State of the States: Health Insurance Exchanges

March 30, 2012

Even with all eyes focused on the Supreme Court’s consideration of the Affordable Care Act, there was plenty of activity in the states this week on the exchange front. In particular, Democratic governors had a rough week moving exchange legislation forward, and in some cases, are now threatening to use Executive Orders to create exchanges.

In Minnesota, Governor Mark Dayton (D) sent a harshly worded letter to Republican legislators, accusing them of obstructing the legislative progress in favor of scoring political points. In his letter, Governor Dayton wrote that, "unfortunately, there are some who would rather play politics with this exchange in an election year, than work sincerely and cooperatively to advance it in Minnesota." According to the Grand Forks Herald, Governor Dayton also informed Republican lawmakers that if the legislature did not pass exchange legislation he would “utilize the legal executive actions necessary to satisfy the federal law, as has already been done in other states.” 

Governor Andrew Cuomo (D) in New York had a similarly difficult week after reaching a tentative State budget deal. With Senate Republicans unwilling to include language authorizing the creation of an exchange in the State’s budget, Governor Cuomo announced on Wednesday afternoon his intention to create a health care exchange by Executive Order. He planned to issue the order by the end of the week, but as of 4PM Friday 3/30, it has not been issued publicly.

Bucking the trend by making progress, Maryland’s House and Senate were able to approve their respective versions of the Maryland Health Benefits Exchange Act of 2012, which sets the standards that will govern the operation of Maryland’s Exchange. However, even though the bills were passed by strong margins, votes were cast largely along party lines with Democrats benefiting from their strong majorities in both the House and the Senate. Differences between the House and Senate versions of the legislation will need to be reconciled in conference committee before heading to Governor Martin O’Malley (D).

As for RFPs/RFIs, next week Oregon will stop accepting responses to an RFI it released to gauge the necessary technological issues for the implementation of its SHOP exchange. Also, Nevada is scheduled to release an RFP on April 2 to procure a “Software as a Service Business Operations Solution” to support the business functions of the Individual and SHOP exchanges. Interested parties should check the Silver State Health Insurance Exchange website next week. 

On the private exchange front, Booz & Co released a White Paper this week discussing issues that employers providing health insurance, insurance companies and brokers will face if they embrace private exchanges. The paper also includes highlights from a Booze & Co survey of employers and consumers to gauge their interest in using private exchanges.  Interestingly, the survey finds that 80 percent of employers would prefer to purchase insurance from a private exchange than from a public exchange and while employers generally favor a defined contribution approach, less than 20 percent plan to move to a pure defined contribution arrangement in which they would have little to no involvement in benefits selection and management. 

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