Federal health officials have revealed few details about the design of health insurance exchanges that they will establish in states that fail to create their own insurance marketplaces by 2014, despite the possibility that every state could need a federal exchange—at least initially—while they complete their own.
Feds releasing few details on insurance exchanges
The 2010 federal healthcare overhaul required the creation of federal insurance exchanges in every state that is unable to certify by Jan. 1, 2013, that it will have within a year a functioning state version that meets federal requirements. Federal officials have consistently said they expect a majority of states to certify and launch either their own exchange or a hybrid federal-state version. However, senior administration health officials refused to dismiss the possibility that few or no states may meet the deadlines.
Asked about that prospect last week during a call with reporters, Steve Larsen, director of the Center for Consumer Information and Insurance Oversight at the CMS, said the majority of states are “moving toward” developing their own marketplace. “There are a small number of states that said they want to work with us and in the first instance establish a partnership under the federally facilitated exchange,” said Larsen, whose agency is responsible for developing the federal exchange. “What we hear consistently from states is that they want to have a state-based exchange in their state.”
That desire is widely echoed by political leaders and provider advocates in various states. However, states are now quickly running out of the time they'll need to not only enact authorizing legislation but to make sufficient progress implementing their exchanges.
That means many states may need the federal exchange, Sandy Praeger, chair of the National Association of Insurance Commissioners' Health Insurance and Managed Care Committee, said in an interview.
“There is time to get them up and running in a state that is running full steam ahead now,” said Praeger, who is also the Kansas insurance commissioner. “Not like us, who are dead in the water.”
Even the two states that have functioning insurance exchanges created by earlier state laws—Utah and Massachusetts—will need to change those marketplaces to meet the standards of the federal law. The changes include administrative overhauls and passage of at least one “technical” law in Massachusetts, according to Kaitlyn Kenney, director of policy and research at that state's exchange, called the Health Connector.
State political leaders have been clamoring for details about the design of the federal exchanges, said Martha Salazar, a policy associate at the National Conference of State Legislatures, because those details may inform both their own decision to advance creation of a state exchange, as well as components they include in the exchange.
HHS officials have revealed little about the federal exchange to some state officials and much more to others, according to Salazar and state health officials. Some said HHS has regularly updated them on the few major advances that have occurred in the development of the federal exchange, such as the two contracts issued to major federal consultants since November to develop components of it.
Officials at HHS did not respond to repeated written requests for descriptions of various components of the federal exchanges, and senior HHS officials similarly declined in-person requests for details.
HHS did recently outline its approach to defining the essential health benefits, or basic coverage components that all health plans in either state or federal exchanges will need to include. The guidance indicated those benefits should be based on existing plans in each state. “The essential health benefits bulletin is another suggestion that HHS and CCIIO are looking at a fair amount of flexibility in implementing” the federal exchanges, said Molly Collins Offner, director of policy at the American Hospital Association.
State provider groups expressed a range of knowledge and interest in the mechanics of the federal exchanges.
The hospital association in Maryland, one of 10 states to enact laws creating a state-run exchange, sees little chance its state will need a federal exchange, even temporarily. “We fully anticipate that this will be a state-run function and that we'll certainly have that in place and certified by the end of the year,” said Mike Robbins, senior vice president for financial policy at the Maryland Hospital Association.
Hospitals in Texas see little possibility state leaders would allow a federal exchange there, even though the state is among 14 that have neither approved an exchange nor have active legislation to create one. “It's hard to imagine at the end of the day that we would acquiesce and let it be set up from Washington,” said John Hawkins, senior vice president of federal relations for the Texas Hospital Association. Because the Texas Legislature does not meet again until 2013, hospitals are urging Republican Gov. Rick Perry to use his authority under state law to establish an exchange by executive order.
States whose exchange efforts fall between aggressive and nonexistent appear most focused on federal exchanges.
Neil Eicher, deputy director of government relations and policy at the New Jersey Hospital Association, said more information about the specific components of the federal exchange would help inform the state's efforts to create its own exchange. “We have been getting these pieces of information but we still don't know what the final exchange will look like,” Eicher said.
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