Health Insurance Report™ helps you track and analyze legal, legislative, and regulatory developments affecting the health-insurance industry throughout implementation of the Affordable Care Act...
By Sara Hansard
Twelve states have notified the Department of Health and Human Services that they intend to establish state-based health insurance exchange markets under the health care reform law, HHS Secretary Kathleen Sebelius said in a blog post dated July 11.
The 12 states, with nearly a third of the country's population, are: California, Colorado, Connecticut, Hawaii, Maryland, Massachusetts, Minnesota, New York, Oregon, Rhode Island, Vermont, and Washington. Utah, which established its own exchange, as did Massachusetts, before passage of the Patient Protection and Affordable Care Act, was not on the list. The letters to Sebelius from Minnesota Gov. Mark Dayton (D) and New York Gov. Andrew Cuomo (D) did not state that their exchanges would be in operation by 2014, when all states are to have the exchanges under PPACA.
Meanwhile, on July 10, Kentucky Gov. Steve Beshear (D) told the federal government he will soon issue an executive order to create a state-operated health care exchange (see related article).
Individuals and small businesses will be able to purchase health insurance in the internet-based exchanges, which are intended to improve comparison shopping for “qualified health plans,” generally comprehensive plans covering 10 categories of “essential health benefits” that are rated based on the actuarial share of health care costs covered. “Platinum” plans will cover 90 percent of medical costs; “gold” plans will cover 80 percent; “silver” plans will cover 70 percent; and “bronze” plans will cover 60 percent.
“There is no one-size-fits-all approach, and each state has the opportunity to tailor its exchange to meet its citizens' needs,” Sebelius said in the blog. States have the flexibility to build a state exchange, work with other states, or partner with the federal government, she said.
“The Department of Health and Human Services is committed to flexibility in our support of the states' progress in whatever route they choose, as well as providing planning and implementation funds to help the states to establish the marketplace that suits their residents' needs,” Sebelius said.
States must provide HHS a summary blueprint by Nov. 16 of how they intend to operate their online insurance marketplace--on their own or within a federal-state partnership. HHS will establish federally facilitated exchanges in states that do not create an exchange or form a partnership.
Many states have lagged in moving to create their own exchanges, especially states led by governors and legislatures that oppose PPACA. Following the U.S. Supreme Court's June 28 ruling approving the constitutionality of the reform law's coverage mandate, some states are still not committed to setting up their own exchanges (see previous article).
In a webinar held July 12 by PricewaterhouseCoopers LLP's Health Research Institute, “Supreme Court decision to uphold health care law--implications for your business,” Sandi Hunt, a principal of the firm and lead adviser to states on health insurance reform, said that “quite a number of states,” including some where governors have indicated they would like to create state-based exchanges, have not enacted exchange legislation or other significant market reforms to implement PPACA.
PwC listed 13 states and the District of Columbia as “high progress” jurisdictions for implementing PPACA in which health insurance exchanges have been established, Medicaid coverage was expanded to childless adults before enactment of the health care reform law, and other early market reform activity has taken place: Hawaii, Washington, Oregon, California, Nevada, Utah, Colorado, West Virginia, New York, Vermont, Massachusetts, Connecticut, Maryland, and the District of Columbia.
“Moderate progress states are really going to have to make a decision about which pieces they're going to do themselves right away, and which ones they're going to rely on the federal government to assist with,” Hunt said. “Those states may use the federal exchange in the short run, but over time can still develop their own approach in later years,” she said. PwC listed 20 states as having made “moderate progress” in implementing PPACA: Montana, Arizona, New Mexico, Nebraska, Minnesota, Iowa, Arkansas, Michigan, Illinois, Indiana, Kentucky, Tennessee, Mississippi, Alabama, North Carolina, Virginia, Delaware, New Jersey, Pennsylvania, and Rhode Island.
“The low progress states are going to need to make a very clear decision about whether they want to now, with this guidance [from the Supreme Court], move forward and develop their own solution, or … rely on the federal government to move forward,” Hunt said. PwC listed 17 states as “low progress” states: Alaska, Idaho, Wyoming, North Dakota, South Dakota, Kansas, Oklahoma, Texas, Louisiana, Missouri, Wisconsin, Ohio, Florida, Georgia, South Carolina, New Hampshire, and Maine.
By Sara Hansard
Sebelius's blog post is at http://www.healthcare.gov/blog/2012/07/exchanges07112012.html.
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