2011 ALEC Annual MeetingAugust 4, 2011

New Orleans, LA

Health Insurance Exchanges:States In Charge!

Agenda

• What States Face in the Wake of PPACA

• Exchanges: A Look at State Actions

• HHS’ Proposed Rule on Exchanges

• Looking Ahead: Critical Decisions and Strategic

Imperatives

2

3

2010 2014201320122011 201720162015 2018

HHS must determine if states have made sufficient progress in developing exchange

Jan 1, 2014 Premium tax credits available for enrollees under 400% FPL

March 23, 2011 Deadline for HHS Secretary to award Exchange grants

Jan 1, 2015 Exchange must be financially self-sustaining

Jan - May Non bi-cameral State legislatures convene

Jan 1, 2017Large group Exchange to go live

Jan 1, 2014 State Exchanges required to go live

July 1, 2010 Healthcare.gov goes live, simulating first Exchange

Preliminary insurance regulations take affect

Jan 1, 2015 Employer & Individual mandates in effect

Jan 1, 2016 States must choose to engage in healthcare Choice Compacts

PPACA Timeline

4

Functioning Statewide Health Insurance Exchange

Functioning State Exchanges

DC

Hawaii

Alaska

Last updated Jul 11, 2011

PPACA Compliance

States with PPACA Compliant Exchanges

Hawaii

Alaska

DC

Last updated Jul 11, 2011

Federal Funding for Exchanges

Planning & Establishment Grant Applied for and Awarded

Hawaii

Alaska

DC

Last updated Jul 11, 2011

Early Innovator Grant Recipient

Alaska

Federal Funding for Exchanges

DC

Hawaii

Last updated Jul 11, 2011

Alaska

Federal Funding for Exchanges

DC

Hawaii

Rejected, Returned, Intend to Return, or Intend to Reject PPACA Federal Funds for Exchange Establishment

Last updated Jul 11, 2011

Alaska

Federal Funding for Exchanges

DC

Hawaii

Level I Round One Grant Recipient

Last updated Jul 11, 2011

Hawaii

Alaska

DC Study Committee

Legislation Failed

Legislation Pending

Alternative Authority

No Bill

Establishment Legislation

State Exchange Implementation Authority

Last updated Jul 11, 2011

11

State Actions: A Closer Look (I)

• California• Early out of the gate with legislation• Slowing momentum

• Georgia• 2011 legislation dies in the face of opposition• Gov. Deal issues Executive Order creating Exchange Study Panel

• Idaho• Gov. Otter issues Executive Order prohibiting state agencies from

implementing PPACA provisions• Vetoes similar legislative measure, concerned it may prohibit

establishment of a state exchange

12

State Actions: A Closer Look (II)

• Mississippi• Legislation fails fourth year in a row• DOI uses existing language• MS exchange board is now the longest-established board in the

country

• Oklahoma• 2011 exchange legislation fails• State returns $54.6 million Innovator Grant• Not willing to default to the federal model, many state lawmakers

remain committed to state established exchange• Special Joint Legislative Committee established to study exchange

implementation

13

HHS’ Proposed Rule on Exchanges

• No big surprises

• HHS is preparing to implement the federal fallback

• Early mover advantage

• Emphasis on state flexibility

14

Potential State Positions on Exchanges

• Fully operational • State designs, builds, and operates an exchange complete with all the

features specified in PPACA

• Hybrid model• State oversees some functions of the exchange while contacting with

HHS for other features

• Minimalist approach• State implements exchange with just enough functionality to get

“conditional approval” from HHS

• Do nothing• State defaults into federal exchange; cedes control of all features and

functions

Mandated Exchange Functions

15

Portal / Web site

Enrollment and

Eligibility Interface

Carrier1

Carrier2

Carrier3

HealthPlan#1

Plan Comparison InterfaceHealth

Plan#2

HealthPlan#3

Administration Interface

Communication Interface

TREASURY

HOME LANDSECURITY

IRS

HHS

SOCIALSECURITY Verify Citizenship

Verify Income

Tax Credits

Verify Residency

STATEMedicaid

Eligibility

Reporting

Subsidies

Cost Reduction

CUSTOMERSERVICE

Notifications

Pay Premiums

Employeeor

Consumer

Billing or Invoices

Employeeor

ConsumerAdmin, Life Events, etc.

Customer Service

ONLINECALCULATORDisplay Total

Costs

HealthPlan#4

Carrier4

StateInsurance

Agency

Certify, RecertifyDecertify

Health Plans

NavigatorGuidance

DataService

Hub

FISCALAGENT

RISK ADJUSTMENT

Core Functions

16

Portal / Web site

Enrollment Interface

HealthPlan#1

Plan Comparison Interface

HealthPlan#2

HealthPlan#3

HealthPlan#4

Employeeor

Consumer

Carrier1

Carrier2

Carrier3

Administration Interface

Carrier4

Communication Interface

Admin, Life Events, etc.

Billing or Invoices

Employer

17

Early Decisions for States

Exchange

Federally Established

State Established

Selective Contractor

Market Facilitator

Non-Profit

Government Agency

Quasi Governmental

Government Agency

Quasi Governmental

Non-Profit

18

Operational Priorities for States

• Establish guiding principles

• Develop a general timeline

• Develop baseline information

• Engage stakeholders and create feedback mechanism

• Establish authority and governance

19

Strategic Imperatives for States

• Retain maximum control at the state level• Regulatory• Budgetary

• Lead, rather than follow• BY you or TO you• Influence federal regulations

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