Tag Archive: regional or interstate exchanges

Exclusive: States quietly consider ObamaCare exchange mergers | TheHill

A number of states are quietly considering merging their healthcare exchanges under ObamaCare amid big questions about their cost and viability. Many of the 13 state-run ObamaCare exchanges are worried about how they’ll survive once federal dollars supporting them run dry next year. Others are contemplating creating multi-state exchanges as a contingency plan for a looming Supreme Court ruling expected next month that could prevent people from getting subsidies to buy ObamaCare on the federal exchange. The idea is still only in the infancy stage. It’s unclear whether a California-Oregon or New York-Connecticut health exchange is on the horizon.But a shared marketplace — an option buried in a little-known clause of the Affordable Care Act — has become an increasingly attractive option for states desperate to slash costs. If state exchanges are not financially self-sufficient by 2016, they will be forced to join the federal system, HealthCare.gov.

Source: Exclusive: States quietly consider ObamaCare exchange mergers | TheHill

The Patient Protection and Affordable Care Act provision referenced in this story is at Section 1311(f), which allows state exchanges to combine into “regional or other interstate exchanges,” subject to approval by the participating states and HHS. Another provision, Section 1333(a), would facilitate interstate exchanges by providing a mechanism for health plan issuers to pool risk and sell across state lines via “health care choice compacts” starting in January, 2016. Two or more states could enter into an agreement under which health plans could be offered in state individual markets, subject to regulation by the state in which the plan was written or issued, provided plans comply with the other states’ rules regarding market conduct, unfair trade practices, network adequacy, and consumer protection standards including standards relating to rating and handling of disputed claims.

While complex in and of itself, this might be easier to accomplish if state health benefit exchanges conducted eligibility and enrollment solely for commercial individual plans. A major complicating factor is Section 1413(c)(1) of the Affordable Care Act requiring each state to “develop for all applicable State health subsidy programs a secure, electronic interface allowing an exchange of data …that allows a determination of eligibility for all such programs based on a single application.”

This “no wrong door” policy requires the exchanges to screen households applying for coverage for income and household size eligibility criteria for both commercial Qualified Health Plans or QHPs) as well as state insurance programs such as Medicaid and the Children’s Health Insurance Program (CHIP). States have separate eligibility guidelines for these programs that won’t easily translate across state lines, especially considering a lack of uniformity among states on the Affordable Care Act’s expanded Medicaid eligibility. In addition, state operated exchanges as well as the federal marketplace have had difficulty integrating their IT systems to perform eligibility and enrollment functions fulfilling the Affordable Care Act’s “no wrong door” requirement.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Troubled state-based exchanges face critical decision

A half dozen troubled state-based health benefit exchange marketplaces (Maryland, Massachusetts, Oregon, Hawaii, Minnesota and Nevada) have been clobbered by IT glitches that have hamstrung their eligibility and enrollment functions. This circumstance calls into question the exchanges’ viability going forward since under the Patient Protection and Affordable Care Act, they must be able to financially support themselves starting in 2015 based on fees paid by health plan issuers collected for individuals and small employer groups enrolling in coverage. Getting too few people enrolled in 2014 suppresses that fee revenue and produces a knock on effect of reducing fees that could have been generated by 2014 plan renewals this fall for plan year 2015.

Each of the states must now consider their plan year 2015 options since too little time remains to recover sufficient enrollments with the close of the 2014 open enrollment period only about a month away.

The default option is to allow the federal government to take over exchange operations – the course chosen by nearly three dozen states for 2014. The federal government could also designate a non-profit organization to run the exchange marketplace in the affected states. In addition, the states have the option under Section 1311(f) of the Affordable Care Act that permits states to form “regional or other interstate exchanges,” subject to federal approval. That raises the possibility that the affected states – three of them are in the West – could opt to form a western regional marketplace, possibly with the federal government acting as a partner at least initially.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Maryland mulls high risk pool fallback for individuals with exchange enrollment problems

Maryland Health Exchange Emergency Bill to be Submitted Next Week « CBS DC.

The proposed legislation would enable individuals seeking coverage through the Maryland’s health benefit exchange but whose enrollments encountered processing glitches to obtain coverage through the state’s high risk pool. According to the story, the coverage would be retroactive to January 1, 2014, when state high risk pools were to end operations under new Patient Protection and Affordable Care Act market rules barring medical underwriting for individual health plans effective that date or later.

Several other states operating their own health benefit exchanges that experienced severe problems with the launch of their web portals face a similar predicament as Maryland including Hawaii, Oregon, Minnesota, Vermont and Massachusetts.

The account also quotes Maryland Gov. Martin O’Malley as stating Maryland is considering the possibility of switching from a state-based to federal exchange either completely or in part, as well as partnering with other states.

Section 1311(f) of the Affordable Care Act authorizes the operation of “Regional or Other Interstate Exchanges” operating in more than one state, subject to the approval of the involved states and the federal Department of Health and Human Services.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Paper discusses how states can share exchange marketplace knowledge, experience and functions

As has been pointed out on this blog, the Affordable Care Act contains options for health plan issuers to sell plans across state lines as well as for state health benefit exchange marketplaces to form regional exchange marketplaces with other states.

For those interested in an in depth discussion of the potential areas of interstate cooperation in the exchange marketplace, the National Academy of State Health Policy has published a paper on the topic, State Sharing of Insurance Exchanges: Options, Priorities, and Next Steps from the West Virginia Regional Exchange Study.

The project was initiated and funded by West Virginia out of that state’s concern that its relatively small, poor health status population may not make for an actuarially viable exchange marketplace. The paper posits that the current federal partnership exchange model where the federal and state governments jointly operate the exchange may provide the best environment to explore and develop sharing functions among exchanges as the partnership exchanges consider becoming state-based or regional exchanges.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

Credit unions partner with COOP plan in two Midwestern states

In two Midwestern states with a tradition of consumer cooperatives, credit unions will help enroll members in an Iowa-based consumer operated and oriented (CO-OP) health plan, CoOportunity Health, that will offer plans on the states’ health benefit exchange marketplaces. According to the CreditUnionTimes, CoOportunity Health will offer coverage in Iowa, which will operate a state partnership exchange with the federal government, and Nebraska, which has opted for a federally operated exchange. Group Benefits Ltd. will serve as the preferred broker, according to the story.

This is a noteworthy development because it shows interstate cooperation and the innovative use of an established and trusted distribution channel to drive enrollment in the exchange marketplace. It could also serve as a template for health plans to market across state lines via “health care choice compacts” starting in January, 2016 as authorized by Section 1333(a) of the Affordable Care Act. (The ACA specifies implementing regulations be issued by July 1, 2013, but the rules have not yet been promulgated). It could also pave the way for state exchanges to combine into “regional or other interstate exchanges” subject to approval by the participating states and the federal Department of Health and Human Services under ACA Section 1311(f).

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

ACA provides options for smaller states to create larger risk pools

Individual and small group health insurance markets will be the ultimate deciders of whether the Affordable Care Act’s market reforms and exchange marketplaces make coverage more affordable and valuable. Their experience over 2014 and 2015 will serve as a litmus test.

A major determinant of premium affordability will be a state’s ability to create large and diverse pools of individuals and small employers that enable payers to spread risk. Beginning in January, 2014, the ACA establishes two pools: one comprised of individuals and families and another made up of small employers. The size of those pools is naturally a function of a given state’s population and the heft of those pools has an impact on premiums. Large states like California have a natural advantage in creating sizable risk pools better able to spread out the cost of medical care. Accordingly, California has opted to leverage the market power of its population to actively negotiate with health plans over terms of coverage and rates for plans sold on its health exchange marketplace, Covered California. Smaller, less populated states, however, don’t have the law of large numbers on their side.

The Affordable Care Act appears to recognize this circumstance and has built in mechanisms that would enable smaller states to create larger, more robust risk pools:

  • Section 1312(c)(3) allows states to combine their individual and small employer markets into a single risk pool;
  • Section 1331(b)(3)(B) authorizes states to negotiate regional compacts with other states to cover low income individuals not eligible for Medicaid in “standardized health plans.”  (The federal Department of Health and Human Services (HHS) has held off issuing regulations for these plans until at least 2015);
  • Section 1333(a) provides a mechanism for health insurers and plans to pool risk and sell across state lines via “health care choice compacts” starting in January, 2016. Two or more states could enter into an agreement under which health plans could be offered in state individual markets, subject to regulation by the state in which the plan was written or issued, provided plans comply with the other states’ rules regarding market conduct, unfair trade practices, network adequacy, and consumer protection standards including standards relating to rating and handling of disputed claims.  (The statute requires HHS issue regulations governing health care choice compacts by July 1, 2013);
  • In addition to authorizing interstate plans, the ACA also appears to contemplate such plans being marketed in multiple state exchange marketplaces. Section 1311(f) allows state exchanges to combine into “regional or other interstate exchanges,” subject to approval by the participating states and HHS.

Given the large number of states where HHS will fully or partially operate exchanges, it’s possible the federal government will press the affected states to exercise some of these options to create larger purchasing pools in order to gain greater bargaining power with payers.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

ACA provides regulatory, market framework for sale of health insurance across state lines

The sale and regulation of commercial health insurance is essentially an intrastate affair.  States serve as discrete markets and each have their own rules governing health insurers and managed care plans.  However, several provisions of the Patient Protection and Affordable Care Act (ACA) are apparently intended to give the industry a more interstate flavor starting in 2014 when state health benefit exchanges chartered by the ACA open for business in each state.

Section 1334 of the ACA establishes a shared federal-state regulatory regime requiring health benefit exchanges to offer two “multi-state plans” (one must be a nonprofit) in their individual and small business exchanges.  These plans would be established under federal charter through the Office of Personnel Management (OPM) and licensed in all states.  The idea behind multi-state plans is to bolster competition in state markets, particularly those with smaller populations and fewer payers, as well as to create a larger risk pool to help assure affordability of premiums and ward off adverse selection.  At the same time, multi-state plans could raise fears among payers since by virtue of their large size (and thus their potential ability to offer more favorable coverage terms and rates), they could “crowd out” smaller, state-based players.

However, the Section 1333 of the ACA also provides a mechanism for health insurers and plans to pool risk and sell across state lines via “health care choice compacts” starting in January, 2016.  It allows two or more states to enter into an agreement under which health plans could be offered in state individual markets but subject to regulation by the state in which the plan was written or issued.  Plans sold outside their state of domicile would still however be subject to licensure and rules in the state in which the purchaser resides relative to market conduct, unfair trade practices, network adequacy, and consumer protection standards including standards relating to rating and handling of disputed claims.  The ACA requires the federal Department of Health and Human Services (HHS) to issue regulations governing health care choice compacts by July 1, 2013 and additionally mandates that states must enact legislation authorizing their formation.

Finally, the ACA allows the exchanges themselves to operate across state lines.  Section 1311(f) provides for “Regional or Other Interstate Exchanges” operating in more than one state if the involved states and the federal HHS approve.

 


Need a speaker or webinar presenter on the Affordable Care Act and the outlook for health care reform? Contact Pilot Healthcare Strategies Principal Fred Pilot by email fpilot@pilothealthstrategies.com or call 530-295-1473. 

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