HHS offers guidance for insurance exchanges
Soon after a federal judge in Virginia ruled a key provision of the Patient Protection and Affordable Care Act unconstitutional last week, more than 150 officials from 44 states met with HHS representatives to learn more about establishing one of law’s key provisions: health insurance exchanges.
HHS hosted the closed-door, two-day meeting in Washington for recipients of federal planning grants to implement the insurance exchanges that states are required to have in place by 2014. The meeting included breakout sessions for state officials to receive guidance from HHS and also learn from one another, according to Norman Thurston, the health policy and reform initiatives coordinator in Utah Gov. Gary Herbert’s office. Thurston, who attended the meeting, said HHS’ agenda included topics on information technology, stakeholder consultation, governance, legislative action, background research and finances.
In all, 48 states received $1 million each for planning grants. Applications for “building” grants—funds for states ready to establish exchanges now—are due Dec. 22, Thurston said.
While stakeholders were meeting in Washington, the National Association of Insurance Commissioners on Dec. 16 adopted the American Health Benefit Exchange Model Act, a law for states to consider when they introduce legislation to develop their own exchanges.
“Many states will move Medicaid programs onto the exchange in addition to private products,” said Illinois Insurance Director Michael McRaith, who chaired the subcommittee to draft the act, which he said was a collective effort of more than 30 states. “An exchange requires a statewide effort. An exchange is not endeavor that can be taken without legislative involvement and will require the decisions that will be decided by policymakers.”
McRaith said states could learn from one another about which ideas are good and which should be disregarded.
“Allowing flexibility, allowing them to make decisions that are reflective of the state’s insurance market, healthcare economy, provider community, is essential to the health of the exchange,” McRaith said. “ Then as we move forward following implementation, states will learn from one another. We’ll learn what has worked in one state and what hasn’t.”
McRaith also said neither of the two insurance exchanges that have been established—in Utah and in Massachusetts—is “the magic formula or recipe” for any other state because the markets in each state look so different. Rather, states can learn from those existing structures.
And Utah welcomes that kind of learning and dialogue, according to Thurston. He said many representatives at the meeting last week were eager to learn more about what Utah has done since it established its exchange in 2009.
“Our first advice is to call us,” Thurston said. “We have learned a lot. We’ve already learned about what you really need in place for this to work well,” he said, adding that this includes a solid interface for consumers to use; good technology to work with insurance companies on both pricing and application issues; and an effective system to track the status of exchange users. “You really have to think through the daily needs and the relationships involved in executing this new type of program,” Thurston said.
The Utah Health Exchange is overseen by the state and is managed by two employees.
“Our exchange was developed primarily to support the defined contribution market,” said John Nielsen, Herbert’s health reform adviser. “We found the small business community was really suffering. Many small businesses were failing to offer health insurance to employees,” he said. He added that the office wanted to develop an alternative that would allow employers to offer monetary assistance so employees could purchase insurance.
Nielsen said he hopes that as the state moves forward to become fully compliant with federal requirements by 2013, HHS will continue to encourage flexibility among the states.