State sites outperform U.S. marketplace in Affordable Care Act signups

Tom Baker, a Penn law professor, headed the research into insurance exchanges. Pa. and N.J., which opted not to run their own websites, were compared to Conn., which does.
Tom Baker, a Penn law professor, headed the research into insurance exchanges. Pa. and N.J., which opted not to run their own websites, were compared to Conn., which does.
Posted: August 24, 2014

States running their own Affordable Care Act marketplaces enrolled more people in health insurance than those using the federal marketplace, according to an analysis by researchers at the University of Pennsylvania's Leonard Davis Institute.

Given the federal Website's dreadful October launch, that isn't exactly jaw-dropping news. But Penn's Health Insurance Exchange researchers were surprised to find that even after Healthcare.gov began working well in December, state-based marketplaces kept outperforming the federal site.

This is of local interest since both Pennsylvania and New Jersey opted to use the federal exchange and not run their own sites.

So, in the spring, Tom Baker, a Penn law professor and the project's principal investigator, had students visit state sites and the federal exchange to find out why.

The students preferred the new and improved Healthcare.gov website over the state sites. Yet the states were still enrolling more people. What did those sites have that the federal site didn't?

More money, for one thing. "We think that it's not about the operation of the website," says Baker, working under a Robert Wood Johnson Foundation grant. "The states running their own exchanges were cooperating [with the government] in a lot of subtle ways."

It turns out that states that run their own websites had an advantage: $3 billion in block grants just for state sites.

The cash infusion allowed the 16 states and Washington with their own sites to spend more money to enroll people. So why exactly did the state sites get that extra money?

The health law included $67 million in Exchange Establishment block grants. These were earmarked for training and paying the salaries of navigators in the 29 states using the federal site and two other states partnering with Healthcare.gov. A total of 105 groups got one-year grants. Each state received at least $600,000, the Penn team found.

Resources for Human Development, Pennsylvania's largest grantee, won a $900,000 grant.

But Section 1311 (i) (6) of the health law prohibited state-run sites from using that money to pay navigators.

To solve the problem, the Department of Health and Human Services funded a $3 billion program called the In-Person Assistor block grants. The money, dedicated to state-run sites and five states partnering with the federal government, is available only through September 2015. A third funding stream, which was already part of the law, is open only to community health centers. The five partnership states are the only exchanges allowed to dip into all three funding streams.

The job description for assistors and navigators is nearly the same. The big difference is that assistors work only in state marketplaces. So the type of marketplace a state chooses has everything to do with how much money it gets to help people sign up. "In government," Baker says, "people get a sense of which way the wind is blowing."

The Penn analysis shows how well the state-run sites have done. For instance, only 31 percent of the nation's uninsured live in the 16 states running their own sites. Yet those states got half the available government funds, the Penn team found.

Meanwhile, the 29 states using the federal website, which have 63 percent of the nation's uninsured, got only a third of the money from the law. The five partnership states, where 6 percent of the country's uninsured live, got 17 percent of the money.

How much not running their own exchanges has cost Pennsylvania and New Jersey is hard to say. But the researchers compared both states with Connecticut, which has its own exchange.

The populations of New Jersey and Pennsylvania are more than two to three times that of Connecticut. Yet Connecticut received almost $4 million in exchange grant money, while New Jersey collected $5 million and Pennsylvania got $7 million.

With its money, Connecticut enrolled 79,192 people, spending about $50 per person enrolled. New Jersey signed up 161,775 for about $31 per person. Pennsylvania was the most economical, registering 318,077 enrollees at $22 per person.

Connecticut also has an edge with low unemployment, a smaller number of uninsured people (9 percent), and a "Medicaid program that was very generous going in," Baker says.

About 13 percent of New Jersey's population is uninsured. The state expanded Medicaid coverage as part of the health law. More than 1.2 million Pennsylvanians are uninsured. The state did not expand Medicaid, and still awaits word from regulators on a waiver request for its controversial Healthy Pennsylvania plan.

Meanwhile, the state is forgoing $4.8 million a day in federal funding, according to the Pennsylvania Health Access Network, a statewide coalition of groups working for quality health insurance. And about 400,000 Pennsylvanians, who would be covered by expansion, remain uninsured.


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Did you buy insurance under the Affordable Care Act through Healthcare.gov? How is it going? We would like to hear about your personal experiences with the ACA, including the expanded Medicaid program in New Jersey. E-mail us at fieldclinic@philly.com


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This article was written

in partnership with Kaiser Health News, an editorially independent program of the Kaiser Family Foundation.

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