The Election is Over – The Debate Over State Insurance Exchanges

Posted by on November 20, 2012

Contributed by Jerry Lovrien

Jerry Lovrien has held positions of Chief Executive Officer at health and behavioral health facilities in Minnesota and Washington State. He served successfully as State Director/Commissioner of Health and Behavioral Health in Georgia, West Virginia and Minnesota. Jerry has taught high school through graduate courses and is currently an Instructor with Minnesota School of Business.

The election is over and the Affordable Care Act will continue to be implemented.  The Obama Administration has now given states additional time to submit plans for their state health insurance exchange.  States have until December 14 to submit their plans.  As many as 17 states have not decided if they will set up their own exchange or leave it to the federal government.  The question then becomes whether the Obama Administration can handle the workload.  

“These are systems that typically take two or three years to build,” says Kevin Walsh, managing director of insurance exchange services at Xerox. “The last time I looked at the calendar, that’s not what we’re working with.”

When Walsh meets with state officials deciding whether to build a health insurance exchange, he brings the chart below. It outlines how to build the insurance marketplace required under the Affordable Care Act. To call it complex would be an understatement:


These health insurance exchanges have been compared to a Travelocity or Expedia for health insurance. While that may be the case for the consumer, experts are saying that the technology needed is hugely complex.  It takes a maze of interconnecting computer systems to deliver health insurance to 30 million Americans.

“The reality is, states and the federal government are building something new,” says Pat Howard, who runs state health issues for consulting firm Deloitte. “There’s a rough blueprint in terms of federal regulations, but there’s still a number of decisions that need to happen to operationalize this.” 

Millions of individuals without health insurance will now be eligible for coverage through the insurance exchanges.  Designing a good system will take cooperation and effort from both the state and the federal governments.  The Medicare/Medicaid system has been brought forward as a possible model to follow.

The first task for a health insurance exchange is ensuring that those who are eligible for benefits know about them.  As of right now, research suggests three-quarters of those eligible don’t know.

It will require a huge outreach challenge.  One the federal government may not be best suited to complete. Experience shows that outreach is more effective at a local level.  As an example, Massachusetts saw high enrollment after it partnered with the Red Sox to promote its health insurance exchange.

The next step could be an even bigger challenge.  After people are aware of benefits, the health insurance exchange needs to figure out who is eligible for what. In many states, those who earn less than 133 percent of the Federal Poverty Line are eligible for Medicaid — except if the state has already extended benefits to an even higher level, as 35 states have for children.

There are a number of health care challenges ahead.  We will need an educated workforce to make good decisions and get things done.  Health Care Managers from Minnesota School of Business are be trained by those with industry experience.  They are prepared to deal with these challenges.

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