Are politics extinguishing state health insurance exchanges?

By Mary Mosquera
11:14 AM

While President Barack Obama and the all-but-official Republican contender Mitt Romney gear up to debate how each would fashion future healthcare, the battle over a critical underpinning of the law is being fought not in the nation’s capital, but in the states.

That would be individual state’s health insurance exchange (HIX). This contentious segment of the Patient Protection and Affordable Care Act (ACA) is caught in a firestorm of political crosscurrents. Some states, such as Wisconsin, actually started work to ultimately stand up an HIX – only to abandon that effort and return the federal funding. Maryland and others are moving forward. And others still are trying, in the Governor’s mansion, but meeting formidable resistance in the legislature.

What with Republican presidential hopeful Mitt Romney frequently reasserting his plans that day one in office, if elected, would entail signing an Executive Order to grant all 50 states waivers that essentially serve as get-out-of-health-insurance-exchange-free cards, the future of HIX appears troubled.

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And if President Obama is reelected? Well, as the federal overreach part of the Republican’s argument against the ACA, and something that states have the right to decline funding for, HIX might not fare much better under a Democrat than a Republican.

Health insurance exchanges, meanwhile, are the prime example of how partisan politics can effectively inhibit health reform and the information technology underpinning it – something that started almost immediately after President Obama signed PPACA in March 2010.

Yet the success of health reform is dependent on health insurance exchanges.

Tracing it back to the mid-terms
While the road to this year’s presidential election grabs the headlines, it is the effect of the 2010 mid-term elections for state legislatures and governors that has shaped how states are driving forward or sliding behind in applying the health reform law, most notably the establishment of health insurance exchanges.

The dizzying swing to the right in 2010 led some states to balk at an insurance exchange, like Kansas, while some set work aside until the Supreme Court rules in June on the constitutionality of the Patient Protection and Affordable Care Act, such as Iowa and Wisconsin – an approach will leave little time to accomplish what is needed to be operational by 2014.

Other states have plowed ahead. Arizona, Maryland and California, among those, are taking on the policy, political, and economic work to establish their exchanges.

The project is “not for sissies,” said California Health Benefits Exchange Board member, Kimberly Belshe, adding that tasks tend to be even more enormous in practice than on paper. “The implementation of health insurance exchanges and other parts of federal health reform is an undertaking that is not for the faint of heart,” said Belshe, who is also senior policy advisor at the Public Policy Institute of California, at a recent conference roundtable with other state exchange officials. She was also secretary of the state’s Health and Human Services Agency under former Gov. Arnold Schwarzenegger.

California and Maryland have each received about $40 million in federal grants to plan, establish and innovate IT systems to get their exchanges off the ground.

States like California and Maryland have assembled stakeholders representing providers, payers, consumers, vendors and public policy groups to outline what an exchange should do and develop the rules of the road, sought legislative approval where needed and collaborated with Medicaid and other state health agencies on eligibility and enrollment systems.

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Iowa and Kansas joined the Florida-led lawsuit challenging the constitutionality of the PPACA when newly-elected Republican governors took office in January 2011.

Mired in legislation
Kansas dug in its heels around all things health reform, according to Robert St. Peter, MD, president and CEO of the Kansas Health Institute, an independent researcher for state policymakers (pictured at right).

Kansas Gov. Sam Brownback returned to the government $31 million for an early innovator grant to work on insurance exchanges. The legislature passed a bill opposing the requirement of any Kansan to purchase insurance or be in the state healthcare system. And Kansas did not apply for pockets of grant money available through the Affordable Care Act, such as community transformation grants, St. Peter said.