A number of states will partner with the federal government to get their health insurance exchanges up and running, at least initially, because they were unable – for political or timing reasons – to get authority or plans ready by an imminent deadline.
States must send their blueprints for putting health insurance exchanges in place to the Department of Health and Human Services by Nov. 16.
“We have 14 governors who have sent in letters to the secretary that they are planning to establish an exchange in their state, and we’re actively working with those states and others to complete the requirements to be approved to be a state-based exchange,” said Amanda Cowley, director of state health exchanges in HHS’ Center for Consumer Information and Insurance Oversight (CCIIO). HHS will announce the exchanges in early January.
To make sure that states have adequate financing to build their exchanges, HHS has provided 34 states and the District of Columbia with significant exchange establishment grants. Seven of the financing grants are multi-year and aim to cover the full cost of the exchange construction and implementation. Those went to Rhode Island, Washington, Connecticut, Maryland, Nevada, Vermont and D.C.
Exchanges will take one of three forms: state-based, state/federal partnership around claims management or consumer assistance or both, and federally facilitated, Cowley said.
"State-based exchanges, we believe, are the best models for states because of the flexibility they are given under the law,” she said at an Oct. 5 conference sponsored by America’s Health Insurance Plans (AHIP).
Under the Patient Protection and Affordable Care Act, coverage will be available through the exchanges in all 50 states on Jan. 1, 2014.
In a state-based exchange, states operate and have oversight over all exchange activities and functions, including certifying health plans, developing and launching consumer outreach campaigns, determining eligibility, establishing enrollment for insurance portability programs, coordination with other insurance affordability programs, as well as tax subsidies and building and owning their IT platform.
“We recognize that most states will ultimately want to operate their own state-based exchange but some states will need more time to build the necessary infrastructure to run their own,” said Cowley.
In the interim, they may choose to work as a state partner with HHS. In a claims management partnership, the state is responsible for all decision around health plans and issuers on its exchange, including selection and certification of qualified health plans, recertification and de-certification of health plans, data collection and transmission and issue oversight management.
In the consumer assistance partnership, the state partner takes the lead in assuring the availability of in-person assistance to individuals, including support for individuals filling out and submitting applications, comparing and selecting qualified health plans and enrolling in coverage.
“We know that states are skilled at performing activities like these. It’s the bread and butter of many of their government agencies do today,” said Cowley.
The state/federal partnership enables states “to continue to perform some of what we consider their most important roles and to help assure a more tailored and high quality experience for consumers in the state, even though those states perhaps aren’t quite ready for state-based exchanges,” she added.
Arkansas is one of the states planning for a state partnership exchange. Arkansas has many individuals earning low per capita income, adults with chronic diseases, and a large and growing percentage of uninsured individuals, said Cynthia Crone, exchange partnership director, for the Arkansas health benefit exchange.
“We have a real problem that the exchange helps us to move towards solving,” she said.
But it hasn’t been easy.
Republicans in the state legislature held up the budget and authority to begin planning for an exchange, and the Democratic governor did not want to do an end run around the legislature with an executive order. Ultimately, a budget passed, but time was limited. HHS recently awarded Arkansas with a planning grant to move toward the partnership model, Crone said.
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Arkansas consumer assistance will work closely with the federal navigator program to assure a seamless experience and little confusion for consumers. The state will contract for in person assisters to move people toward enrollment and will have a strong role for brokers and agents.
The state anticipates getting policy decisions and processes defined by the end of the year, place requests for proposals for consumer assisters in early 2013 with awards in May and starting to educate consumers in the summer about enrollment, which will start in October 2013, she said.
While Arkansas selected its essential health benefits benchmark and set timelines for qualified health plans certification, the federal government will perform more of the administration and plan management activities.
A small number of states may choose not to operate a state-based exchange or a partnership, Cowley said. In these states, HHS will establish and operate a federally facilitated exchange.
The Centers for Medicare & Medicaid Services is developing the infrastructure, and it will be able to perform all of the major functions of an exchange – claims management, eligibility and enrollment activities, consumer assistance, premium tax credit calculation and financial management, such as payments to issuers, she said.