by Mary Branham
It might be 2011, but when it comes to state implementation of federal health reform, Jan. 1, 2014, is just around the corner.
That’s what states must start thinking as they edge toward implementation of federal health care reform, Jason Helgerson, director of Wisconsin’s Medicaid program, said.
“January 1, 2014, is tomorrow,” he said in December during The Council of State Governments’ National Conference. “This is going to mean major changes for what, in many states, accounts for 20 percent of the state budget.”
And that’s just the changes that will affect state Medicaid programs. States must have health insurance exchanges up and running by Jan. 1, 2014, and they face a lot of early decisions to be ready, said Jon Kingsdale, a former director of the Massachusetts health insurance exchange.
The public face of health care reform, Kingsdale said, is the health insurance exchanges that states must set up or ask the federal government to set up.
The exchange—in addition to determining eligibility for public subsidy, setting up health plans and enrolling people in health plans—will be responsible for public education and outreach for health care reform, Kingsdale said.
The exchange, he said, is where the middle class, a large part of the voting population, will go for information.
“Like it or not, this is a very public piece of reform,” Kingsdale said. “If you own it, if you don’t cede it to the feds, it’s going to be the face of the state in health reform.”
That’s why, as Helgerson said, states need to begin now to plan for the exchanges, regardless of what happens with the state challenges to the Affordable Care Act. In the next year, states will be focused on governance of the exchanges, according to Anya Walleck, a consultant who has been involved in Massachusetts and Vermont health care reform efforts.
But, she advises state leaders, “this is a multi-year process. You need to be educating yourself about second tier issues.”
A key part, she said, will be forming relationships between the executive and legislative branches to ensure everyone is informed throughout the process of implementing the reform.
“It’s not all about the exchange,” she said. “If we get exchange-obsessed, we will miss some of those opportunities and the broader reforms that are really critical.”
Still, the states are facing some critical deadlines with regard to the exchanges, and policymakers will need to make some decisions in a hurry. Although the exchanges take effect in 2014, states must gain federal approval for their plan the year before.
“A lot of decisions have to be made in an extremely short period of time,” said Vernon Smith, of Health Management Associates Agency where he focuses on Medicaid and Medicare. Smith is a former Michigan Medicaid director. “The goal here is incredibly important. The goal is that no matter where you are on the continuum or how your income changes, your care should continue.”
Early Decisions For States
States must begin working on the health insurance exchanges now, Jon Kingsdale, a former director of the Massachusetts health insurance exchange, said. Anya Rader Walleck, president of Arrowhead Health Analytics and a health care consultant to state governments, said this year, policymakers will focus on governance issues. The early decisions states will need to make include:
State vs. federal: Will the state run the exchange or will officials cede control to the federal government?
State vs. regional (multi-state): Will states join a consortium of neighboring states to operate the exchange?
Governance: If the state will operate its own exchange, how will it be governed and how will it interact with other state agencies, especially Medicaid and the Department of Insurance?
Policy goals: What are the policy goals? What do you want the exchanges to do in your state?
Transparency and sources of funding: How much information will be transparent? Will negotiations between the exchange and brokers be carried out in public? Will the exchange receive any state funding?
‘Thou Shalt Nots’: How much will the legislation establishing exchanges prohibit something up front? Will legislation grant latitude to exclude any insurer or select brokers?
4 MODELS FOR EXCHANGE
Jon Kingsdale suggested four types of exchanges states might consider.
1 Stand-Alone Exchange—Competitive
This would be a state agency, but a public authority not in direct line of command of the governor, similar to the models used in California and Massachusetts. Under this model, insurers would compete for participation in the exchange.
2 Stand-Alone Exchange—Any Willing Health Plan
Similar to the previous model, this exchange would be open to any health plan that would want to offer services in a state.
3 Medicaid Exchange
Under this model, the state Medicaid program would be integrated with the exchange. It would be very closely tied in with the Medicaid program.
4 Integrated Super Agency
This model would pool the public and quasi-public buying power. That means the state Medicaid recipients would be pooled with state employees and teachers in the exchange. The Oregon exchange operates in this manner and serves more than 1 million people, Kingsdale said.