Filed Under:Health Insurance, Individual Health

Health exchange bidding comes alive

Project managers see that 2014 is getting closer. (AP Photo/Jacquelyn Martin)
Project managers see that 2014 is getting closer. (AP Photo/Jacquelyn Martin)

Deltek, a company that offers support services for vendors that are trying to win government contracts, is already tracking about 140 state and federal opportunities linked to the new health insurance exchange system.

More than 40 states have put a request for proposal (RFP) or other bid solicitation document for Patient Protection and Affordable Care Act (PPACA) exchange contracts, and some states -- including states not known for the love of PPACA -- already have awarded exchange-related contracts.

In July, for example, Deltek found that most states had prepared or were preparing RFPs for the eligibility system upgrades that states will need to connect state-administered health insurance programs, such as Medicaid, to the PPACA exchange system.

At least six states -- Colorado, Idaho, Kansas, New Mexico, Nevada and South Carolina -- already had awarded eligibility system implementation contracts.

Activity has been heating up since June, when the Supreme Court let a key PPACA provision -- a provision that is set to impose a tax on individuals who fail to buy a minimum level of health coverage -- stand, and activity came to a boil after the November elections, when voters returned Barack Obama to the White House and increased the number of Democrats in the Senate.

PPACA calls for the exchanges -- Web-based health insurance supermarkets -- to be ready to sell high-quality, standardized coverage to individuals and small groups by Oct. 1, 2013. The exchange plans are supposed to start taking effect Jan. 1, 2014.

In addition to helping users find commercial coverage, the exchanges are supposed to be equipped to help individuals who are eligible for government health programs, such as Medicaid, to enroll in those programs.

Amanda White, a Deltek state exchange RFP analyst, said in an interview that states and their top-level exchange contractors are looking for planners, quality assurance testers and marketing help as well as exchange construction managers.

California, for example, has issued a $90 million exchange marketing RFP, White said.

"There are so many different components to the health exchange system," she said.

Before the elections, whether PPACA would take effect as written, and what states would really need to do, seemed unclear, and many states were flip-flopping, White said.

Now that the elections have passed, "a lot of states are picking up the pace," White said. "They really don't have room to flip-flop any more."  

So far, White said, vendor interest in the "HIX" bidding opportunities seems to be strong, with the crowd of bidders ranging from one-desk consultancies to multinationals.

The typical contract she sees seems to have a 3-year base period with options for the bid issuer to renew the contracts for one or more 1-year extension periods.

White has not yet noticed any protests of bidding decisions already made.

Some states, such as California, Colorado and Oregon, have run bidding processes that have struck White as being highly transparent.

"They that people are interested," she said.

The arm of the U.S. Department of Health and Human Services (HHS) overseeing major HHS PPACA implementation activities, the Center for Consumer Information and Insurance Oversight (CCIIO), has also been helpful and transparent, but somewhat hampered by the need to develop enormous programs quickly, White said.

White said another major wave of bidding may occur in 2017, when PPACA is supposed to give states a chance to apply for waivers that the states can use to tailor exchange programs to fit local needs.

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