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Take Coverage: Healthcare exchanges keep steaming forward

PHO, MPARTS and PEW: healthcare’s acronym farm is filled with bygone initiatives that either never gained traction or quickly flamed out. Will the new health insurance exchange take root or follow suit? Representatives from Colorado and Washington—among the first states approved by the federal government to offer their own exchanges—shared formative experiences at the Healthcare Mandate Summit in February. Stephanie Eng and Brad Finnegan spoke before 120 industry leaders in Austin, Texas.

View states’ progress. Arguably the cornerstone of the Affordable Care Act, health insurance exchanges give individuals and small companies a way to purchase coverage. The insurance they acquire takes effect January 1, 2014. Universal coverage has long underscored healthcare reform efforts and by any standard the HIX represents a bold step toward this goal. While the so-called individual mandate survived a Supreme Court challenge in 2012, support among the states for the HIX varies wildly—often replicating the familiar pattern of red versus blue. But the federal government structured three categories of state response.

States can create their own exchanges, which 18 have done, or partner with the federal government, the choice of 7. A third option—selected by 26 states—was defaulting to a federally facilitated exchange. Exchanges don’t sell insurance outright but rather qualify which plans can legally offer it within their boundaries.

The law requires that exchanges not only make it easy for people to buy insurance but simple for them to understand it and compare their options. “We’re essentially moving from one era to another, and into a new marketplace where individuals can confidently go online and purchase health insurance on their own,” Finnegan said. He’s the operations program manager for Washington Health Benefit Exchange. Continued on next page

SHOP delayed until 2015

The Centers for Medicare & Medicaid Services will postpone creation of the small business employee choice program in the federal HIX. CMS said it would delay until 2015 employee choice and premium aggregation provisions of the Small Business Health Options Program. SHOP lets employees of small businesses choose plans from a menu; they aren’t limited to the ones previously selected by their employers. The 17 states and District of Columbia who previously decided to develop their own exchanges are expected to enact SHOP in full. The remainder will not have the option available until 2015.


Take Coverage: Healthcare exchanges keep steaming forward

“I would say there’s a


for clear guidance.”



Among the most difficult tasks handed the exchanges by the ACA is educating consumers (also called the Navigator program). The law requires that exchanges not only make it easy for people to buy insurance but simple for them to understand it and compare their options. What might be their out-of-pocket expenses, for example, if they chose one plan’s providers over another? The exchanges are further responsible for informing people about what tax credits—federal or state aid—is available to them based on their family income or other factors.

Boosting comprehension about abstract healthcare terms is hard enough when an individual’s native tongue is English. “It’s exponentially more difficult when you’re dealing with other languages,” Finnegan said. “There simply aren’t easy synonyms for ‘co-insurance,’ ‘deductible’ and ‘co-payment.’” While the number of Americans without any insurance has declined slightly in recent years, the figure stands today at around 16 percent. A majority of the population considers the creation of state-based health insurance exchanges a top

priority, according to a February survey released by the Kaiser Family Foundation, the Robert Wood Johnson Foundation and the Harvard School of Public Health. The mission of the HIX is straightforward. However, even supporters admit that the difficulties of their manufacture, like sausage, can be frightening. Part of the reason may be the way the law came about. Unwieldy technical issues are often sorted out in Congressional committees. But the ACA made no such stop on its way to passage between the House and Senate.


The law is extremely intricate and “sometimes it’s difficult to reconcile the Affordable Care Act with the Affordable Care Act,” Finnegan said. He and Eng both add that while regulatory updates often appear weekly from HHS, there remain many areas of confusion. “There are three different definitions of American Indians in the ACA. None is used by the Washington State Medicaid Agency. There are 29 federally recognized tribes in our state,” Finnegan added. “I would say there’s a real hunger for clear guidance,”Eng agreed. She is the Health Plan Manager for the Colorado Health Benefit Exchange; its consumer-friendly name will be Connect for Health Colorado. Working amid a vortex of state and federal agencies, health plans, consumer interests and bureaucracy generally makes for a bracing environment, but a sense of common purpose and enthusiasm still prevail, Eng and Finnegan agreed. “Our staff tends to be a particularly idealistic and optimistic group,” Eng said. While numerous details are left to individual states, the law spells out some universal requirements. These include guaranteed issue, a limit to price variations and out-of-pocket expenses and rescission regulations. The ACA also defines some categories as essential health benefits, and requires every state to address the categories. These include emergency services, maternity and newborn

care, prescription drugs and chronic disease management. See universal features. Reconciling state and federal legislation with practical business processes demands careful and continual outreach to carriers, Eng acknowledged. Dialog around payment schedules, reconciliation and many other subjects “is just so critical.” Key challenges—all complicated by the tight timeline—include federal dependencies, the IT flight path and delivery environment. Washington’s Sunshine Act demands a level of transparency greater than most other states, as all of its meetings must be conducted in public view. Modes of communication include presentations, newsletters and links to advocacy groups. Another requirement of the ACA is that states designate benchmark plans to establish standard packages. In Colorado that’s Kaiser; Washington selected a Regence small group product. Both Eng and Finnegan said their objective was to nudge the market, but don’t explode it. The laborious nature of the process means states that haven’t started have little hope of meeting the October 1, 2013 deadline, the speakers said. But they stress the importance of managing expectations no matter how diligently a state has prepared.

According to Finnegan, “the reality is that the exchanges are not the be-all end-all of health reform.”

Stephanie Eng



Despite the uncertainty and challenges, Eng asserts, “we find the whole community—whether providers, carriers or consumer advocates—extremely supportive.”

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