State partnership exchanges running into problems

Some states that will be running their health insurance exchanges with help from the federal government are not receiving necessary information in a timely fashion, which may inhibit their ability to effectively prepare for the launch of their marketplaces, according to a study released Friday from the Urban Institute.

Linda Blumburg and Shanna Rifkin, senior fellow and research assistant, respectively, in the Urban Institute's Health Policy Center, write that based on three states that will have federally facilitated exchanges—Alabama, Michigan and Virginia—“political challenges at the level of the state legislature … continue to create significant barriers to accessing (federal funds for implementation), even when governors' offices are predisposed to doing so.”

The researchers found that whether a state will leave it to the feds entirely to run the exchange, or whether it will do it in partnership with Uncle Sam, makes a difference on preparedness.

“Some partnership states have processes and plans developed to fulfill their roles designated to them under the” federally facilitated exchange, or FFE, the report says, adding that Michigan is a partnership state. “On the other end of the spectrum, some pure FFE exchanges, such as Alabama, seem to be at a standstill, as a result of political or administrative hurdles or a combination of the two, and have no plans to assist (CMS' Center for Consumer Information and Insurance Oversight) in any aspect of FFE administration.”

Virginia, the other state examined in the study, will also operate a pure FFE.

Only 17 states have agreed to run their own exchanges. The other 33 will either do them in partnership with the federal government or defer entirely to the feds, though only six of those will follow the partnership model, according to the National Academy for State Health Policy.

On the positive side, Blumberg and Rifkin found that departments of insurance in the three states “see many of the roles delineated under exchange plan management as a continuation or modification of their traditional regulatory roles and consider them to be one part of their larger role in implementing the array of private market reforms.”

They also found that the biggest challenge for the three states over exchange development has been IT system construction and integration with current programs. The researchers said that staff in Michigan and Virginia told them that they have concerns about how information will be exchanged through the state department of insurance and federal exchanges.

At the AHIP Institute conference in Las Vegas last week, Jon Hager, executive director of Nevada's health insurance exchange, which is state-run, said the state has a long way to go on its testing of IT systems for the online marketplace.