State of the States: Health Insurance Exchanges

April 27, 2012

The states were unexpectedly busy this week addressing exchange issues. Let’s dive in.

First, we had some notable legislation pass in the states this week. To the north, Vermont’s Senate approved legislation that defines the types of plans that could be offered on Vermont’s exchange and the size of companies that would be required to use it. The legislation is very similar to a version that was passed in the House in February, but small differences still need to be resolved in a legislative conference committee. The final version is expected to be signed by Governor Peter Shumlin (D).

Moving down south, Alabama’s House passed HB245, which enables the creation of the non-profit “Alabama Health Insurance Exchange.” The bill was approved by a strong majority and received support from both sides of the aisle. Passage by the House is a marked difference compared to last year when a similar bill, HB401, failed to make it out of the House Health committee. HB245 now heads to the Senate.

But Alabama is not the only southern state to make progress with setting up a health insurance exchange. Also this week, the Arkansas Legislative Council approved a measure to allow the Department of Insurance to spend a $7.67 million U.S. Health and Human Services grant to construct its part of a health insurance exchange. While the measure had previously failed to pass in a subcommittee, State Insurance Commissioner Jay Bradford strongly argued before the full Legislative Council that approving the grant was key to avoiding a federally-run exchange in the state. As one of the first states to pursue the “federal-state partnership” model, Arkansas could provide an interesting model for other states should the Supreme Court uphold the ACA.

In New Jersey, political pundits are wondering what Governor Chris Christie (R) intends to do with the New Jersey Health Benefit Exchange Act that is currently sitting on his desk. Passed earlier this year by the House and Senate, Governor Christie is running up against a May 10 deadline to decide whether to sign, veto or conditionally veto the bill. If he does not act by the deadline, the bill becomes law. Since Governor Christie has adamantly said that he wants to wait until the Supreme Court rules on the ACA to make a decision on exchanges, most pundits believe Governor Christie will veto the bill and send it back to the legislature for revisions while waiting for the Supreme Court’s decision.

Finally, on Wednesday, Deloitte LLP officially inked a deal with the Washington Health Benefit Exchange to construct the Exchange’s IT backbone. Initially valued at $54.85 million, the contract will likely grow in value when maintenance and license renewal fees are considered. Meanwhile, exchange watchers are still waiting to hear which IT vendor California selected for its insurance exchange. According to the California Health Benefit Exchange, the announcement has been delayed while the Exchange engages in additional negotiations with the selected vendor. However, the Exchange is optimistic that the award will be announced before the next Board meeting on May 15.

With California’s forthcoming announcement, May will be a hot time for the IT vendor community. IT procurements in Arizona, Colorado and New Mexico are expected to be announced during May, while at the end of the month, responses to build Rhode Island’s Unified Health Infrastructure Project RFP are due.  

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