Susan Sypolt of Blacksburg knows more than most about the bureaucratic world of health insurance. She retired early from her career as a radiologist and has used the federal insurance marketplace since January 2020 to shop for and enroll in health insurance. But this year she’s navigating the state’s very own Virginia Insurance Marketplace.
This year marks the first year of the state-based marketplace, and those leading the new program say that, compared to other states, the rollout has gone smoothly. So far, more people have enrolled for insurance through the state marketplace than last year, when the only enrollment option was through the federal marketplace.
For Sypolt, however, the process has not been as straightforward, and she’s worried that others who are less savvy may not realize what’s changed in their plans.
The insurance marketplace, or exchange, is a feature of the Affordable Care Act passed by Congress in 2010. The tool allows people to compare and enroll in health insurance outside of the plans offered through employers. It also gives people access to health insurance when they’re not eligible for Medicare or Medicaid, like Sypolt.
In the early years of the ACA, it was anticipated that most states would build their own marketplace options and have the federal marketplace to fall back on if needed. The transition, however, was marked by political pressure in some states to resist the law. In others that did start their own operations, massive technological failures followed, according to the Center on Budget Policies and Priorities, a nonpartisan think tank that conducts research on a number of government policies and programs.
Now, 13 years later, only 18 states operate their own exchange. The rest rely on the federal marketplace, Healthcare.gov, to provide affordable health insurance options for their residents.
Three years ago, the Virginia General Assembly passed legislation to create a website that would facilitate the state’s own marketplace.
Making the transition is a huge undertaking, and leaders working on the Virginia marketplace wanted to set an appropriate timeline for the rollout, taking stock of the lessons learned from other states, said Holly Mortlock, deputy director of the health benefits exchange division, an entity created specifically for the development of the state’s marketplace.
To make the transition, the Virginia legislature first created a new division within the State Corporation Commission called the Virginia Health Benefit Exchange. Over the last couple of years, this new division hired staff and procured vendors to run the exchange, and then this fall got approval from the federal Centers for Medicare and Medicaid Services to switch from using the federal website to the new site for 2024.
For state-run marketplaces, the new tool must be able to share information with Medicaid and other federal programs and must transfer data from the federal system to the new state-run system.
When Sypolt started to make her insurance selections for 2024, she found that her information had successfully transferred over to the state system, but she had been automatically enrolled in a plan with Optima Health that was not accepted by her primary care provider. By the time she realized this, Sypolt had already paid the $750 premium for December.
As a breast cancer survivor, Sypolt carefully selects her doctors, looking for someone who will make informed referrals to specialists and talk to her about what to expect when she sees them.
“That’s important. And a lot of primary care providers aren’t taking new patients,” Sypolt said, including her own doctor.
After many hours of research and calls to the local customer service line, insurance companies and her doctor’s office, Sypolt found out that she might not know which insurance plans will be accepted by her doctors until the new year rolls over. Anyone who decides to wait for the new year will likely go a whole month without health insurance.
In order to have health insurance on Jan. 1, consumers needed to make their selections by Dec. 15. Open enrollment will continue into January, but coverage won’t begin until Feb. 1.
“I could have a car crash on New Year’s Day,” Sypolt said. “What am I supposed to do?”
She decided to switch to a plan with Anthem, which carried another charge of $820, but still she’s unsure if her regular doctor will be covered by the new insurer.
Deepak Madala, director of Enroll Virginia, a community-based program that provides education on health coverage in the state, recommends that people review the provider networks on the health plan websites instead of the Virginia Insurance Marketplace, and then contact their preferred medical providers to confirm that they are participating with a carrier.
There is a known problem with the provider search tool on the state website that is causing providers to be flagged as out-of-network, according to a letter sent to Sypolt from Optima Health.
When asked what obstacles people were running into during enrolling, Madala said only that the rollout of the state marketplace has coincided with the Medicaid unwinding, the nationwide reprocessing of all Medicaid recipients after the COVID-19 public health emergency, making the process confusing for consumers.
Benefits of state-run exchanges
In 2020, the federal government slashed funding for outreach and customer assistance grants that funded call centers and shortened the open enrollment period. Since then, more states have opted for locally run insurance exchanges.
State-based exchanges offer more flexibility, like extended annual open enrollment periods and simplified special enrollment periods for those experiencing qualifying events.
“There were a lot of one-size-fits-all solutions through the federal exchange,” said Madala.
The federal insurance exchange also handles customer support requests from the 32 states that rely on its marketplace, making it difficult to get questions answered, Madala said. Now, there is staff in Virginia who manage all customer support calls.
Operating through the federal exchange also came with additional fees for insurance carriers. With a state-based exchange, local insurance companies can avoid these fees, resulting in lower insurance premiums in the future.
So far, 390,000 Virginians have enrolled for health insurance through the marketplace, accounting for a 12% increase from last year, said Mortlock of the health benefits exchange division. Over 90% of individuals who enrolled qualify for financial assistance through the federal government.
Eventually, when open enrollment comes to a close, Mortlock will have data on where Virginians are buying health insurance and be able to identify pockets where there is underutilization of the exchange.
“Having our own data is very exciting. We’ll be able to better support the consumer population,” Mortlock said.
Virginians can enroll in health insurance through the state’s website at https://www.marketplace.virginia.gov/. For customer support call 888-687-1502.