Initial State Thinking About Exchange Governance and Structure

We recently posted comments that state agencies and officials submitted to HHS and OCIIO regarding the planning and establishment of state-level health insurance exchanges. These comments came from 23 states, and multiple agencies and Native American tribal organizations within a state.
HHS/OCIIO had asked for comments on a wide range of subjects relating to exchanges, including planning considerations and governance, operational issues, enrollment and eligibility, outreach, qualified health plan issues, and consumer issues. At State Refor(u)m, we’ve begun examining these comments to find out states’ initial concerns and their plans for creating these entities. This blog post looks at three discrete topics addressed in the comments: establishment of state-run or regional exchange or opting in to a federal government-run exchange; governance; and factors to consider in structuring exchanges.
At the time these comments were drafted, most of the states submitting comments to HHS/OCIIO appeared to still be considering these issues. (Comments were due on October 4, 2010, barely a week after the state exchange planning grant awards were announced.) Interestingly, the states submitting substantial comments on these three topics—Maine, Oregon, West Virginia, and Washington—were already working on exchanges prior to the passage of ACA. In 2009, these four states received grant funding through a federal State Health Access Program (SHAP) grant to develop state health insurance exchanges. Other SHAP grantee states–Nevada, Texas, and Wisconsin–also submitted substantial comments on these issues, as did several other states, including California, which enacted exchange enabling legislation this year.
Here is a short synopsis of state comments on these issues:

• Regional vs. state vs. federal government-run exchange: Six states were leaning toward operating their own state exchange and no state mentioned wanting to be part of a federal government-run exchange. Most states either did not address this issue specifically or were in the process of considering their options. One state mentioned that it was interested in exploring a regional exchange:
  • Wisconsin expressed interest in exploring a multistate or interstate exchange, recognizing that health insurance coverage and the delivery of health care services is not restricted to local or state boundaries.
• Governance: At least three states were leaning toward establishing independent public entities and two states were considering a not-for-profit entity. Seven states were still considering their options. For example:
  • Washington was undecided about governance. The state noted that it found the flexibility of a nonprofit appealing, but also recognized the value of existing state agencies.
• Factors to consider for structuring exchanges: States mentioned many issues, but a few states, including Oregon and Wisconsin, cited a desire to have a single entry point, consumer friendliness, and ease of use. Several states addressed creating one exchange for the small business and individual markets:
  • Maine was considering combining the individual and small business exchange due to the state’s current infrastructure and capacity for doing so. The reasons provided included: facilitating and maintaining coverage during transitions; allowing for economies of scale, reducing administrative costs, and allowing for a larger risk pool with a greater potential impact on costs and quality.
  • Nevada commented that it will weigh factors such as administrative efficiency and potential value of combining risk pools in its decision about whether to combine the individual and small business exchanges.

As states continue to work through exchange issues, these additional resources may be helpful:

• Last month, NASHP hosted a webinar with officials from West Virginia and Maine presenting on their current efforts around exchange design issues. As SHAP grantees, both states have been working on their exchange for some time. Watch an archived version of the webinar to hear from Jane Cline, West Virginia’s Insurance Commissioner, and Trish Riley, the Director of the Governor’s Office of Health Policy and Finance in Maine.
• State Coverage Initiatives hosted a webinar last week showcasing Wisconsin’s new exchange prototype website. The website is a “one-stop” shop for eligibility determinations for populations eligible for Medicaid and the exchange. If you missed the webinar, you can view an archived presentation here. You may view Wisconsin’s prototype website here.
• State Refor(u)m’s section on exchanges contains 83 resources from 30 states and includes draft and enacted legislation, planning documents, exchange planning grants, consumer education documents and more.

Does your state have exchange-related resources to share with other states? Please send them—and any other health reform-related materials—to State Refor(u)m.