Wednesday, August 8, 2012

Health Insurance Exchange Update: Wednesday, August 8, 2012

Oklahoma Flag
Setting up exchanges is a topic some legislatures do not want to deal with until the election. The name has even come under fire lately which will be explained further. But there are three states are setting up CO-OPs, California is having an issue with legislation that could hurt their exchange program, and Oklahoma seems to have been a victim of politics in the health care decision.

Tulsa World writes that Oklahoma, along with 28 other states, has decided not to set up their own exchanges. But the article tells that the legislature had every intention to set it up but they came under pressure from others not to set up the exchanges. But the state is looking at a possible expansion of Medicaid, sending letters to Health and Human Services Secretary Kathleen Sebelius with possible scenarios. 

In the west, three states are leading the charge with Consumer-Oriented and Operated Plans (CO-OPs). Allowed under the Affordable Care Act, CO-OPs are mean to stimulate more competitive rates for health plans offered through exchanges. Three states that are going forward with CO-OPS are Nevada, Arizona and Colorado. But there are questions about what would happen. If it is a success, then it could be a new sales channel for drug companies. But if it fails, costs could spiral out of control because CO-OPs cannot reject applicants and those applicants could possibly have expensive medical problems.

California has been leading by example, setting up one of the first exchanges in the country. But now there is news that this could be derailed somehow. Sacramento has legislation that would create a Basic HealthPlan. This will pose a potential threat to the California Health Benefit Exchange. The Basic Health Plan would take people who make less than two times federal poverty level out of the marketplace. It would put these individuals into a system that is run by the state’s Medicare called Medi-Cal. If this legislation is passed, it would rob about 40 percent of consumers and lose half of federal funding. The legislation is supported by public health plans, safety net providers and county workers. Those who oppose this legislation are private health plans and conventional provider network that would rather compete for consumers through exchanges.  But this plan would lead to more problems besides competition. The Basic Health Plan is affordable only because it pays doctors and hospitals less than their underlying cost for providing care. In addition to that, there could unforeseen financial risk. The amount of federal funding that would be needed for the plan will not be determined until the end of the year, which is when the state sets their premium costs. This could lead to overestimating and a difference that could lead to $500 million. 

Never mind the fact that states are still opting not to set up most of the Affordable Care Act, there are some contemplating actually changing the name of exchanges.  In an article written for the Wall Street Journal, the word exchange is said to “raise suspicion of loopholes.” So with that, other states are now trying to come up with different names like Washington may be leaning towards Washington Healthlink, and Minnesota with two options: Health choices and Minnesota Health Insurance. As long as the exchanges are being applied, the name seems to be a minor issue though to appeal to consumers it may have to be welcoming.

This November, the Health Insurance Exchange Congress will be held November 13-14, 2012 in Chicago, IL.  Here, state officials and health plans with the only opportunity to come together to discuss PPACA and strategize on how to make this a successful opportunity for all.  For more information on this year's agenda, download the program here.  As a reader of this blog, when you register to join us and mention code XP1710BLOG, you'll receive 15% off the standard rate!

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