State-Based Exchanges

To date, 34 states have received planning grants from The Department of Health Human Services (HHS) to set up their own health insurance exchanges. According to the ACA, the HHS will establish and operate a Federally Facilitated Exchange (FFE) in states that have not shown progress toward implementing a health insurance exchange (i.e., meeting minimum functions of an exchange including enrollment, operating the Small Business Health Options Program [SHOP] program, and oversight of qualified health plans [QHP]) by January 1, 2013.

Federal HIX Partnerships

Last week, the Center for Consumer Information and Insurance Oversight (CCIIO) released guidance on implementing FFEs. Mindful that many states simply do not have the population or to justify the development of a state-based exchange, including many of the states who have planning grants, the feds offered all states the option to operate a HIX in partnership with HHS. While several partnership models were outlined, all include the feds managing the website and call center.

Open Market Model

The HHS decided that any health plans meeting certification requirements as QHPs will be able to participate in the FFE, thus using an open market model. HHS will provide ongoing support to FFEs to support their ongoing operations by developing and implementing a system to calculate user fees from participating issuers, with details expected this fall. And, to the extent permitted by a state, a federal exchange will permit agents and brokers to enroll individuals in a QHP through an exchange; web-based brokers can help consumers pick health plans online.

California Chooses State-Based Plan

After several hours behind closed doors, the California Health Benefit Exchange (HBEX) board decided to go ahead with a state-based exchange, at least for now. When discussing the federal partnership option in open session board member, Kim Belshe, voiced concerns about the “seamlessness” of the interface between federal and state components of the eligibility and enrollment process. Additionally, board members and stakeholders questioned the ability of a centralized federal call center to handle the diversity of California’s citizens on the basis of the variety of spoken languages alone. The federal partnership remains an option down the road.