First to act

Calif. ahead of other states on im­ple­men­ta­tion

Modern Healthcare - - The Week In Healthcare - Re­becca Ve­sely

States are be­gin­ning to set up the nec­es­sary in­fra­struc­tures to im­ple­ment pro­vi­sions of the fed­eral health re­form law, and Cal­i­for­nia is first out of the gate. Not only will states carry out many as­pects of the Pa­tient Pro­tec­tion and Af­ford­able Care Act, but also they must re­solve ex­ist­ing state reg­u­la­tions with the fed­eral law.

For most states, this work won’t be­gin un­til Jan­uary, when their leg­is­la­tures re­con­vene. But a num­ber of states that have been in ses­sion this sum­mer are al­ready get­ting started.

Thirty-one states have taken ini­tial steps to im­ple­ment the fed­eral health re­form law, ac­cord­ing to the Na­tional Con­fer­ence of State Leg­is­la­tures (See chart, p. 9).

The ac­tion so far con­sists mostly of con­ven­ing task forces or work groups to ex­am­ine the law in de­tail and pro­pose rec­om­men­da­tions for im­ple­men­ta­tion. States that have formed these groups in­clude Delaware, Iowa, Min­nesota, Mis­sis­sippi and New Mex­ico. Other states have pend­ing pro­pos­als for such task forces.

Cal­i­for­nia has done the most leg­work on im­ple­ment­ing the re­form bill. Repub­li­can Gov. Arnold Sch­warzeneg­ger in April con­vened a task force, chaired by the state Health and Hu­man Ser­vices Agency sec­re­tary.

Last week, the Demo­cratic-con­trolled Cal­i­for­nia Leg­is­la­ture passed two bills that would es­tab­lish a state-run health in­surance ex­change start­ing in 2014. The bills, ap­proved along party lines, would set up an In­ter­net-based ex­change where con­sumers could com­pare par­tic­i­pat­ing in­surance plans and pur­chase cov­er­age. One bill au­tho­rizes the state to op­er­ate the ex­change, over­seen by a state-ap­pointed five-mem­ber board. The other bill out­lines the role of the ex­change and cre­ates a Cal­i­for­nia Health Trust Fund to han­dle fi­nanc­ing. State Repub­li­cans op­posed this struc­ture, say­ing, among other con­cerns, that the state doesn’t have the ca­pac­ity to op­er­ate it.

Some health plans also op­posed the bills. In a writ­ten state­ment, Pa­trick Johnston, pres­i­dent and CEO of the Cal­i­for­nia As­so­ci­a­tion of Health Plans, said that “with con­sid­er­able govern­ment reg­u­la­tion at the fed­eral and state level, it is im­por­tant that the ex­change re­frain from be­com­ing a third reg­u­la­tor.”

An es­ti­mated 4 mil­lion Cal­i­for­ni­ans would be able to pur­chase in­surance through the ex­change start­ing in 2014, ac­cord­ing to Health Ac­cess Cal­i­for­nia, a con­sumer ad­vo­cacy group.

Sch­warzeneg­ger has un­til Sept. 30 to sign the bills and has not in­di­cated whether he will do so.

Un­der the fed­eral health re­form law, state­based ex­changes must be op­er­a­tional by Jan. 1, 2014. States have un­til the end of 2012 to de­cide whether they will par­tic­i­pate. If they do not, the fed­eral govern­ment can step in to pro­vide the ex­changes. Be­gin­ning in 2014, in­di­vid­u­als and small busi­nesses will be able to buy in­surance through these ex­changes, and some will get govern­ment sub­si­dies to do so.

States have a num­ber of fac­tors to con­sider when set­ting up the ex­changes, and there’s no set tem­plate, said Joy Wil­son, health pol­icy di­rec­tor at the Na­tional Con­fer­ence of State Leg­is­la­tures. “Some states don’t have broad­band in ma­jor re­gions, so do­ing a Web-based ex­change may not be suf­fi­cient, for ex­am­ple,” Wil­son said.

States will be look­ing to HHS for guid­ance on ba­sic ben­e­fit pack­ages that must be of­fered by par­tic­i­pat­ing health plans, Wil­son said. They will then have to rec­on­cile these ben­e­fits with their own statutes. For in­stance, some states re­quire in­sur­ers to cover treat­ment for

Wil­son: “I think that’s where we will have a lot of fric­tion.”

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