July | August 2017





Funding Available for Health Insurance Exchanges

By Debra Miller, CSG Director of Health Policy
Joel Ario acknowledges states face unprecedented hard fiscal times. But Ario said grants are available to help states implement the federal Affordable Care Act Congress passed in 2009 to reform health care.
Ario, the Department for Health and Human Services official in charge of implementing the health insurance exchange provisions of the Affordable Care Act, said every state but one has received $1 million planning grants. A second round of grant proposals is due at the end of March to assist states with costs associated with implementing the exchanges.
Grant opportunities will be available through 2015 as long as states meet certain benchmarks along the way, Ario told attendees at a webinar powered by The Council of State Governments Knowledge Center. Ario pointed out that this federal funding has already been made available by Congress and is not subject to the federal budgeting processes under way now. 
The federal government is responsible for necessary expenses states will incur between now and 2015 as they move to implement exchanges, Ario said. After 2015, state health insurance exchanges must be self-funded. Funding will probably be through assessment of premium purchased through the exchanges, but states also are allowed to develop other funding mechanisms.
Ario said states likely will prefer to establish their own exchanges because they know their state markets. He said the federal government will be gearing up to run exchanges for states that opt out of running their own. Even in states where leaders have not embraced the Affordable Care Act, he said, planning for health exchanges gives states opportunity to take control now, rather than leaving it to the federal government.
He urged states to put in place the governance structure for exchanges during their 2011 legislative sessions. He directed them to model legislation from the National Association of Insurance Commissioners, as well as examples from other states available through the National Academy for State Health Policy website. Essentially states need to get the authority for the exchange established by legislation (California Assembly bill California Senate bill ) or executive order (as in Indiana ) and establish the governance structure for the exchange. The Department for Health and Human Services is developing a portal for information on exchanges, but it is not currently available.
States must decide between three governance models: a state agency, a nonprofit organization, or a quasi-governmental organization. Governance structures will need to address three issues: transparency, financial accountability and conflicts of interest.
Department of Health and Human Services officials urged states to take action to establish health insurance exchanges authorities sooner than later. The last chance for states to apply for “level 2” funding to complete the establishment of exchanges will be March 2012.  A requirement for that funding will be that the authority and governance of the state exchange be in place.
Two more webinars about health insurance exchanges will be hosted by CSG. The value of these CSG Policy Webinars is the ability of state level policymakers to ask questions. Ario and his staff have taken questions for at least 30 minutes after the conclusion of their formal presentation.

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