By Robert A. Holden, Esq., Senior Vice President
For health care policy makers, consumers and employers alike, the question this summer is: will the health care benefit exchanges be operational on time? Based on federal progress reports, the answer appears to be no, or at least operational only in part. The choices available to businesses and consumers may be limited to only a few plans, and information about them may be limited at the time enrollment begins this fall.
The full answer to whether a particular health benefit exchange will be operational on time may depend on where you or your business resides. For some time, delays in implementation have been anticipated given the mammoth task of having 51 separate health benefit exchanges operational and ready for enrollment October 1, 2013. By that date, 16 states, and the District of Columbia will have established compliant State Based Exchanges (SBEs). In 34 other states, consumers will access Federally Facilitated Exchanges (FFEs) operated by the Centers for Medicare & Medicaid Services (CMS). Now, we are beginning to get a clearer picture of what may be available to consumers that first day in October.
At the Federal Level: Miles to go Before They Sleep
The Government Accountability Office (GAO) released two reports June 19 addressing the status of efforts to establish FFEs and their related Small Business Health Options Program (SHOP) Exchanges. These reports followed final rules published June 4, in which CMS indicated that small business employers would be required only to allow employees access to a single health plan in the SHOP Exchanges. In their reports, the GAO found that while CMS had “met project schedules” with respect to a data hub necessary to coordinate eligibility in the exchanges, the work needed to test and integrate the data hub with state entities had not been completed. Additionally, CMS must complete certification of the Qualified Health Plans (QHPs) that will be available through the exchanges, upload information regarding those QHPs for consumer access, and complete consumer assistance efforts.
While there are a number of helpful analyses (here and here) of the report and its meaning, the key point is that a delay in the implementation of at least some exchange functionalities is certain, and that plan management efforts are central to making the exchanges work on time.
Plan Management: Back to the States
Prior to the enactment of the Affordable Care Act (ACA), states were the primary regulators of health care insurance. As such, they regulated health plans, determining health care provider network adequacy and benefit mandates. Naturally, the ACA intended to build off this expertise by inviting the states to create their own health benefit exchanges and determine which health plans would be approved for access by consumers.
While not all states agreed to assist, 31 have done so. Sixteen states (California, Colorado, Connecticut, Hawaii, Idaho, Kentucky, Maryland, Massachusetts, Minnesota, Nevada, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington) and the District of Columbia have taken control of which plans will be offered by establishing their own State-Based Health Benefit Exchanges (SBEs). Additionally, 15 states (Arkansas, Delaware, Illinois, Iowa, Kansas, Maine, Michigan, Montana, Nebraska, New Hampshire, Ohio, South Dakota, Utah, Virginia, West Virginia) have agreed through formal partnership or provisional management agreements with CMS to assist with the plan management functions of a Federally Facilitated Exchange (FFE).
Plan Availability is the Bottom Line
Not surprisingly, selection of plans has proceeded more quickly in states that have taken a proactive role. In a June 16 article, the New York Times identified 41 health plans that had been selected for SBEs in California, Colorado, and Maryland, as well as FFEs in Maine and Michigan. All states involved in plan management will be required to notify CMS of their selections by July 31, 2013. CMS intends to complete its assessments of QHP selections at the same time. This provides 45 days to upload plan information and test the data hub per the timelines illustrated in the GAO report. Observing state results will indicate whether these timelines will be met, and where exchanges will be fully operational on October 1. At the moment, businesses and individuals seeking coverage through the exchange in some states may be looking at relatively few choices.