Skip to main content
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Blogs
    • AI
    • Deals
    • Layoff Tracker
    • HIMSS 2023
  • Opinion
    • Breaking Bias
    • Commentaries
    • Letters
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - AI and Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Sponsored Video Series - One on One
    • Sponsored Video Series - Checking In with Dan Peres
  • Data & Insights
    • Data & Insights Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Government
July 11, 2011 12:00 AM

Against the clock

As deadlines loom, many states competing against politics, regulations to set up insurance exchanges

Rebecca Vesely
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print
    AP Photo
    Colorado's Hickenlooper is taking a business-friendly approach to HIEs by appointing insurance executives to its nine-member board.

    Reforming the nation's healthcare system may be, as the well-worn saying goes, a marathon and not a sprint. But when it comes to setting up the health insurance exchanges, as mandated by January 2014, states had better pick up the pace, experts say.

    The deadlines are so compressed that many fear states, health plans and providers will be caught flat-footed in just a few years' time when 30 million more people are expected to gain access to health insurance, largely through the exchanges. Politics are playing a leading role with governors, statehouses and sometimes state insurance commissioners at odds about how and whether to proceed with the federal mandate.

    And the success or failure of the exchanges will likely depend on work done in the next 18 months.

    “Time is not our friend,” said Dr. Bruce Goldberg, director of the Oregon Health Authority, which is tasked with setting up that state's exchange. “2013 is upon us.”

    To date, the federal government has spent about $325 million to help states prepare to create these new online marketplaces, where individuals and small businesses—and later, workers at large firms—can purchase health insurance. Many more millions of dollars will be spent toward the effort.

    “Federal regulators have been pretty relentless in reaching out to the states,” said Candy Gallagher, vice president of state policy at America's Health Insurance Plans, at the group's annual conference in San Francisco in mid-June. “They are really doing an incredible amount of outreach. They are committed to this.”

    What do you think?

    Send an electronic letter to the editor

    As soon as this week, HHS is expected to release long-awaited proposed rules on the health insurance exchanges, which will provide guidance to states on how much flexibility they will have in crafting them, including eligibility, enrollment and other issues.

    In the meantime, legislation to start the process of setting up exchanges has been introduced in 34 states, with about a half-dozen states enacting legislation. But more than half of all states have either seen bills die in session or have not taken up the issue at all. Thirty-two statehouses are now in recess, according to the National Conference of State Legislatures.

    “It's going to be tight under any scenario,” said Dhan Shapurji, director at Deloitte, a consulting firm advising states, federal agencies and payers and providers on the exchanges.

    On track in Oregon

    Oregon is one of the few states that appears to be in good shape to meet the deadlines. State lawmakers this spring passed legislation authorizing the creation of an exchange, to be overseen by a nine-member board, and Gov. John Kitzhaber signed the bill into law July 1. Oregon was one of seven states that in February won an Early Innovator grant from HHS to set up the infrastructure needed to run the exchange. The $48 million grant will fund a two-year project to develop the information technology that will support the Oregon exchange and align enrollment and eligibility of various programs such as Medicaid and the Children's Health Insurance Program.

    Still, the timeline is short. Goldberg anticipates the building phase of the exchange must be completed by the end of 2012 to allow for six months of testing and training in 2013 prior to open enrollment, slated to begin in fall 2013.

    California, which won praise for being the first state to enact legislation creating an exchange in September 2010, isn't progressing at breakneck speed. The final member of the five-person oversight board, Dr. Robert Ross, president and CEO of the California Endowment, was appointed in late June. At the end of June, the board approved a $40 million grant proposal that, if approved by HHS, will allow it to begin hiring about 63 staff members plus consultants. Next up, the board plans to hold stakeholder meetings this summer and fall to get input on the exchange's strategic vision, especially around customer service.

    Importantly, the state exchanges must be self-sustaining. Federal funds are only for startup costs. Maintenance and sustainability are up to the states. Most states are planning to pay for this upkeep through a health plan assessment. And the exchanges must allow consumers to seamlessly transition between consumer plans and Medicaid plans based on income and other eligibility.

    Kim Belshe, a member of the California Health Benefit Exchange board and former state Health and Human Services Agency secretary, said at a meeting in Sacramento in late June that the board must prepare carefully to ensure the financial success of the exchange. “The staffing we are building in today, we need to be mindful of in the long term,” she said.

    Only two states—Massachusetts and Utah—have active health insurance exchanges. Massachusetts was able to get its system up and running within a year of then-Gov. Mitt Romney signing legislation approving its creation in 2006 as part of a broad plan to achieve universal coverage for the state's residents.

    “Massachusetts was able to do it quickly,” said Jennifer Tolbert, associate director at the Kaiser Family Foundation, who is tracking state activity. But Tolbert noted that the Bay State started out with a low percentage of uninsured and a robust insurance market and provider networks. States likely won't be able to significantly piggyback on the Massachusetts exchange because they must modify their own existing Medicaid computer and enrollment systems, for instance. “Most agree that if states haven't made significant progress by the end of this year, they will be behind to launch in January 2014,” she said.

    Health plans and providers must also do significant groundwork ahead of 2014, Shapurji of Deloitte said. Health plans must decide whether to participate at all, and if so, what re-tooling current products will require, as well as new service rules that could vary by state. Providers that operate health plans must also decide whether to participate in exchanges, and all providers must gauge how well their network will support the expected surge of new patients.

    “There are considerations for staffing, care protocols and how to service these new users,” Shapurji said.

    Complicating matters further is the vast variation between states in implementation and setup.

    Beyond the statehouse

    Some states are moving forward with their planning absent activity in their statehouses. Kansas, for instance, doesn't expect to take up any exchange legislation until 2012, said Linda Sheppard, director of the accident and health division of the Kansas Insurance Department. But the Kansas department is working internally to prepare. Kansas received a $31.5 million Early Innovator grant from HHS to begin the process of setting up its online marketplace, building on its Medicaid and CHIP infrastructure. Republican Gov. Sam Brownback has been a vocal critic of the healthcare reform law.

    A governor's opposition can bring the exchange process to a grinding halt. Oklahoma has returned about $55 million in HHS grants it applied for under a prior administration.

    But other state leaders who oppose the law recognize that building an exchange may be preferable to having HHS do it for them. Under the Patient Protection and Affordable Care Act, HHS will assess state readiness in January 2013, and the agency will run the exchange if it determines a state is ill-prepared to do so.

    Georgia is backing legal challenges to the Affordable Care Act, but it also is exploring setting up an exchange. Republican Gov. Nathan Deal has established, by executive order, a 25-member advisory panel on the topic, which held its first meeting in June. The panel is made up of business leaders, providers, payers and consumer advocates, and a report is due by Dec. 15, which will be about halfway through the state's legislative session.

    “We need to be prepared to do something that works for Georgia regardless of the (legal) outcome,” said Ron Jackson, assistant commissioner of the Georgia Office of Insurance and Fire Safety Commissioner. “Maybe this is an opportunity to improve the insurance market in Georgia.”

    Business-friendly in Colo.

    In Colorado, Democratic Gov. John Hickenlooper is taking a business-friendly approach. Unlike most other states now setting up oversight panels, including California, Colorado officials have appointed four insurance executives to serve on its nine-member board. Two business owners and an emergency room physician also were appointed to the board.

    “The Colorado exchange is the most business-friendly in the nation,” said Dan Anglin, a lobbyist with the Colorado Association of Commerce and Industry, at the AHIP conference in San Francisco. “The goal is to reduce the costs of insurance for small businesses.”

    How states choose to set up oversight boards will be closely watched, said Tolbert of the Kaiser Family Foundation.

    “If the board plays an active purchasing role, having insurer and purchaser representatives on the board could present a conflict,” she said. “But if the exchange is set up more as a clearinghouse, there is less of a problem.”

    States will be looking carefully at the forthcoming regulations from HHS to see how much flexibility they have in structuring the exchanges, she added.

    More regulations will come later this year. This fall, the Institute of Medicine is expected to release recommendations on minimum essential benefits that health plans must offer to participate in exchanges. HHS will release rules on these essential benefits shortly thereafter.

    “That's one big missing piece in all this,” Tolbert said.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    congress prescription drugs
    PBMs, Big Pharma face off in House hearing
    Biden COVID copy_i_i.jpg
    Biden administration asks employers to help more workers who lose Medicaid
    Most Popular
    1
    CMS tries luring providers to revamped Medicare ACOs
    2
    Oregon joins other states in setting ratios for nurse staffing
    3
    Blue Shield CA taps Amazon, Mark Cuban, CVS for new PBM model
    4
    A health innovation hub grows in Lake Nona Medical City
    5
    Hospital-at-home providers push for Medicaid coverage
    Sponsored Content
    Modern Healthcare Alert: Sign up for this breaking news email to be kept in the loop as urgent healthcare business news unfolds.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Help Center
    • Advertise with Us
    • Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Blogs
      • AI
      • Deals
      • Layoff Tracker
      • HIMSS 2023
    • Opinion
      • Breaking Bias
      • Commentaries
      • Letters
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - AI and Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Sponsored Video Series - One on One
      • Sponsored Video Series - Checking In with Dan Peres
    • Data & Insights
      • Data & Insights Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing