Electronic Health Records

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4.2M gain insurance under ACA, but IT glitches cost big bucks

By Jennifer Bresnick

At least 4.2 million patients have gained health insurance coverage since the implementation of the Affordable Care Act, but states that experienced severe IT glitches with their health insurance exchanges have seen significant economic losses that average $745 per patient per year, says Amanda Kowalski in a Brookings Institute report on the early impacts of the healthcare reform package.  States that successfully launched their own insurance exchanges have fared much better on a financial basis than those that relied on the federal exchange or those that had problematic roll-outs of the new technology.

While average per-person premiums increased over 24% by the second quarter of 2014, the number of patients insured under private, individual plans jumped to at least 13.2 million, including the 4.2 million who would not have otherwise been insured, writes Kowalski, a non-resident fellow of the Brookings Institute in Economics and a faculty member at Yale University.  The marked increase in premiums stands in stark contrast to data from Massachusetts, an early pioneer of universal coverage, which saw a significant decrease in prices after implementation in 2006.

The biggest financial losses came in “direct enforcement” states that declined to set up their own insurance exchanges, instead ceding power to the federal exchange.  The difficult launch of Healthcare.gov may have contributed to the $245 per participant average losses experienced by Alabama, Missouri, Oklahoma, Texas and Wyoming.

In a lesson that will be very familiar to EHR adopters, states that experienced severe technical problems were among the biggest financial losers of 2014.  Hawaii, Maryland, Minnesota, Nevada, and Oregon are worse off by $750 per participant on an annual basis, while states that had success with their own exchanges have actually gained $420 per person.  Maine saw the greatest gains with $1500 per market participant, while Oregon came in at the bottom of the heap with an $850 annual loss.

“The impact of setting up a state exchange depends meaningfully on how well it functions,” Kowalski writes. “Although impacts within each state are likely to change over the course of 2014 as coverage, costs, and premiums evolve nationally, I expect that the differential impacts that we observe across states will persist through the rest of 2014.”

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