As doctors, many of us are wondering what these state-based insurance exchanges are going to look like in 2014. We’ve been told exchanges will be the marketplace where small businesses and individuals will be able to buy affordable insurance. This is one of the promises of the Affordable Care Act.
Last week in Albany, I joined the discussion about what kind of health insurance exchange we should have in New York State. With the budget battle behind the governor, a panel of state officials brought together stakeholders from around the state. I joined my colleague Lois Uttley in representing the Public Health Association of New York City (PHANYC). Many of our partners in supporting health care reform were at the table, including Health Care for All New York, Medicare Rights Center, and Small Business Majority, among others.
In order for the exchange to be up and running by 2014, states are planning now. A handful have already passed legislation. The planning is supported by federal grants this year, and for those who use the planning dollars to pass legislation, startup grants will be provided in 2012.
As part of the planning process, state officials laid out general principles for the exchange:
1) affordable, comprehensive insurance options
3) transparent & accountable
4) “it must work”
They also posed several questions to stakeholders:
1) Governance: Should it be a state agency, a public authority, or a not-for profit?
- Should it be statewide or more local? (multi-state was not discussed)
- Should individuals and small businesses be combined in one exchange?
3) Purchasing: Should it be a clearinghouse, selective contractor, or active purchaser model?
4) Benefits Design:
- How do we encourage innovation without making it hard to compare insurance plans?
- Should plans in the exchange be required to provide all tiers (platinum, gold, silver, bronze, and catastrophic coverage)?
- Should we have a basic health plan for people between 133 and 200% of the federal poverty level?
5) Adverse Selection
- Should the rules be the same regardless of whether insurance is bought inside or outside the exchange?
- Should plans outside the exchange be required to provide all tiers (platinum, gold, silver, bronze, and catastrophic coverage)?
6) Organization of the Market
- Should individual and small group markets be merged?
- Should the small business size limit in the exchange be expanded from 50 to 100?
- Should it include businesses larger than 100 employees?
The two main camps most vocal in the discussion were consumer advocates and insurance industry representatives, often breaking along predictable lines. Industry was in favor of proliferating many plans (a clearinghouse model) instead of government-negotiated pricing (an active purchase model) as a cost control mechanism. Consumer groups wanted to see a more limited number of plans that consumers could easily compare in order to guarantee adequate transparency of services covered.
There was a surprising amount of consensus, maybe because some of the tougher questions were being deferred to separate legislation or administrative regulation next year. Most groups agreed it should be a state agency to ensure accountability, with special attention paid to the composition of the oversight board, and efforts made to streamline procurement, given the tight timeline for implementation. Regarding structure, everyone agreed it needed to be statewide rather than fragmented, in order to increase the risk pool, but there might need to be regional differential pricing, taking into account cost of living differences across the state. Most also agreed in having a single exchange including individuals and small businesses, in order to drive down rates for individuals (there was some concern this would raise premiums for small businesses, but others suggested this was not an issue base on available data). There seemed to be consensus that the rules for insurers, and the tiers of plans offered should be the same inside and outside the exchange, to avoid sicker people being shunted one way or the other.
There was no clear answer to whether a basic health plan should be offered to people between 133% and 200% of the federal poverty level, and this issue seems likely to be tabled until next year. Many also raised concerns about maintaining the current high standards for community rating, which would be watered down by adhering to the minimum requirements of the Affordable Care Act, but state officials suggested this issue would also be tabled until 2012.
As a physician, I joined many consumer advocates in raising concerns about having a seamless transition for patients cycling between Medicaid and private plans offered in the exchange, and further questioned how we would address the requirements that health plans provide sufficient access to primary care providers for the underserved, when we already have a shortage.
It will be interesting to see how closely the legislation the governor is expected to put forward in the legislature by June will resemble the opinions voiced by the majority of stakeholders present at this meeting. Stay tuned…
United Hosptial Fund Report on New York Exchange
New York State Health Foundation Roadmap
New York State Resources