Health Care Reform (10): Feds promise flexibility on state health insurance exchanges, but not complaisance

This is the tenth in an ongoing series of posts examining the Affordable Care Act, including previous posts on rate review and temporary high risk pools. For links to all previous posts and additional resources, please visit the health care reform page on our website.  If you have thoughts on health care reform, we encourage you to comment below or contribute a guest blog.

Earlier this year, we blogged about health insurance exchanges, a major provision of the federal health care reform law, the Affordable Care Act (ACA).  In a nutshell, states have been tasked with setting-up online insurance marketplaces, or “exchanges,” for selling private coverage and determining eligibility for premium subsidies or public health insurance programs.  The online exchanges envisioned by the Affordable Care Act institute robust consumer protections, simplify plan and premium comparisons, and facilitate competition.  The deadline for states to gain approval for their exchange plans from the federal government is January 2013, and the deadline for having their online insurance marketplace up and running is January 2014.

The federal government has repeatedly assured the states “flexibility” in instituting the health law’s new programs and regulations.  When the Department of Health and Human Services recently issued its proposed regulations governing health insurance exchanges in early July, state flexibility once again took center stage.  So does all of this emphasis on flexibility mean that HHS intends to let states slide if their exchanges fall short of federal requirements or run behind schedule?  Not so, says a representative from the Centers for Medicaid and Medicare Services (CMS), part of the Department of Health & Human Services.

Laurie McWright, from the Office of Health Insurance Exchanges at CMS, spoke in late July to a meeting I attended that was hosted by the National Academy for State Health Policy.  Her message was clear:  States have the flexibility to design and implement an exchange that best suits their needs, but not the flexibility to miss deadlines or skirt compliance with minimum federal requirements.  If a state isn’t making a timely and good faith effort to comply with federal rules for insurance exchange operation, their efforts will be preempted by a federally-run exchange.  This means that the federal government will implement, operate, and monitor their own standardized exchange ‘template’ in the states that aren’t ready, willing or compliant by 2014.

Oklahoma’s plan for implementing a health insurance exchange is due in less than a year and a half, yet so far planning efforts are stuck in the earliest stages.  Ever since Governor Fallin and legislative leaders decided to give back the $54 million competitive grant Oklahoma had been awarded to design a state-of-the-art exchange, the nascent planning process has come to a virtual halt.  The Oklahoma Insurance Department, which seem to have assumed responsibility for the planning process, canceled meeting after scheduled meeting of stakeholder work groups in May and June, while the intricate blueprints and timelines developed for putting an exchange in place by the deadline are gathering dust.  Meanwhile, both of the bills introduced this past session attempting to authorize Oklahoma’s Health Insurance Exchange failed to pass, and seemed to fall well short of federal standards designed to ensure an affordable and consumer-friendly exchange.

A special interim committee to study the health care law was announced in early August.  The committee will hold a series of public meetings this fall and eventually make recommendations on how the state should address components of the federal health care law.  Every month that goes by draws us nearer to the January 2013 deadline for producing a blueprint for Oklahoma’s Health Insurance Exchange.  Swift and serious attempts to reach out to stakeholders, hold regular public planning meetings, and address minimum requirements are crucial at this juncture to avoid federal intervention.

To learn more about how states compare with each other in implementing key aspects of the health reform law, including exchanges, visit www.statereforum.org.  To learn more about health care reform in Oklahoma, visit the health care page on our website.