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Third Exchange Board Meeting

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This entry borrows freely form a blog post authored by Micah Weinberg, published May 24, 2011 in The New Health Dialogue - A Blog from New America's Health Policy Program.

The California Health Benefit Exchange held its third meeting today. The meeting was an update on progress toward planning the development of the new health insurance exchange portal for the state, targeted for launch in the spring of 2013. The focus of this meeting was on integration with existing state programs and systems.

The "Level 1" grant will among other things provide more funding to hire a staff for the Exchange. The June 15th meeting will feature the participation of key federal government officials. Pending the approval of this grant, expected by the end of the summer, the Exchange has no budget and is staffed primarily by people from other parts of the government and by consultants supported by charitable groups. Pat Powers, the Interim Administrative Director of the Exchange, promised that, after the Level 1 grant is submitted, there will be time to do more strategic planning.

The substance of this meeting was on program integration, particularly as it relates to the eligibility and enrollment systems currently administered by the state for its existing rublic programs. Deborah Kelch, who is acting as one of the leading consultants gave an overview of program integration requirements.

Representatives of the Department of Insurance and the Department of Managed Healthcare, gave high-level overviews of the core functions of their agencies and their track records.

In the second part of the briefing, Bill Obernesser, a lead consultant on this work, laid out the federal requirements and mapped out the state's existing eligibility and enrollment systems. He was followed by representatives from the County Welfare Directors Association who spoke in greater detail about the county-based enrollment system for Medi-Cal and by a representative from the Managed Risk Medical Board who talked about the separate state-based system for enrollment in Healthy Families, California's CHIP program. There was also a briefing by Terri Shaw, the Project Director for Enrollment UX 2014, a national project designed to help develop a common user interface for state exchanges.


I watched the webcast of the board meeting and it seemed clear that the Exchange board will become a de facto regulator of the health insurance market - certifying health plans etc. It remains to be seen how the health insurance exchange reinforce, overlap with, or undermine the activities of the state’s existing insurance regulators. I think it's time to merge the DOI and the DMHC.

As a former County Welfare Director, I doubt that California has made great strides, within the past year, in terms of creating online portals to enrollment. The state still has a system in which applications to the Healthy Families program that should be routed to Medi-Cal are printed out and sent by mail to the county that will process the application. Also the "MEDS" database that is supposed to act as the interface between the different programs is not adequate to continue to perform that function. The vendor(s) that will try to make these systems work together "seamlessly" have a huge task ahead of them.

Background: California is the only state with two agencies that oversee health insurers - the Department of Managed Health Care oversees health plans -- primarily HMOs -- that cover 21.6 million state residents. The Department of Insurance regulates most PPOs which cover about 2.4 million Californians.

Although no legislation has been drafted to combine the departments, some stakeholders have proposed shifting all health insurance regulation to one agency or the other.
During his campaign for office, Insurance Commissioner Dave Jones (D) called for the two departments to better collaborate and possibly merge, saying the dual structure is "confusing to consumers, inefficient and duplicative and can definitely lead to regulatory inconsistency."

Doug Heller -- executive director of advocacy group Consumer Watchdog -- said DOI's history of rate regulation would make it "the reasonable choice" to oversee the entire health insurance market in California.

As Interested Ovserver mentioned, the "seamless" functionality of the Exchange is very important. The Exchange is a portal to all types of coverage - Medi-Cal, CHIP, Subsidized private health plans, group health insurance, and transitions across programs must be "seamless." But the Exchange will have to rely on other state departments particularly as it relates to enrollment into Medi-Cal. Some of the presentations to the board (especially during the previous board meeting) have focused on this aspect of its work, but the surface of these issues has only been scratched.

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