Affordable Insurance Exchanges: States Are Leading the Way
The Affordable Care Act is predicated on the belief that States understand their health insurance markets best and that States should take the lead in establishing and operating Affordable Insurance Exchanges.
States are already working to establish Exchanges. Forty-nine States, the District of Columbia and four territories accepted grants to help plan and operate Exchanges. Over half of all States have taken additional action beyond receiving a planning grant such as passing legislation or taking Administrative action to begin building exchanges.
On July 11, the U.S. Department of Health and Human Services issued two notices of proposed rulemaking (NPRM) that propose to build on State infrastructure and expertise while giving States flexibility as they design an Affordable Insurance Exchange that best fits the needs of their residents and is responsive to local market conditions. In drafting these proposals, the Administration examined models of Exchanges, held numerous meetings with stakeholders and consulted closely with State leaders, consumer advocates, employers and insurers. To continue that conversation, HHS is accepting public comment on the proposed rules over the next 75 days to learn from States, consumers, and other stakeholders how the rules can be improved and HHS will modify these proposals based on feedback from the American people. To facilitate that public comment process, HHS will convene a series of regional listening sessions and meetings. Because each State has different needs and goals, this NPRM affords States the flexibility to develop and implement their own Affordable Insurance Exchange. The Exchange proposed rule gives latitude to States in how they establish and operate Exchanges and ensure plan choices for individuals and small businesses. And the proposed rules build on the momentum that States have established as they work to develop their own exchange. For example:
Maryland: Maryland is making substantial progress in Exchange planning and implementation. The State has initiated work on Exchange IT systems, established and appointed a governing board, and is beginning the process of hiring initial Exchange staff.
Georgia: Georgia continues to make progress in core areas of its State Planning grant, conducting extensive background research and collecting stakeholder input. Additionally, in the earlier part of June, the Governor signed an executive order creating the Georgia Health Advisory Committee to study and develop recommendations on establishing an Exchange.
Colorado: The Colorado Health Benefit Exchange will be a nonprofit unincorporated public entity. Colorado has been extremely active in engaging its stakeholders. Colorado held stakeholder sessions with over 950 people, and conducted several radio and print media interviews. The State’s stakeholder engagement process has also informed the State’s approach to its background research and economic analysis.
Partnering with States
Each State’s insurance market is unique, so that States will require different levels of support as they create their Exchange. That’s why the Administration has engaged in an ongoing dialogue with State leaders since the Affordable Care Act was signed into law. From the beginning, the implementation of health reform has been a partnership between States and the Federal government.
In our discussions, States have consistently made a few things clear:
- Don’t take a one size fits all approach. Give States the freedom to design an exchange that works for their residents.
- Don’t reinvent the wheel. Build on existing infrastructure and ideas that work.
- Avoid duplication of effort and costs.
The rules proposed today meet these criteria by putting States in the driver’s seat when it comes to establishing Exchanges. Under the proposed rules:
- Each State can structure its Exchange as a non-profit established by the State, as an independent public agency, or as part of an existing State agency. In addition, a State can choose to operate its Exchange in partnership with other States through a regional Exchange or it can operate subsidiary Exchanges that cover the regions of the entire State. Any combination of these options can be approved as long as the Exchange meets the guidelines laid out in the proposed rule.
- We have identified several key functions that can be shared across State lines and set up a process to build those functions in a way that gives States the choice of working together to share resources and technology. Earlier this year, HHS awarded more than \•00 million to a group of States to get to work on developing information technology prototypes. The grantees offer a diversity that is valuable to all States as they work to set up their Exchanges. The grantees represent different regions of the country, as well as different Exchange governance structures and Information Systems. This diversity ensures that a wide range of IT models are developed, and that every State will benefit from these models.
- To avoid duplication of effort and reduce the administrative burden on the States, HHS will partner with States to make Exchange development and operations more efficient. This includes business functions like eligibility and enrollment systems, financial management, and health plan management. States can choose to develop an Exchange in partnership with the Federal government or develop these systems themselves. This provides States more flexibility to focus their resources on designing the right Exchange for local insurance markets.
Working together, State and Federal officials will make the promise of the Affordable Care Act a reality for millions of Americans.
Posted on: July 11, 2011