Advisor role in exchanges causes clash | LifeHealthPro

Advisor role in exchanges causes clash | LifeHealthPro.


Study: States should limit number of plans in exchanges

Study: States should limit number of plans in exchanges

By Sam Baker – 05/08/12 01:45 PM ET

States should use their new insurance exchanges to narrow down the number of plans consumers can choose from, according to an analysis published in the journal Health Affairs.

The article says states should follow Massachusetts’s example as they create their exchanges. A hands-on exchange with the power to set standards on top of the federal healthcare law will help prevent consumers from being “overwhelmed” by the process of buying insurance, the authors wrote.

The lead author of the Health Affairs piece is Rosemarie Day, a former deputy director of Massachusetts’s exchange. The state established its own exchange as part of then-Gov. Mitt Romney’s 2006 healthcare law, which formed the basis for President Obama’s 2010 reforms.

Day said consumers in Massachusetts preferred choosing from a handful of carefully vetted, clearly described healthcare plans. She said there is less evidence for the model used in Utah, where any plan that meets certain minimum standards can participate in the exchange.

States have looked to the dueling examples of Massachusetts and Utah — the only two states with exchanges that predate the Affordable Care Act — as they try to decide how best to structure their new marketplaces.

Conservatives favor the Utah model, while consumer advocates say exchanges should be “active purchasers” that have the power to negotiate directly with insurers.

Massachusetts’s experience shows that consumers prefer an active purchaser model, even though it could limit their choices, Day wrote.

“Findings from consumer research emphasized the value of limiting insurance plan choices on the exchange,” her analysis states. “Specifically, early focus groups showed that consumers wanted four to six carrier options at ‘low, medium, and high’ benefit levels.”

Consumers said they were anxious about the complicated process of choosing an insurance policy, and reported that they felt “overwhelmed” by the marketplace outside of a structured exchange, according to surveys the Massachusetts exchange conducted.

“Consumers valued having a range of options to choose from but also wanted the ability to obtain detailed information and were suspicious of apparently hidden information,” Day wrote, with co-author Pamela Nadash, a professor at the University of Massachusetts, Boston.

No Obamacare Exchanges

April 12, 2012 4:00 A.M.

No Obamacare Exchanges
Whatever SCOTUS does, states should refuse to create exchanges.

By Michael F. Cannon

Obamacare had a bad couple of days before the Supreme Court — so bad that President Obama made some ill-considered comments about the Court from which he still hasn’t totally backpedaled. Though the oral arguments over the individual mandate and severability were encouraging, we cannot count on the Supremes to kill Obamacare. Opponents must keep fighting it on all fronts.

The most important front right now is to ensure that states do not create the health-insurance exchanges Obamacare needs in order to operate. Refusing to create exchanges is the most powerful thing states can do to take Obamacare down. Think of it as an insurance policy in case the Supreme Court whiffs.

Exchanges are the new government bureaucracies through which millions of Americans will be compelled to purchase Obamacare’s overpriced and overregulated health insurance. Through these bureaucracies, insurance companies will receive hundreds of billions of dollars in taxpayer subsidies. Without these bureaucracies, Obamacare cannot work.

Here are just a few reasons why states should refuse to create them.

Jobs. Refusing to create an exchange will block Obamacare from imposing a tax on employers whose health benefits do not meet the federal government’s definition of “essential” coverage. That tax can run as high as $3,000 per employee. A state that refuses to create an exchange will spare its employers from that tax, and will therefore enable them to create more jobs.

Religious freedom. In blocking that employer tax, state officials would likewise block Obamacare’s effort to force religious employers to provide coverage for services they find immoral — like contraception, pharmaceutical abortions, and sterilization.

The federal debt. Refusing to create exchanges would also reduce the federal debt, because it would prevent the Obama administration from doling out billions of dollars in subsidies to private insurance companies.

The U.S. Constitution. The Obama administration has indicated that it might try to tax employers and hand out those subsidies anyway — even in states that don’t create an exchange, and even though neither Obamacare nor any other federal law gives it the power to do so. If that happens, the fact that a state has refused to create an exchange would give every large employer in the state — including the state government itself — the ability to go to court to block the administration’s attempt to usurp Congress’s legislative powers.

A lower state tax burden. States that opt to create an exchange can expect to pay anywhere from $10 million to $100 million per year to run it. But if states refuse, Obamacare says the federal government must pay to create one. Why should states pay for something that the federal government is giving away?

Bye-bye, Obamacare. That is, if the feds can create an exchange at all. The Obama administration has admitted it doesn’t have the money — and good luck getting any such funding through the GOP-controlled House. Moreover, without state-run exchanges, the feds can’t subsidize private insurance companies. That by itself could cause Obamacare to collapse.

Unfortunately, ever since Obamacare became law, lobbyists for the insurance companies and others who would financially benefit from it have been wooing state officials with the false promise that a state-run exchange would preserve state control over health care. If the Supreme Court fails to strike down the entire law, they’ll say, “Aw, shucks. Now you have to create an exchange.”

Nonsense. Obamacare does not and cannot mandate that states create exchanges. Moreover, state-run exchanges do not preserve local control. They will do Washington’s bidding, or else they will be commandeered or swept aside.

Even if we assume the Obama administration figures out a way to impose a federal exchange on states, are there any atrocities a federal exchange might inflict that federal regulations could not require state-run exchanges to inflict? Of course not.

That’s why every conservative and free-market group, including the Heritage Foundation and the American Legislative Exchange Council, has advised states to refuse to create an exchange and to send all related grants back to Washington. Florida, Louisiana, Oklahoma, Kansas, and Wisconsin have already done so.

If the Court strikes Obamacare down, state officials who refused to create an exchange will look prescient. If not, they will be positioned to drive a stake through its heart.

Michael F. Cannon is director of health-policy studies at the Cato Institute and coauthor of Healthy Competition: What’s Holding Back Health Care and How to Free It.

New spotlight on state responses to health-care law

New spotlight on state responses to health-care law

By N.C. Aizenman, The Washington Post, Published: March 31

Variations in the way states have moved to implement the 2010 federal health-care law have taken on greater significance after last week’s Supreme Court hearings, whose tone heightened speculation that the statute would be overturned.

With the exception of Arizona, all of the states and the District of Columbia have amended their health insurance rules or practices to comply with mandates imposed by the law. Those mandates include the elimination of lifetime coverage limits and the requirement that many insurers allow parents to put adult children younger than 26 on their plans.

States used a range of methods that, at the time, amounted to little more than technical variations in approach. Now those distinctions could make all the difference.

Maryland and Virginia

Maryland, for instance, enacted a law that cites the federal statute by name and essentially says all of its provisions are now state law as well. This means that if the federal law is overturned, those provisions will be immediately null and void in Maryland as well.

Carolyn Quattrocki, executive director of Maryland Gov. Martin O’Malley’s Office of Health Care Reform, said state officials chose to simply reference the federal law because it seemed the easiest approach and would ensure that any tweaks to the federal law would automatically be reflected in state rules.

Avid backers of the federal law, O’Malley officials did not take into account the potential consequences of taking that route in the event the statute was overturned.

“We just weren’t thinking about the possibility,” Quattrocki said. “It just seemed so remote and absurd.”

By contrast, Virginia’s General Assembly adopted the full text of the federal provisions into state law. So those rules will remain on Virginia’s books — and binding on Virginia insurance plans — regardless of how the Supreme Court rules.

Still, there’s a wrinkle: Virginia lawmakers added a sunset provision specifying that the law will expire July 1, 2014.

Virginia Del. Thomas Davis Rust (Fairfax), a moderate Republican who sponsored the legislation, said he included the sunset provision because “everybody was concerned that if the federal law was overturned we would want to come back and take a look at this.”

“We chose July 1, 2014, because we thought the court case would be over by then one way or another,” he added.

South Dakota lawmakers went a step further, including what one state official dubbed a “suicide clause” that automatically repeals the state law if the entire federal law is found unconstitutional.

But the practical effect of this provision could be limited, at best. That’s because South Dakota’s director of insurance issued state regulations implementing the federal provisions. These remain in force unless and until they are specifically revoked by either the director or the legislature.

“There’s been so much variation in the state responses to the [federal law] that it’s difficult to tell what would happen if the law were struck down,” said Katie Keith, a professor at Georgetown University who co-authored a study of state actions in detail.

“We do know that many states have baked in at least the early market reforms in the law. But what’s less clear is what happens in states that have not fully baked them in. A lot would be left to state interpretation.”

The provisions most clearly at issue are insurance regulations in the federal law that have already taken effect.

‘Bill of Rights’

Often referred to collectively by the law’s supporters as “the Patient’s Bill of Rights,” the provisions include not just the ban on lifetime limits and the extension of coverage to adult children. They also include a prohibition against excluding children with preexisting conditions, restrictions on annual coverage limits and requirements that insurers cover preventive services such as mammograms and colonoscopies without co-pays or deductibles.

Compared with the far-reaching changes the federal law will usher in beginning in 2014, the “bill of rights” provisions are fairly modest. But they are among the most popular in the law, and they have already affected the lives of millions of Americans.

Technically, states did not need to align their insurance regulations with the federal law. But if they did not, the federal government would have had to enforce the rules.

“I guess our feeling is that insurance should be regulated by the state, and this was one way of ensuring that continued,” said Randy Moses, assistant director for policy analysis and legislation in the South Dakota Division of Insurance.

Like many Republicans in Virginia — one of 27 states to challenge the health-care law in court — Rust is no fan of the statute. Still, if the law is struck down in its entirety, he is not sure he would advocate allowing the insurance provisions in Virginia’s law to expire with the sunset.

“I think most of them are pretty noncontroversial,” he said. “The insurance companies are already writing them into their policies. People are already paying for them in their policies. And I think they are pretty widely accepted at this point.”

Staff writer Lena H. Sun contributed to this report.

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016

Health Exchanges Have Fans in Some States

Health Exchanges Have Fans in Some States

By LOUISE RADNOFSKY, Wall Street Journal

A handful of states say they are planning to press ahead and voluntarily implement a key part of the 2010 federal health-care law even if it is wiped out by the Supreme Court.

The Obama administration’s law faced three days of skeptical questions from the court’s conservative majority this past week, increasing the odds that part or all of the law will be struck down. The justices met Friday for their weekly conference, where they were expected to take a preliminary vote and decide how to issue their written opinions on the case, but they aren’t expected to announce their decision until late June.

The health-care overhaul requires that all states have a new insurance exchange where consumers can comparison-shop for policies. The law calls for them to operate like travel websites that sell airline tickets, allowing people to stack up policies next to each other and get plan details in simple terms.

The exchanges, set to take effect in 2014, are one of the most popular parts of the new law. States can run their own exchanges or let the federal government do it for them.

Officials in Rhode Island, California and Colorado—states where governors are broadly supportive of the law—say they plan to move ahead with their exchanges even if the entire law gets struck down. They added that they expect the law will remain in place, and are working to meet the 2014 deadline to get exchanges up and running.

"You can crystal-ball yourself to death," said Peter Lee, the executive director for the exchange in California. "If the unthinkable became thinkable, there are members of the state legislature, there’s an exchange board, there are constituents across the state who would say, ‘OK, now’s the time to take the next steps.’ "

Lawmakers in California have floated the idea of introducing a statewide requirement for individuals to carry insurance or pay a fee. Massachusetts is currently the only state to have this requirement.

Associated Press

Rhode Island Democratic Lt. Gov. Elizabeth Roberts, above right, sees ‘a role for an exchange here.’

Rhode Island officials, too, said they were pressing ahead with their state exchange and would also consider passing state-level legislation to substitute for parts of the federal law if they are struck down.

"There’s a role for an exchange here…and that can happen no matter what happens with the Supreme Court," said Democratic Lt. Gov. Elizabeth Roberts, who has been overseeing Rhode Island’s health-overhaul efforts.

Ms. Roberts said she had pushed legislation three years ago to create a state requirement to purchase insurance or pay a fine. She said she would be prepared to do it again, if necessary.

While states could still create their own exchanges if the whole law fell, they wouldn’t get the law’s federal funding to run them, or the federal subsidies designed to help lower earners buy coverage in the exchanges.

The executive director of the Colorado exchange, Patty Fontneau, said the legislation creating the state’s exchange explicitly banned officials from using state funds to prop it up, and that funds from private companies or foundations might be options for keeping it going.

She said that as officials consider applications from vendors to provide the technology to run the exchange, they are discussing the importance of being able to adapt to a different landscape.

"The deadlines are so tight that we are continuing to move forward, because we have to be flexible, and we realize…we can’t really stop and wait to see what happens in June," she said.

Most states have taken federal money to begin establishing their own exchanges, though they are at varying stages in the process. In all, the U.S. has given out around $730 million in set-up funds to date. A few states have turned away all funds.

Some Republican-led states, which have opposed the health-care law but have moved ahead with their exchange preparations just in case, said they would likely halt their efforts if the court overturns the law.

"We’re prepared to stop at any time, or to consider moving forward," said Seema Verma, a health-policy consultant for Indiana GOP Gov. Mitch Daniels.

A spokesman for Florida GOP Gov. Rick Scott said the state would comply with the law if it is upheld, but that officials would "cross that bridge when we come to it." Florida has turned away federal money to create its exchange.

Lane Wright, the spokesman, said the governor’s administration was "confident" the law "will be ruled unconstitutional, and so we’re not very concerned how these exchanges would be set up."

Write to Louise Radnofsky at louise.radnofsky

A version of this article appeared Mar. 31, 2012, on page A5 in some U.S. editions of The Wall Street Journal, with the headline: Some States Want Health Exchanges.

Crunch time for health exchanges

Crunch time for health exchanges

Posted by Sarah Kliff, Washington Post at 05:45 PM ET, 02/22/2012

The Obama administration announced Wednesday that it’s sending $229 million to 10 states to set up health insurance exchanges, where individuals will buy subsidized health coverage come 2014 (think of them as an Expedias for insurance). So far, the federal government has spent nearly $1 billion to get the exchanges up and running by 2014.

This year will be a pretty important one for states on health exchanges. All 50 are eligible to apply for multimillion-dollar planning grants, and, so far, 33 have received them (you can see which ones in the map above from Kids Well Campaign). To establish the new marketplace, however, nearly all states need to pass laws creating new legislative authorities. There, progress has been slower: Only 15 states have passed exchange legislation.

A state has to have made enough progress on setting up an exchange by January 2013 to be certified by the Obama adminstration as able to launch a marketplace the following January.

The White House wants every state to set up its own exchange so that they don’t have to face the prospect of the federal government having to do it for them. The number of states that obtain the grants and move legislation in 2012 could have a strong impact on the federal government’s workload.

With Many States Behind Schedule, CMS Is Likely to Set Low Bar for Certification

Featured Health Business Daily Story, Feb. 22, 2012

With Many States Behind Schedule, CMS Is Likely to Set Low Bar for Certification

Reprinted from INSIDE HEALTH INSURANCE EXCHANGES, a hard-hitting monthly newsletter with news and strategic insights on the development and operation of state and private exchanges.

By Steve Davis, Managing Editor – February 2012 – Volume 2 Issue 2

While HHS collectively has awarded $729 million to help states stand up an insurance exchange (see table, p. 4), many states will run out of time long before they run out of cash. As a result, HHS is expected to set the bar low when evaluating certification applications for state insurance exchanges, industry observers tell HEX.

The reform law requires HHS to certify state exchanges no later than Jan. 1, 2013. But with many states still waiting for their legislatures to act, or for the Supreme Court to rule on the constitutionality of the reform law, overall development of state exchanges is woefully behind schedule.

In November 2011, CMS issued a 14-page draft certification application, which states must submit this fall. But HHS has said little about what the certification process will look like. And given that a majority of states won’t be fully ready for certification — either by choice or circumstance — HHS is expected to help states make progress, rather than reject applications that fall short, according to a source who has worked with CMS’s Center for Consumer Information and Insurance Oversight (CCIIO) but asked not to be identified. HHS will most likely allow conditional approval with an action plan for states that don’t meet all of the certification requirements, she tells HEX.

Joel Ario, who headed HHS’s Office of Insurance Exchanges until last September, predicts that “substantially less than” half of the states that apply will receive full certification next January. Most of the others will need to rely on federal partnership options, which allow for “a certain amount of mixing and matching” of functions, he tells HEX. A state, for example, can focus on traditional functions such as insurer oversight and consumer assistance, while relying to varying degrees on the federal government for the front-end eligibility and enrollment system. “My hope would be that many states in this middle ground can move to a full state exchange over time, as the proposed rules allow.”

Frank Micciche, a senior advisor at the Washington, D.C., law firm McKenna Long & Aldridge LLP, says he’s not surprised at the approach. “Everything that CCIIO has done for the last few months now has been extremely solicitous of the states, doing everything possible to keep them from walking away from exchange establishment,” he says. The main motivation for such a strategy, he quips, is “complete terror” at HHS over the thought of having to run a large number of exchanges.

Deborah Chollet, a senior fellow at Mathematica Policy Research, agrees that HHS is likely to make the certification as “friendly” as possible, and notes that CMS would prefer that states operate their own exchange.

“States will be all over the map regarding their exchange progress…and a majority of them will be nowhere near ready by the Jan. 1, 2013, deadline. As such, HHS will need to issue ‘conditional approval’ based on different levels of progress,” predicts Dan Schuyler, who heads the health insurance exchange practice at the Utah-based consulting firm Leavitt Partners.

States that opt to build an exchange from the ground up will need between 24 and 36 months to develop the necessary information technology (IT). That means certification by next January will be virtually impossible for those states unless HHS is very flexible. Moreover, it’s unclear if the federal government will have enough time to create a federal program that can be plugged into states that can’t or won’t stand up their own exchange. And even if some form of a federal exchange model is operational early next year, Leavitt says it will be extremely costly for HHS to implement a federal exchange in states that have made progress but still lack a certifiable exchange. Prior to joining Leavitt, he helped define the technical goals and business processes for Utah’s insurance exchange.

Micciche anticipates that about 35 states will seek level one grants, but probably closer to 25 states will seek actual certification of an exchange this fall. “And if you get there, I think you’ll get the green light.” But he says HHS could face problems if states that received conditional approval aren’t ready to enroll people on Oct. 1, 2013.

‘Operational Readiness’ Will Be Challenging

The application is broken into three parts. The first section — Enabling Authority and Governance — requires a copy of the law or regulation granting the state authority to create an exchange. It notes that pending legislation won’t be enough. Applicants also must describe the entity’s governance structure and provide an overview of the board’s composition as well as details about how and why those members were selected.

Part 2, Exchange Functions, requires applicants to outline strategies for member outreach and education, call centers and the Web portal. States also must “provide evidence” that they have enough staff to process applications through a variety of channels, and ensure there are safeguards in place that will allow the exchange to receive federal tax information.

Part 3, Operational Readiness, will be difficult for many states to complete, says Micciche. “You have to have your act together from an IT perspective and that’s where most states will get caught up,” he predicts. “Most of the other requirements are pretty easy to meet as long as they have legislation and have started doing their work. It’s the operational readiness part that is going to mean everything. That will be what really determines if a state is ready to be certified.”

But it’s highly unlikely any state will have everything complete by Jan. 1, 2013, which means applicants need to demonstrate only future capabilities. And how HHS measures that is anyone’s guess, he adds.

States that receive conditional approval can enter into a partnership with HHS to provide some services until the state transitions to a fully state-based exchange, according to a prepared statement CMS supplied to HEX.

Editor’s note: Here’s a link to the CMS page that includes the exchange certification application:….

Kevin Wrege, Esq.

Founder & President

Pulse Issues & Advocacy LLC

Office: 202-625-1787

Mobile: 202-253-4929

4410 Massachusetts Ave., NW, #150

Washington, DC 20016