Decision Time: States Weigh Their Options for Health Insurance Exchanges under Health Reform

Published on
November 13, 2012

States may have gotten a short reprieve on deciding whether to set up their own versions of the new health insurance exchanges required under health reform, but the post-election message is clear: procrastination time is over.

Here's what you need to know to get up to speed on health insurance exchanges in your state.

Maggie Fox of NBC News neatly describes what the exchanges are supposed to do

The exchanges - think Travelocity for health insurance - will provide a mechanism for more people to buy insurance. They're supposed to provide a side-by-side comparison on price, what's covered and how much you might have to pay out of pocket for a doctor's visit. They'll also be a route for people to get a little extra cash from the federal government to buy insurance; the health care law provides for a generous federal subsidy for many, if not most, buyers.

Some states, including California, pushed ahead early on building their own insurance marketplaces. Other states, many led by conservative governors, were waiting until after the election to decide whether to build their own health exchanges, hoping that a Romney victory would ease their burden.

Now, all states have until December 14 to tell the federal government whether they want to build their own exchanges or let the feds do it for them. The exchanges must be up and running by Jan. 1, 2014.

David Pittman at MedPageToday reports that for states that haven't yet decided, details are still fuzzy on how the federal government-run exchanges would work. NPR's Julie Rovner today examines what states will have to do to set up the exchanges and how the exchanges will help consumers purchase insurance, as they're required to do starting in 2014.

Two resources from the Kaiser Family Foundation can help you keep track of what's happening with exchanges and other health reform implementation activities in your state: this table details state decisions on exchanges as of Nov. 9. Here's a useful timeline of health reform deadlines, including exchange deadlines.

According to the Kaiser Family Foundation, as of Nov. 9, 16 states have established their own exchanges, 11 have decided to default to a federal exchange, four are planning for a state-federal "partnership exchange," and 20 either haven't decided or don't appear to be taking any action at all. Update: Missouri and Oklahoma governors said today their states will not be setting up their own exchanges.

The Center on Budget and Policy Priorities also maintains a map of state progress, including information on state-level legislation and federal grants to help states set up exchanges.

What should you be asking about in your state?

1. Costs. Depending on how far along your state is in planning for health reform or its own exchange, officials should be generating some cost estimates. What are the costs of operating the exchange, and how will taxpayers be affected? When will the exchanges start releasing the costs of individual health insurance plans that consumers can buy? How many state residents does the state expect to insure?

2. Benefits. Which insurance plans will the exchange offer and what will they include? Will "essential benefits" in your state include things like acupuncture or bariatric surgery? (Here's a good round-up of how states are defining essential benefits of plans to be offered on exchanges). Is there a "model insurance plan" that state officials will use as a standard that other insurers must meet to offer their plans on the exchange? In California, for example, officials will use a small group HMO plan offered by Kaiser Permanente as the model.

3. Politics and legal challenges. Despite the Supreme Court's decision to uphold most of the Affordable Care Act and the reelection of Pres. Barack Obama, some states and organizations are still trying to challenge the law. Fights over contraception coverage still loom. Here's a good round-up of what comes next for challenges to the Affordable Care Act.

Photo by William Warby, via Flickr.

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