Much about the Health Insurance Exchanges is uncertain, even as the October 1 deadline to make them operational approaches. Many states running their own or partnership exchanges have yet to decide on key elements of plan management, consumer outreach, and other important functions. Exchanges are a genuine game changer for the health insurance marketplace and highly complex to implement. The more information we have on state progress, the better. So the Government Accountability Office’s recent report on how exchanges in seven states are coming along is worth a look.
State Decisions Will Have Great Influence on HIX Success:
So far, 17 states plus the District of Columbia have chosen to operate their own Health Insurance Exchanges (HIX). Another seven states will run partnership exchanges together with the Centers for Medicare and Medicaid Services (CMS). The rest will have exchanges run by the federal government.
Though the Affordable Care Act(ACA) sets a baseline of standards, states running their own exchanges will make many important decisions about plan certification, premium rates, benefit and plan value requirements, and provider network adequacy. Even states that run partnership exchanges can choose to have a big role in outreach, consumer education, and plan application processes.
Those decisions will influence a swath of factors that will determine whether the exchanges provide large numbers of consumers with reasonably priced health coverage, as Obamacare intended. A detailed outreach plan, such a this one from Illinois, could encourage the young and healthy to buy insurance on the exchanges, which in turn would help keep premiums stable in the new post-ACA marketplace. And the extent to which states invest in IT infrastructure improvements will help ensure complex behind-the-scenes exchange administrative and data-driven tasks run smoothly.
All Health Insurance Exchanges are supposed to be ready to accept customers on Oct. 1, 2013. So many policy experts, health plans, and businesses are watching to see what steps states are taking to prepare.
GAO Report Takes a Snapshot of Seven HIX States:
A recent report from Government Accountability Office (GAO) is a good resource for exchange-watchers. The thorough staff at the GAO took stock of progress in seven states: the District of Columbia, Iowa, Minnesota, Nevada, New York, Oregon, and Rhode Island. All but Iowa, a partnership-exchange state, are operating their own exchanges. The GAO also tried to interview officials in Florida and Maine, who will have federally facilitated exchanges. But the two states declined to participate.
Here is a quick overview of what the GAO found:
Plan Management:
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All seven states have taken steps toward deciding which Qualified Health Plans would be included in the exchange.
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Two states – Oregon and Rhode Island – have decided that their exchanges will have the authority to actively select which Qualified Health Plans (QHP) may participate in the exchange, sometimes called a direct-purchaser model.
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The remaining five states will allow all QHPs to participate in the exchange. Those states still set standards for qualification but do not select and contract directly with health plans.
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Officials in the six state-based exchanges reported they are considering revenue options for financially sustaining their exchange. For example,three states plan to charge fees to insurance carriers participating in the exchange. However, some states reported challenges with developing these options, given uncertainties related to exchange enrollment, on which the fees are based.
IT Infrastructure:
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All states are in various stages of developing an information technology (IT) infrastructure, including redesigning, upgrading, or replacing their outdated Medicaid and Children’s Health Insurance Program (CHIP) eligibility and enrollment systems.
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Six states are also building the exchange IT infrastructure needed to integrate systems and allow consumers to navigate among health programs.
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Those states identified challenges with the complexity and magnitude of the IT projects, time constraints, and guidance for developing their systems.
Consumer Outreach:
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Six of the seven states included in the GAO review are in various stages of developing a consumer outreach and assistance program to help enroll consumers.
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As a partnership state, Iowa has not yet decided whether and to what extent it will assume responsibility for aspects of this function.
Read a one-page summary of the report here, and the full report here.