • Although officials overhauled and relaunched the site last November, consumers continue to experience technical glitches and other issues.

Making matters worse: in early May federal authorities subpoenaed records related to the exchange dating back to 2010.

Nevada

Nevada may not be the worst performer of all the states included in this article, but it’s up there. After all, a 2014 Deloitte report pointed out more than 1,500 defects with this state’s exchange, known as Nevada Health Link. Five hundred of those defects were called “high severity.”

Because of those issues and more, enrollment numbers for Nevada’s first sign-up period were just a third of the state’s target.  

Also, shortly after that state officials voted to use the federal platform’s eligibility and enrollment functions for 2015 and beyond. Unlike Hawaii and Oregon, though, Nevada will retain its status as a state-controlled health exchange.

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