Assignment 3: Domestic Factors

Maryland’s experiment in healthcare reform contributed considerably to the states’ and country’s progress. Using data-centric and innovative methods, local leaders managed to make Western Maryland Regional Medical Center a real cornerstone in the democratic governmental transformation of healthcare programs. Nevertheless, Maryland’s reputation in healthcare sector was aggravated as a result of the state’s healthcare exchange crash (LoGiurato, 2014).

Maryland was one of the first states to adopt the health insurance marketplace projected in the Affordable Care Act (ACA). The essence of this innovation was to create a price comparison website for accessible health insurance. More precisely, the new opportunity would allow people, their families, and businesses to investigate a verity of health plans and opt for the ones with minimum premium and out-of-pocket costs.

In 2011, the Maryland Health Benefit Exchange (BHSE) entered into force and passed extra legislation in the following year. Later, it was renamed into Maryland Health Connection and became one of the six state exchanges authorized by the federal government. The health department of Maryland spent almost $125 million on the exchange, but the health insurance website crashed on its first day and was afflicted by contractors and software glitches. Accordingly, when the starting open-enrollment period of the ACA, Maryland was over, it had some of the lowest levels of participation by percentage of inhabitants. Additional negative impacts also included complications as overloaded call centers, disconnected service numbers, queues at the exchange’s offices, public frustration and other (Norris, 2016).

The contributing factors to this problem were mainly a lack of oversight and internal control from the side of Maryland administration. The Department of Health and Human Services conducted a one-year probe and detected no criminal operations or fraud in the occurred incident (Fritze & Cohn, 2015).

Initially, Obamacare together with the insurance exchange innovation were set to make healthcare more accessible to the public. According to the strategy, individuals have to purchase plans or pay fines. At the same time, the insurers will gain higher profits, and this will create sound competition in the healthcare insurance market. In their turn, the government and employers will receive benefits through expenditures cutting (Dooren, 2014). Consequently, as a result of the unsuccessful attempt to properly start insurance marketplace in Maryland, only 11,700 customers purchased private insurance plans, which is considerably less than the goal of 150,000. It led not only to the failure to achieve the government’s target but also the loss of large amounts of state funds. Additionally, the troubles of Maryland’s healthcare exchange could have a lasting impact on the political career of Governor Martin O’Malley, who was mentioned as a potential Democratic contender in 2016 (Cox, 2013).

The best way to minimize the negative impact of the unsuccessfully launched insurance marketplace was to react rapidly and not to abandon the goal but rather change its actors, which was actually done. Maryland Health Connection started over for the second round and bought Connecticut’s exchange technology. Although about $73 million was paid to Noridian Healthcare Solutions on the first round of website construction, after the settlement on the incident, Noridian was to refund $45 million back to the state funds. The sum consisted of $20 million payment plus $5 million annually during the five coming years. To replace the Maryland troubled website with the successfully adapted technology of Connecticut, the board of health-insurance exchange agreed to use the services of Deloitte Consulting. The change required additional costs of nearly $50 million but contributed significantly to the recovery of the online system.

Furthermore, the October 2015 publication of the report issued by Maryland Office of Legislative Audit criticized Health Marketplace. The audit underlined that the exchange paid subsidies much higher than required. In addition, the security system of the site was recognized not strong enough, thus not guaranteeing sufficient protection of enrollees’ personal information. Likewise, the US Office of the Inspector General (OIG) decided that Maryland executives misallocated millions of dollars. The funds came from both the Center for Consumer Information and Insurance Oversight (CCIIO) and Medicaid as the exchange offers plans for private health insurance together with the Medicaid. Thus, the auditors suggested that Maryland pay the $28 million back to the federal funding. Maryland Health Connection was strongly persuasive that no mistakes in calculations existed, and that they adhered to CMS during the whole implementation process.

In this case, the alternative to reduce the cost of the problem connected with the Healthcare domestic issue is apparent. The government of Maryland should continue the implementation of the plan, which is comprehensively beneficial. Though the multi functioning website experienced the serious challenges, almost 0.7 million of the state’s population enrolled in qualified health plans (GHPs) due to Maryland’s health insurance exchange in 2014. By August 2015, the 0.123 million added to the general number of insured Marylanders (Norris, 2016).

Another alternative to suggest would be primarily based on the private health plans outside the market. Since the marketplace cannot suggest all plans in a specific state, people need to shop outside the government site to access every program in the region. Consequently, a need for a provider or broker possessing information on every health plan could be an idea for further development. The company interested in projecting its own online resource for health insurance would perform better as its invested capital and financial interest differ from that of the government. Thus, an extensive online health insurance seller could be another option for the rise of insurance level of population.

According to the report by the Maryland Health Connection, the state’s premium rates are among the lowest in comparison with the 12 other with available data. For instance, a resident enrolled in a silver plan in California has an approved rate of $319 per month, while the same resident in Maryland – approximately $270 per month cost (-18% lower premium cost). In bronze plan proposals, Maryland is the leader with the lowest premium rates (Urban, 2013). The first factor that contributes to the state’s lower premium rates is the aggressive negotiation of rates conducted by the insurance commissioner. As an outcome of the negotiations, the rates were reduced more than twice. The second factor is Maryland’s plan to handle risky consumers in the future. The high-risk pool keeps being open for those who are not willing to change the coverage. The purpose of this implementation is to keep a part of the sick population outside health insurance zone.

It is rather difficult to find the alternative to government intervention since the governmental online service is more beneficial in all aspects for those who do not want to purchase ACA-compliant health insurance for any reasons including financial difficulties, political views or personal beliefs. Health Reform Monitoring Survey by the Urban Institute Health Policy Center reported one-fifth of uninsured respondents being not interested in health insurance and preferring to pay a fine. Temporary health insurance that lasts 30 to 364 days may be an option for people looking for the benefits of a partial insurance (Dorsey, 2014).

To conclude, the healthcare reform conducted by Maryland passed some challenges through the process of implementation. However, the timely reaction and improvement resulted in positive effects on the social and economic situation of the state.