Government and industry experts say recent guidance from the federal government will hasten development of state purchasing exchanges, which will in turn affect employers’ long-range benefit sponsorship decisions.
Experts say that over the next 18 months, states will be learning more about expectations, potential models and necessary partnerships. The 230-page, July 11 issuance from Health and Human Services Department was examined at a Washington, D.C. program sponsored by the Bipartisan Policy Center and Kaiser Family Foundation.
To date, the government has distributed $326 million to states seeking to establish health insurance exchanges outlined by the Patient Protection and Affordable Care Act. However, only 14 states have passed laws enabling legislation. Many expect a flurry of activity in the next session of state legislatures, beginning in January 2012, while others will proceed via Executive Order.
Efforts will depend on the fragile economic recovery affecting state revenues. Ray Scheppach, a University of Virginia professor and chair of the BPC Health Project Insurance Market Reforms Initiative, says there are likely to be ongoing tensions between state and federal governments about exchange implementation rules. However, he reports substantial state support for exchanges, which he believes will live up to their roles as “laboratories of democracy.”
Others believe exchanges can help educate consumers on health plan choices and costs, leading toward smart purchasing choices. That’s also important for employers, who will begin making “play or pay” benefit sponsorship decisions.
The goal of exchanges, to create a more organized and competitive insurance market, would offer a choice of health plans, establish common rules for offering and pricing insurance and help consumers understand their options. States electing to be involved are required to demonstrate a viable exchange program by Jan. 1, 2013, and be operational with an exchange by Jan. 1, 2014. The exchanges will be open to employers with up to 100 employees in 2014. States will allow employers with more than 100 employees to purchase coverage for workers through an exchange, at which point pay-or-play decisions will have even more variables in 2017.
Thus far it appears that exchanges will fall into one of four categories:
1. Information aggregator: Delivers bare-bones capabilities to meet legislative requirements. Enrollment transactions are passed on to health plans’ web sites.
2. Retail-orientation: Creates a retail shopping experience with robust service capabilities. Offers a broad range of products varying by price, design and consumer assistance capabilities.
3. Guided exchange: Limits carriers through competitive selection process. Products may be standardized. Potential interim model for states short on funding.
4. Market curator: Robust end-to-end consumer experience from shopping to enrolling. Limits carriers through competitive selection process. Extensive customer service.
Through the latest HHS guidance, federal officials have demonstrated flexibility and willingness to “meet states where they are” in 2013, according to Steve Larsen, director of the Center for Medicare and Medicaid Services’ Center for Consumer Information and Oversight.
As these developments unfold, many officials remain optimistic about the prospects for implementation.
Among them, former Ohio Governor Ted Strickland, state co-chair of the BPC Health Project, says “the creation of exchanges is an opportunity to foster public-private partnerships that result in better health for all Americans.”
