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.