State Health Insurance Exchange Decisions: Practical, Not Political

December 15, 2012

Click to listen in to a discussion I had with Dan Gorenstein and others on state exchanges

On December 6th, New Jersey Governor Chris Christie vetoed a bill that would have created a health insurance exchange for his state under President Barack Obama’s signature healthcare reform law. Leading up to the states’ December 14 deadline to declare whether they would run their own exchange, many have interpreted state decisions to operate their own exchanges – or not to – along political lines.

I talk about state exchanges with Dan Gorenstien in his Marketplace piece, “States must make health care decisions,” and with Alex Wayne in his Bloomberg.com article, “Insurers Face Jumbled Market With Health Exchange Rules.” But the decisions we are seeing now are much less political, than practical. Here’s why.

First, health insurance exchanges are the law of the land based on last summer’s Supreme Court decision on the constitutionality of the Patient Protection and Affordable Care Act (PPACA or ACA) and cemented by President Obama’s re-election. There will be no repeal of Obamacare. That political window has now closed.

Second, under ACA, a state can choose to have the federal government run its health insurance exchange either on an interim basis or indefinitely. So residents of New Jersey, Tennessee and other states that are leaving it to the Feds will have access to individual health plans on January 1, 2014 through a health insurance exchange. They will be covered.

Here’s why the move is practical. I know from running the nation’s largest private Medicare exchange for the last eight years that building an effective exchange does not happen overnight. It is time consuming and costly, with many moving parts.

There is the underlying technology and the crucial relationships with the health insurers that will offer plans in the exchange. There is the initial consumer outreach, education and support while consumers are evaluating and choosing plans and enrolling. There are the complex eligibility requirements that some individuals must meet to receive federal subsidies. Lastly, there is the reality that the newly insured will move between company, Medicaid and individual coverage at frequencies never before seen or managed.

Not knowing the details of what it will take to build and run an exchange or how much it will cost, Christie, Haslam and others feel it’s best to let the federal government run it for now. And they can revisit the decision in the future.

This makes practical sense. The states that will run their own exchanges from day one have been working on them for more than a year. For example, California was the first state to declare that it would run its own and appears to be further along than any other.

For New Jersey and others, at this time, it is the right move. That could change next year as more information about the success of the first state exchanges becomes known to the governor and state legislative leaders.

Governor Christie is right: This is a practical – not political – move.

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For regular commentary on developments and trends in health care, technology and insurance, follow @brycewatch and @ExtendHealth on Twitter and check out www.extendhealth.com.


One Response to “State Health Insurance Exchange Decisions: Practical, Not Political”

  1. The customer will be the ultimate decision maker. Why not give them as many options and let them decide what is best for them. By offering a platform that allows them to choose from an array of options will only help them make the best decision – be it embraced by an individual State or not. ACA is here to stay – let’s make the best of it.

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