Health insurance exchanges emerge as red vs. blue
Despite newly relaxed federal deadlines, some largely
GOP-led states have decided to reject the option of operating the coverage
marketplaces themselves.
By Jennifer Lubell, amednews staff. Posted Nov. 26, 2012.
Washington The federal government
gave states more time to decide if they want to pursue their own health
insurance exchanges under the Affordable Care Act, but the leaders of some
states said they already knew which way they were heading.
On Nov. 16, when states originally were to inform the Dept. of Health
and Human Services of their plans, Bruce Greenstein, secretary of the
Louisiana Dept. of Health and Hospitals, made it clear in a letter to HHS
that his state did not want to take on the risks of developing its own
exchange. The ACA authorized exchanges as marketplaces through which
consumers could shop for coverage, and it encouraged states to form their
own. A federal exchange will operate in any state that does not launch
one.
gWith incomplete regulations and unrealistic deadlines, states and the
federal government will struggle to have a health insurance exchange ready
for open enrollment on Oct. 1, 2013, that is not beset with major
complications for the insurance market and the respective residents of the
states,h Greenstein wrote to HHS Secretary Kathleen Sebelius.
HHS extended the deadline for interested states to submit declarations
and blueprints on state-based exchanges to Dec. 14, responding to a
request from the Republican Governors Assn. RGA spokesman Mike Schrimpf
said his organization was pleased the Obama administration had
gacknowledged that governors have not been provided enough informationh
and had signaled a willingness to work with GOP governors on key issues.
But the leaders of more than a dozen states, mostly Republicans, indicated
that they would not pursue a state-based exchange anyway.
In a letter to HHS, Wisconsin Gov. Scott Walker said 90% of residents
in his state already have insurance coverage without the help of an
exchange. Choosing a state option would subject residents to ga federal
mandate lacking long-term guaranteed funding,h he wrote.
The funding issue appeared to be a primary factor supporting the
decisions to reject state-run marketplaces. Georgia Gov. Nathan Deal
demonstrated gfiscal responsibilityh by blocking implementation of a
state-based exchange, Rep. Phil Gingrey, MD, (R, Ga.), said in a
statement.
Ohio Gov. John Kasich said his state will not launch an exchange but
was not prepared to be completely hands-off, either. In a letter to HHS,
Kasich said the state will default to a federally facilitated exchange,
but that Ohio will seek to retain regulatory control over local health
insurance plans operating in the exchange as well as the authority to
determine Medicaid eligibility. His office also cited a cost rationale for
rejecting the state-run option.
The ACA, however, provides substantial grant money to cover state
exchange startup costs, and neither states nor the federal government is
expected to bear the maintenance costs of exchanges, said Caroline
Pearson, a director for consultant Avalere Health LLC. gOnce exchanges are
up and running, both states and the federal government will be
self-sustaining — in most cases relying on premium assessments on
participating plans to support ongoing operating costs.h
These states also are overlooking the advantages state-based exchanges
would provide, said Dan Mendelson, Avalerefs founder and CEO. Forgoing a
state-based or even a partnership exchange with the federal government
means a state will default entirely to federal control. In rejecting a
state-based option, some officials said they would be too limited in what
they could do, but a federal exchange actually may offer less flexibility,
he said.
Running its own program would make it easier for a state to coordinate
with Medicaid, Mendelson said. Many low-income individuals are ggoing to
go back and forth between Medicaid and the exchange. And when a state is
engaged in its exchange, it will be able to ensure continuity with that
population.h
Tim Maglione, senior director of government relations for the Ohio
State Medical Assn., pointed out another possible issue with Kasichfs
stance. Any state-federal disputes on insurance oversight eventually might
require a court intervention, he said.
State exchanges seeking a strategy
Sixteen states and the District of Columbia, largely led by Democrats,
have expressed their intent to pursue their own exchanges, according to
Avalere data at this articlefs deadline.
For those states, next steps arenft just about creating administrative
structures for the marketplaces, said Alan Weil, executive director of the
National Academy for State Health Policy.
States must be efficient in how they regulate the health insurance
market, he said. Developing an exchange involves simplifying and
integrating eligibility systems and expanding the capacity of physicians
and other health care professionals. gWefre pushing a lot more people into
coverage. We expect demand to go up,h he said.
States pursuing their own exchanges include Washington, which submitted
its blueprint a month before the original November deadline, and Maryland,
one of the first recipients of federal money to develop an exchange. In
expanding health insurance access to a projected 730,000 residents using
federal subsidies, Maryland has a goal of lowering uncompensated care
costs in the state while expanding access to primary care physicians and
preventive services, said Tequila Terry. Shefs director for plan and
partner management with the Maryland Health Benefit Exchange.
But some Maryland physicians are wary about proposals that may dissuade
physicians from participating in exchange plans or even practicing in the
state. There have been discussions, for example, that health plans may
want to pay physicians at Medicaid rates, said Gary Pushkin, MD. Hefs an
orthopedic surgeon in Baltimore who sits on the board of trustees of
MedChi, The Maryland State Medical Society. He also participated in the
exchangefs plan management committee. Another discussion involves imposing
a tax on physicians and others to help fund the exchange, he said.
Maryland already has problems attracting doctors because itfs an
expensive place to live and pay rates are low, and these types of
proposals could further scare them away, Dr. Pushkin said. The fact that
the doctor tax is being considered ggives me one more reason to ask why I
should continue practicing,h he said.
Still, the hope is that physicians will be able to work out these
issues with other stakeholders, said Gene Ransom III, MedChifs CEO. gThe
process has been very collaborative, bringing brokers, insurers and
physicians to the table,h he said.
By 2014, gevery state is going to have an exchange,h Mendelson said.
gRight now, what youfre hearing is a lot of grinding of the wheels in
preparation for a significant policy change.h
Copyright 2012 American Medical Association. All
rights reserved.