CMS Clears One More Hurdle toward Federal Insurance Marketplaces

Published: August 28, 2013

HHSHealth CareHealth IT

CMS has reached agreements with other federal agencies for accessing information to determine health insurance applicants’ eligibility under the Affordable Care Act, a key requirement in the development of federal insurance marketplaces.

CMS is creating a data services hub which will route information between federal agencies, and state and federal insurance marketplaces, formerly known as health insurance exchanges.  Information such as citizenship, military service, and income will be made available by SSA, IRS, DOD, VA, and DHS.  The data hub will provide near real-time data verification services.

The agencies involved and CMS must still finalize interconnection security agreements before September 3rd, which insure that the agencies supplying information observe CMS security standards.  CMS is generating criticism from some, due to their tight timetable for the data services hub.  Final security authorization is not expected until the day before the system launch on October 1st, although internal and external testing for the data hub began in October of last year.

Most states are relying on CMS for Federally Facilitated Exchanges (FFEs) rather than operating a state-based exchange for 2014, according to a July GAO study.  Thirty four states will not operate a state-based health insurance exchange, but of those, 15 will be allowed to carry out certain FFE functions.  Seventeen states will run their own exchange.         

According to GAO, CMS data indicated $394m in contract expenditures from FY2010 through March 31, 2013 to complete activities to establish the FFEs and the data hub and carry out certain other exchange-related activities.

Ten contractors accounted for 77% of the obligations for activities to support establishment of FFEs and the data hub and to carry out certain other exchange-related activities. Specifically, their contracts were for projects related to information technology, the website, call center, and technical assistance for the FFEs.