NEW ORLEANS -- California got a round of applause from health policy leaders around the country this week for being first out of the gate with reform-driven laws to set up a state-run health insurance exchange.

"Let's stop for a minute and thank California for being the first state to pass enabling legislation," said Trish Riley, director of health policy and finance for the governor of Maine and moderator of a panel on exchanges during the National Academy for State Health Policy's 23rd Annual State Health Policy Conference.

"I'm envious of California," Riley told a room full of state officials who hoped to get some insights they could take home to start building their own exchanges. "I think there's a lot we can learn from the process they've already gone through."

Sandra Shewry -- former director of and current adviser to the California Department of Health Care Services -- outlined the California exchange, which was born last week when Gov. Arnold Schwarzenegger (R) signed two bills spelling out the details of the new state entity.

"It's a multipurpose tool, like one of those Swiss Army knives with lots of options," Shewry said. "We think that's the best way for us, but it may not be the best for every state. There isn't a line in the ACA (Affordable Care Act) that defines what an exchange should be, and I think it's quite purposeful that the ACA doesn't say the exchange is X. We have the ability to create what works best for us."
California Chose Middle Road

"Some people who don't know us think we tend to be extreme," Shewry said, "but we picked the middle path in this case."

Shewry said there are three main options in designing an exchange:

• As a market definer and organizer, in which the exchange becomes the market;


• As a purchaser, in which the state body selectively contracts with insurers; or


• As a clearing house in which the exchange acts as a platform for all plans offered by all issuers.

California's exchange, which will be governed by a five-member board, fits firmly in the middle category, Shewry said. "The board will have discretion over many of the details and in some situations may lean further toward one end or the other, but for the most part, our exchange falls in the middle," Shewry said.

Joel Ario, deputy director of the federal HHS Office of Consumer Information and Insurance Oversight and Shewry's co-panelist in the session on exchanges, told state health policy leaders that health insurance exchanges "are more of a Republican idea than most people realize."

"Back in 2004 and 2005, it was Republicans who were pushing for this kind of exchange, and it was Romneycare before it was Obamacare," Ario said, referring to former Massachusetts Gov. Mitt Romney (R).

"In California last week, you had Republicans arguing with a Republican governor that he shouldn't sign those bills (establishing the exchange), but at the end of the day, he did it because it's a good idea for the people of California," Ario added.

California HealthLine
Thursday, October 07, 2010
by George Lauer, California Healthline Features Editor

Read more: http://www.californiahealthline.org/features/2010/california-exchange-gets-lots-of-attention-at-conference.aspx#ixzz11hwIx9N5