The ‘state’ of state health insurance exchanges

Provisions of the Affordable Care Act (ACA) have become a lightning rod for some state policymakers. The requirement for each state to have a health insurance exchange was intended as a mechanism to improve access to affordable health insurance for the uninsured or underinsured. This provision has generated considerable concern in some states that have yet to decide how they will meet the requirement. Registered nurses (RNs) have an important perspective to share as decisions regarding state health insurance exchanges are being made in their states.

Health insurance exchanges will be one-stop marketplaces for consumers and small businesses to select quality, private health insurance that best fits their health and financial needs. The state health insurance exchange will operate through a website that will provide a way for consumers to compare options related to price, benefits, services, and reported quality for “qualified health plans;” determine eligibility for possible tax credits; access a toll-free hotline for support from expert “Navigators;” and finally, facilitate enrollment in a plan. Enrollment for health insurance plans offered through the exchanges is set to begin in October 2013 and for operations to commence January 1, 2014. With less than a year before enrollment starts, there is tremendous pressure on the states and the Department of Health and Human Services (HHS) to pull all the pieces together to implement this core component of the Affordable Care Act.

Although the ACA set minimum federal standards, states have a great deal of flexibility with enrichments and implementation. Beginning as early as 2010, states and the District of Columbia (D.C.) were given federal grants to assist with the costs associated with the planning and start up of exchanges. States were presented with three options when designing the structure and governance for an exchange: state-based; partnership between the state and HHS; or federally-run exchange. It was largely anticipated that states would elect to run a state-based exchange, aligning more closely with the state’s existing insurance laws and market.

Some states’ policy makers delayed decisions around the exchange waiting for the Supreme Court’s ruling as to the constitutionality of the ACA and then the November election results. With both milestones passed as of November 20, 2012, seventeen states plus D.C. officially pledged to a run a state-based exchange or one in a partnership with the federal government. More than a dozen states have deferred to a federally-run exchange with the remainder undeclared. Although HHS Secretary Kathleen Sebelius extended the deadline for submission of the State-based Exchange Blueprint applications from its original date of Nov. 16 to Dec. 14, 2012, it is highly unlikely that any additional states will have sufficient time to establish a state-based exchange to meet the 2014 deadline.

Consumers benefit from other provisions

As many as 129 million or 1 in 2 non-elderly Americans have some type of pre-existing health condition, ranging from life threatening illness such as cancer to chronic conditions such as diabetes, asthma, or heart disease. The political rhetoric around the ACA has obscured many of the positive consumer-oriented provisions. Traditionally many insurers have denied such individuals coverage or imposed exceedingly high premiums. Under ACA, health insurers will be prohibited from denying coverage or renewal of coverage based on a pre-existing condition.

In an effort to keep costs down, insurers will be required to maintain a single statewide risk pool for the individual and small employer markets or place all into a single state-wide pool. Thus premiums and rate changes will be based on the health risk of the entire pool and not influenced by an individual’s health status, claims history, gender or occupation, and would be subject to review by HHS.

In addition to prohibiting denial of coverage to high-risk individuals with pre-existing conditions, some insurers are concerned about added costs stemming from other ACA requirements such as: the essential benefits package, no lifetime or annual caps on benefits, and no co-pays for certain preventative services.

Another provision that places additional pressure on health insurers is the requirement to submit data on the proportion of premium revenues spent on clinical services and quality improvement, known as the Medical Loss Ratio (MLR). Insurers are required to issue rebates to enrollees if this percentage does not meet a minimum standard of at least 80% or 85% of premium dollars spent on medical care, rather than administrative costs. Having all residents in the coverage pool is key to keeping costs down and there is worry that “healthy” young adults will not seek coverage. Therefore, the Internal Revenue Service is tasked with establishing regulations that will identify penalties for those who do not purchase health insurance coverage.

Nurses are in a unique position, as providers of care, as well as consumers, to help guide policy-making decisions that will impact them professionally and personally. The public continues to rate RNs as the most trusted profession, according to this year’s Gallup survey that ranks professions based on their honesty and ethical standards. RNs are increasingly being recognized as leaders in transforming the health care system. In addition to their clinical expertise, they are being sought out to serve in a variety of leadership posts on bodies developing recommendations related to a wide range of health care policy issues.

Nationally, in response to the proposed federal rules governing state health insurance exchanges, ANA advocated through comments that will enable each exchange to be responsive to nurse provider concerns and for the exchange to foster improved access to primary care and health care cost reduction that is the intent of the health care reform law. ANA recommended that: State policymakers include RNs as members of the governing board of a state health insurance exchange; recognize Advanced Practice Registered Nurses (APRNs) as primary care providers in qualified plans; acknowledge Nurse Managed Health Clinics, School-Based Health Clinics and Free Standing Birth Centers as Essential Community Providers; and consider APRNs as possible team leaders in Patient Centered Medical Homes and utilize those qualified to serve as Navigators. Nurses are encouraged to be involved in the promotion of access to affordable, quality care. Nurses’ involvement is essential to improve OUR health, individually and collectively.

Read ANA’s Issue Brief and learn more about state health insurance exchanges on the ANA website.
For updates about state decisions on health insurance exchanges, visit the National Conference for State Legislatures website.

Janet Haebler is the associate director of state government affairs at the American Nurses Association.

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