October 15, 2012

Feds likely to launch ACA exchange

Health insurance exchange options


The state operates all activities; however, it may use federal government services to determine premium tax credits and cost sharing reductions; exemptions; risk adjustment programs and reinsurance programs.

State-federal partnership

The state operates activities for plan management and/or consumer assistance, and may elect to perform or can use federal government services for reinsurance programs and to coordinate with Medicaid and Children's Health Insurance Program on decisions and protocols.


The U.S. Health and Human Services operates the exchange; however, a state may elect to perform or can use federal government services for a reinsurance program and to coordinate with Medicaid and CHIP on decisions and protocols

Required essential benefits

The Affordable Care Act requires that all health insurance plans sold on exchanges beginning Jan. 1, 2014, cover 10 essential benefits:

  • Ambulatory patients services

  • Emergency services

  • Hospitalization

  • Maternity and newborn care

  • Mental health and substance abuse services, including behavioral health treatment

  • Prescription drugs

  • Rehabilitative services and devices; also services, therapies or other treatments that enable a person with a disability to attain functional abilities, or lessen the deterioration of function over time.

  • Laboratory services

  • Preventive and wellness services and chronic disease management

  • Pediatric services, including oral and vision care
  • The Affordable Care Act set a Nov. 16 deadline for states to declare whether they intend to establish their own health insurance exchange. It's a key provision of the act, one that is intended to provide affordable insurance to uninsured individuals and small business employees starting on Jan. 1, 2014.

    While Maine has not formally announced its intention, it is so far behind in preparing its own exchange that the federal model will likely be adopted by default. Adrienne Bennett, Gov. Paul LePage's press secretary, in a written reply to Mainebiz's request for confirmation that the governor won't be pursuing a state-run exchange, said she had nothing to report on the subject and that the state "is currently assessing options."

    But Mitchell Stein, policy director for the Augusta-based Consumers for Affordable Health Care, says even if Gov. LePage declares in the next month that Maine intends to create a state-run exchange, that's only step one of the process.

    The federal government has a 27-page checklist of steps that must be followed in order for a state to be certified as being on track to meet the ACA's October 2013 enrollment period and the Jan. 1, 2014, opening of the exchange. And on that front, Stein says, Maine will have a tough job convincing the federal government it will be ready to open its own exchange a little more than a year from now – given that LePage, in an April 18 letter, informed the federal Department of Health and Human Services he was turning back a $5.8 million grant that was to help pay for many of the federal government's set-up requirements.

    "There's a tremendous amount of work to be done," Stein says, citing as one example the required integration of the exchange's eligibility systems with existing Medicaid eligibility systems to ensure a low-income enrollee who's eligible for Medicaid gets referred to that program instead.

    Other requirements include:

    • Making sure the exchange has a seamless enrollment system that's able to handle in-person, phone or online applications with equity.

    • Having the ability to interface with the Internal Revenue Service to ensure that applicants meet the ACA's income guidelines for enrolling in a health insurance exchange.

    • Providing "apples-to-apples" comparisons between different insurance policies available through the exchange so that consumers can make informed choices.

    Stein acknowledges meeting all the requirements of setting up a state-run health insurance exchange involves costs that in a tough economy might be regarded as unaffordable. "Much of it would have been paid by federal grants" included in the ACA's enabling legislation, he says.

    Getting ready, or not

    According to the 2010 U.S. Census, 125,600 Mainers are uninsured, or roughly 10% of the population.

    Exchanges are expected to provide competitive marketplaces in which the uninsured can directly compare and purchase private health insurance options that meet their needs. The idea is that, pooled together, their numbers will be large enough to gain coverage that individually would be too expensive to buy. For certain low- and moderate-income uninsured people, the federal government will provide subsidies to make such coverage more affordable; or, in some cases, they could be referred to Medicaid for coverage.

    In a Sept. 27 status report, the Kaiser Family Foundation identifies Maine as one of eight states already serving notice to the federal government that they won't be pursuing a state-based health insurance exchange — the others being Alaska, Florida, Louisiana, South Carolina, Texas, South Dakota and New Hampshire. Kaiser says that number could grow, since 16 states are still studying their options and eight others have not shown any significant activity moving in the direction of creating a state-run exchange.

    As CAHC's policy director, Stein says he attended hearings in the last legislative session on two competing bills to create a state-run exchange. In their initial versions, he says, both LD 1498, favored by Democrats, and the Republicans' LD 1497, agreed on having Maine establish and operate its own exchange. In the end, a watered-down version of LD 1497 was adopted, stating that only licensed insurance brokers can enroll people in health plans through an exchange.

    Even if Maine opts out and the state ends up with a federally run exchange on Jan. 1, 2014, Stein says the state will have yearly opportunities to apply for approval of a state-run exchange down the road. Likewise, he says, the next Legislature could very well resurrect elements of the two failed bills calling for a state-run exchange.

    Stein says the obvious downside of having the federal government run Maine's exchange is that it removes local control and flexibility over how the program is set up and run. A potential plus, he says, is that it would likely fall somewhere in the middle of what he characterizes as the "passive" pro-insurance industry focus of the initial version of the GOP's LD 1497 and the "active" pro-consumer emphasis of the Democrats' LD 1498.


    Type your comment here:

    Most Popular on Facebook