John E. Dicken(202) 512-7114
dickenj@gao.gov
Office of Public Affairs
(202)
512-4800
youngc1@gao.gov
What GAO Found
For 2014, the Department of Health and Human Services' (HHS) Centers for
Medicare & Medicaid Services (CMS) granted conditional approval to 18 states
to establish state-based Small Business Health Options Programs, or SHOPs, and
to 17 states to operate health insurance exchanges for individuals. CMS is
required to operate a federally facilitated SHOP (FF-SHOP) and a federally
facilitated exchange for individuals (FFE) in the remaining states. Of the 33
states with FF-SHOPs and 34 states with FFEs, 15 states are expected to assist
CMS to carry out certain functions of the exchange. However, the activities that
CMS plans to complete in these 15 exchanges have evolved, and CMS activities in
these and other exchanges may continue to change. For example, CMS approved
state roles in SHOPs and individual exchanges on the condition that they
ultimately complete key activities for exchange establishment. CMS indicated
that it would assume more responsibilities in these exchanges if any state did
not adequately progress towards completion of all required activities.
CMS and states have made progress in establishing SHOPs, although many
activities remain to be completed and some were behind schedule. CMS issued
regulations and guidance necessary to establish SHOPs and took steps to
establish processes and data systems necessary to operate the FF-SHOPs. Many
activities remain to be completed in the core functional areas of eligibility
and enrollment, plan management, and consumer assistance, and while the agency
has established timelines for completion of these activities, some were behind
schedule. For example, funding awards and development of a training curriculum
for a key program that will provide outreach and enrollment assistance to small
employers and employees have been delayed by about 2 months. Regarding states,
CMS data showed that most had completed preliminary activities such as obtaining
the necessary authority to operate an exchange, and many had made progress in
each of the core functional areas. Many key activities remained to be
completed--some scheduled for near the start of enrollment in October 2013--and,
as of May 2013, states were behind schedule in completing some key activities.
In particular, about 44 percent of the key activities CMS initially targeted for
completion by March 31, 2013, were behind schedule, although CMS reported that
it had revised many target dates and other delays were not expected to affect
exchange operations.
Much progress has been made, but much remains to be accomplished by CMS and
states within a relatively short amount of time. CMS's timelines for the
remaining key activities provide a roadmap for completion; however, factors such
as the still-evolving scope of CMS's required activities in each state and the
many activities yet to be completed--some close to the start of
enrollment--could suggest the potential for future challenges. And while missed
interim deadlines may not affect implementation, additional missed deadlines
could do so. CMS said it is working on strategies in each state to address
contingencies. Whether CMS's contingency planning will assure the timely and
smooth implementation of the exchanges by October 2013 cannot yet be determined.
In commenting on a draft of this report, HHS emphasized the progress it has made
in establishing exchanges, and expressed its confidence that exchanges will be
open and functioning in every state by October 1, 2013.
Why GAO Did This Study
The Patient Protection and Affordable Care Act (PPACA) requires
SHOPs--exchanges or marketplaces where small employers can shop for health
coverage for their employees--to be established in all states. PPACA also
requires similar exchanges to be established for individuals. CMS oversees the
establishment of the SHOPs, approving states to operate one or establishing and
operating one itself in states that will not do so. Enrollment is to begin
October 2013, with coverage effective January 2014, although a key requirement
related to employee choice was deferred for 1 year. GAO was asked to examine
federal and state readiness to establish the SHOPs. In this report, GAO
describes (1) the roles of the federal government and states in establishing
SHOPs and (2) the status of actions taken and planned by the federal government
and states in preparing to establish SHOPs.
GAO reviewed CMS regulations and guidance on the roles of CMS and states in
establishing both SHOPs and individual exchanges, as progress establishing the
two exchanges is related. GAO reviewed CMS planning documents used to track the
progress of key activities to be conducted by CMS to establish FF-SHOPs and
FFEs. GAO also reviewed target completion dates for key activities CMS
established for states and obtained updates from CMS on state progress. GAO
interviewed CMS officials and relied largely on documentation from
CMS--including information CMS developed on the basis of its contacts with
states--and did not interview states.
For more information, contact John Dicken at (202) 512-7114 or dickenj@gao.gov.