Deltek Analyst Kate Tussey reports.
Hopefully readers of Deltek’s blog have seen our continual postings related to state and local budgets. In the health care and social services market, Deltek Senior Analyst Chris Cotner has provided a series of “good news” graphs that forecast an upward trend of budgets in FY 2013 and onward. Inspired by Cotner’s work, I decided to take a stab at researching Level 1 Establishment Grant application funding in support of state health insurance exchanges (HIXs). For those new to the subject, these mandated exchanges are no simple task. States need to consider not only the IT and business process behind such an undertaking, but also the individual components that branch off of the larger concept, including consumer outreach; assistance; call/help desks; enrollment; eligibility determination; insurance program qualifications; appeals management; and premium and tax credit processing, just to name a few. Never mind the need for integration between Medicaid management information systems (MMISs) and existing eligibility system(s). One can correctly assume the cost to the state would be substantial, which is not-so-great news for states scrambling to make the 2014 deadline.
The state of Illinois estimates needing $92.3 million for the implementation costs of its HIX, which consists of two primary elements: systems development/support and program operations. Systems development/support is expected to take $75M, including $45M for eligibility determination and enrollment, $15.8M for website development, $9.6M for a customer service call center, and $4.1M for a premium billing system. Program operations are estimated to cost $19M. Ohio contracted with KPMG to run numbers and found implementation costs for a compliant HIX to be $63.4M. This is the top-dollar extreme utilizing KPMG’s highest-cost assumptions. If Ohio decided not to implement a state-run exchange, the cost of interfacing with a federal exchange is estimated at $20M. Below is a breakdown of Ohio’s expenses for a state-run HIX:
For the complete blog, go here.