Tag Archive for Exchanges

What’s the Back-Up Plan for Health Insurance Exchanges?

Yet another problem has appeared that could stymie the Affordable Care Act’s successful implementation: what if we need a back-up plan to evaluate and certify the health plans that are going to be sold on the law’s online insurance marketplaces?

As it stands now, there isn’t an official one. On and off the record, officials at the U.S. Department of Health and Human Services (HHS) assured Governing that there was a secondary plan, but they declined to provide details. Industry sources say they aren’t aware of any such back-up plan—which concerns many of them—but there are a few theories out there.

Here’s the issue: Somebody has to review and certify the health insurance plans that will be sold on the online marketplaces, formerly known as exchanges, created by the federal health reform law. In the 18 state-run exchanges, the state is responsible for doing that review and certification. In the 13 states that are partnering, openly or silently, with the federal government on their exchange, the state is also responsible. In the 19 states fully defaulting to a federal-run exchange, HHS will oversee this process, known as plan management.

That’s how it’s supposed to work. But in practice, it might not be so straightforward. At least five state-run exchanges—Colorado, Idaho, Kentucky, New Mexico and Rhode Island—have yet to start accepting plan applications. If they have serious problems in the next few months–and it is a real possibility that some of them will–they could potentially have to hand plan management over to the feds. Additionally, any of the partnership states, most of which have some degree of state-level opposition to the ACA, could theoretically drop out of that partnership and leave plan management to HHS.

If that happens, nobody is sure how review and certification will be handled. Most states and HHS are allowing several months for the full application and certification process to be completed. With the marketplaces slated to open on Oct. 1, that doesn’t leave a lot of time if things go awry. The federal government is ending its application period for the federal-run exchanges in the next few weeks. If a state doesn’t figure out until a later date that they can’t do plan management and must give that responsibility to the feds, the administration has no obvious mechanism for asking health insurers to submit their plans to HHS instead.

It’s all theoretical right now. But some insurers are worried that it could become a reality very soon.

“That’s a question we’ve been asking ourselves. Nobody’s heard a word,” says one official at a top insurer, who spoke on the condition of anonymity. “At the end of the day, we’re questioning whether HHS is going to be fully ready, and we don’t know what that means if they aren’t.”

What’s the worst-case scenario? If responsibility for plan management is shifted from the state to the feds at the last minute, that could possibly delay the exchange’s opening until after Oct. 1, says Caroline Pearson, who tracks ACA implementation for Avalere Health, an independent consulting firm.

That might not have a huge practical effect for those who enroll—coverage being sold on the exchanges starts Jan. 1, 2014, so there is some lag time—but it would be a significant political blow to the Obama administration, which has steadfastly insisted that the marketplaces would launch on time. It could also complicate public outreach if people don’t know when their state’s exchange is actually opening.

“That could slow down enrollment and slow down marketing. It probably reduces overall enrollment,” Pearson says. “I think we’ve got time before you hit that point, but I’m beginning to get nervous.”

So how does this get resolved? There are a few apparent possibilities, though HHS is staying silent on what their plan is. One rumor, relayed to Governing by a knowledgeable source, is that the feds would ask any insurer planning to sell a plan on any state’s marketplace, including state-run and partnership exchanges, to submit their information to HHS before the federal application period ends in the next few weeks. That way, if the state fails to complete its plan management, the feds already have all the information they need to review and certify the plans themselves.

One insurance industry source said that sounded “plausible,” but hadn’t received any request directly from HHS. Another said they were under the impression that this is a rumor that is floating around the industry, but there were no indications that the feds would actually take that route.

The other possibility involves the two different electronic systems that states and HHS are using to solicit plan information from insurers. The state-run and partnership exchanges are using software called SERFF, which state regulators have used for years to collect information from insurers and review plans. The federal government is using HIOS, which is a separate system but performs essentially the same function.

SERFF and HIOS are capable of transmitting information to one another, one-state level source confirmed to Governing. So, in theory, a state-run or partnership exchange worried about its ability to complete plan management could ask insurers to submit their information to SERFF. Then if the state decides later that it can’t oversee plan management, the information already in the SERFF database could then be moved to HIOS, and HHS could take over.

One insurance industry source said they had heard that this would be HHS’s back-up plan if things go wrong with plan management in some states. HHS declined to confirm that on the record. So until these issues are resolved and open enrollment arrives on Oct. 1, the uncertainty will continue to linger.

Image courtesy of iStockPhoto. This story was originally published by GOVERNING.com

HHS Rebrands Health Exchanges as ‘Marketplaces’

As part of its campaign to increase public awareness about the Affordable Care Act (ACA), the U.S. Department of Health and Human Services (HHS) introduced some new terminology Wednesday: the entities formerly known as ‘health insurance exchanges’ — websites similar to Expedia or Orbitz where people can purchase health coverage — will now be called ‘health insurance marketplaces.’

It’s a subtle distinction, but one that could be key for branding purposes. Exchange is a wonky term, while marketplace will likely be more intuitive for the general public. To illustrate that point, Governing already commonly described the exchanges as “insurance marketplaces,” as did most other media outlets.

HHS Secretary Kathleen Sebelius made the transition official in a blog post published Wednesday, which coincided with a total relaunch of HealthCare.gov, the Obama administration’s online home for the ACA.

“Over the last two years we’ve worked closely with states to begin building their health insurance marketplaces, also known as exchanges…,” Sebelius wrote.

An HHS official told Governing that the department had begun using ‘marketplace’ in place of ‘exchange’ informally in recent months, and Wednesday’s announcement simply finalized the change.

“We felt simpler was better,”Jason Young, HHS deputy assistant secretary for public affairs, told USA Today in a story on the new branding campaign.

HHS could end up running exchanges in as many as 30 states in 2014, which could explain the renewed focus on public relations. So far, 17 states have committed to a state-run exchange, and two others will partner with the federal government for an exchange.

States have until Feb. 15 to decide if they want a partnership exchange. For those that don’t, HHS will be responsible for the whole operation, including public outreach.

Image via iStockphoto

You may use or reference this story with attribution and a link to

View the original article here

Health Insurance Exchanges: Benefits, Challenges, Lessons

On Thursday, Jan. 10, Government Technology hosted its first TweetChat: Innovation in Focus – States and Health Insurance Exchanges.

The chat, held on Twitter using the hashtag #GTonHIX, included industry experts John Sweeney, IBM’s senior product manager for the Curam solution, and Dan Schuyler, director for Leavitt Partners’ health insurance exchange practice, to answer questions about state health insurance exchanges (HIX).

An HIX is a government-regulated, standardized marketplace for the purchase of health insurance, and the Obama administration mandates that each state have one. States may choose to create and run their own HIX, or they can opt out and have the federal government create their exchange for them.

States had to declare whether they were running their own exchange by Dec. 14, 2012. And according to the National Conference of State Legislatures, as of Jan. 4, 2013, 19 states, including the District of Columbia, submitted blueprints for HIXs to the U.S. Department of Health and Human Services, which must approve the plans. Under the mandate, all insurance exchanges must be fully operational by Jan. 1, 2014. 

As the deadline looms, states may have pressing questions about what needs to happen by 2014. Here are some of the discussion highlights:

1.    What are the benefits for both states and their citizens in building these exchanges?

2.    Are there any lessons learned from states that have implemented or are in the process of implementing an exchange?

3.    What are the technical challenges the states face in implementing HIXs?

4.    How different will the HIXs be across states?

5.    How can states maximize the cost benefits of implementing these HIXs?

Photo from Shutterstock 

You may use or reference this story with attribution and a link to

View the original article here

Surcharges to Pay for Health Insurance Exchanges

With less than two weeks left for states to announce their plans for implementing Health Insurance Exchanges (HIX), how to pay for them has become a focus of the discussion. Several Republican governors have cited high costs as a deterrent for establishing state-run exchanges, opting instead to utilize federally-run exchanges. Officials in California, however, say their state-run exchange, the country’s largest, won’t cost taxpayers anything, according to a report in MedCity News.

California’s HIX will be financed by surcharges on the billions of dollars of insurance packages sold through the exchange. The surcharges are expected to range from two to four percent. “When California formed its exchange, we said it will not now or ever be a burden on taxpayers,” Peter Lee, executive director of the California Health Benefit Exchange told MedCity News.

Federally-run exchanges, which will be established in states that decide not to set up their own exchanges, will also be paid for with surcharges on insurance purchases, capped at 3.5 percent. To encourage states to run their own exchanges, the Obama administration has awarded more than $2 billion in start-up funding and extended plan submission deadlines more than once.

States estimate annual operating costs ranging from $15 million in small states to $300 million in California. Despite initial federal assistance, all funding for exchanges must be covered by states by 2015. A key component of the Affordable Health Care Act, Health Insurance Exchanges continue to be a divisive issue at the state level.

You may use or reference this story with attribution and a link to

View the original article here

Health Insurance Exchanges Are the Future

Over the past two years, many Republican governors held off taking steps to create a health insurance exchange (HIX) in the hopes that Mitt Romney would win the 2012 presidential election and repeal the Affordable Care Act.

And now, some states, particularly those run by Republican governors, are faced with less time to make a big decision — though the federal government did extend the deadline for states to decide whether to establish and operate their own HIXs.

States have three options for an exchange, as dictated by the Affordable Care Act:

States can run their own exchanges, with 100 percent funding from the federal government (though states will likely face costs in updating legacy systems to integrate with the exchange system);An exchange that is state-federal partnership can be established; orStates that choose not to participate in the development of an exchange will have an exchange established and run for them by the federal government.

And it seems the third option may be what will happen in several red states.

Some governors, like Maine Gov. Paul LePage, have completely checked out of the HIX discussion, refusing to participate in any way. “I’m not lifting a finger,” LePage told Bloomberg. LePage returned a $5.8 million federal grant that would have helped his state pay for setting up a partnership exchange.

Other Republican governors that have firmly opposed participation in the program include Florida’s Rick Scott, Louisiana’s Bobby Jindal, Kansas’ Sam Brownback, Texas’ Rick Perry, South Carolina’s Nikki Haley, Georgia’s Nathan Deal, Virginia’s Robert McDonnell, Alabama’s Robert Bentley, Nebraska’s Dave Heineman and Alaska’s Sean Parnell.

While some say that not participating in establishing and operating a HIX will rob states of the opportunity to negotiate the best rates with insurers, some Republicans have argued that they are not prepared to foot a large bill for a program they do not necessarily support. Now faced with the reality of four more years of an Obama administration, other Republican governors are working with the federal government’s deadline extensions to run their own exchange.

Enrollment in health-care plans is scheduled to begin in October 2013, as all Americans are required to be enrolled in a health-care plan by Jan. 1, 2014. But with some Republican leaders dragging their feet and the federal government seemingly willing to offer states flexibility, that timeline could change.

The deadline for states was extended in response to direct requests from some states that wanted more time, according to a spokesperson from the Centers for Medicare and Medicaid. “Our preference is for each state to establish its own exchange because a state-based exchange (SBE) provides states with the most amount of flexibility,” a spokesperson said via email. “There is no one-size-fits-all approach, and an SBE allows a state to structure its exchange in its own way that works for its citizens. For example, a state with its own exchange will be able to make needed changes to enrollment and eligibility, determine how to select plans to participate and how to subsequently manage those plans directly, and how best to educate consumers about the exchange.”

The deadline extensions are a further demonstration of the federal government’s intent to allow states to participate in not only the final rules of their exchanges, but also to be active participants in the whole process, said Gartner Research Director Rick Howard. While the practical effect of the deadline extension may not be to persuade stout opponents of the program to participate, it’s a “good-faith effort” by the federal government to encourage participation, he said.

Florida, Ohio and Missouri seem to be reconsidering some level of involvement in running their own program, Howard said, and Arizona, Utah and Pennsylvania may also find a way to meet the new deadlines. “I think that those governors who have resisted the exchange are doing so on the idea that they’ve seen some price tags that seem to be pretty expensive,” Howard said, adding that Republican governors may just be managing risk conservatively, and many of those now opposed to state-based exchanges may adopt an exchange once real-world models have been developed and demonstrated by other states.

Ultimately, Howard said, exchanges are the future, no matter who is in the White House. “You can wish away the Affordable Care Act, but that’s not going to change the underlying dynamics of the marketplace,” he said. “We’re seeing through merger and acquisitions activities that that’s being borne out. Health plans are looking to survive in a much more consumer-oriented marketplace that they just haven’t had to face before.”

Commercial health care was already headed toward a side-by-side comparison model because the advancement of technology has led consumers to expect more options while shopping, he said, and the Obama administration is trying to bring government up to speed with the marketplace.

Image from Shutterstock

You may use or reference this story with attribution and a link to

View the original article here