How Will States Set Up Health Care Exchanges?
MELISSA BLOCK, HOST:
Among the provisions of the health care law is that each state has to set up a health insurance exchange, a marketplace where people can compare health plans and then purchase coverage. There are lots of questions about how this will work and we'll try to answer some of them now with Alan Weil. He's the executive director with the nonprofit National Academy for State Health Policy.
Alan Weil, welcome to the program.
ALAN WEIL: It's good to be here.
BLOCK: And if an insurer is going to be part of this exchange, what do they need to do? Is there a certain package of benefits that they have to offer?
WEIL: The insurer has to offer what's known as the essential health benefits, which is a comprehensive set of services that you would find covered in a typical employer-sponsored health insurance product. They also have to cover a percentage of your costs as an enrollee in the plan at different levels to capture how much you would have to pay in the way of deductibles or co-insurance when you actually use services.
Then, there's some pricing rules. They can't charge you more because you're sick. They have to offer you coverage regardless of preexisting conditions and there are a number of pricing rules. And finally, they have to collect data and meet certain quality and quality reporting standards. So it's really a four-part obligation to be part of the exchange.
BLOCK: And from a consumer's point of view, what would an exchange look like physically. I mean, if I were to go to a website now, like ehealthinsurance.com, for example, I could compare policies. How would an exchange be different?
WEIL: Well, the exchange will definitely have a website as one point of entry. And I think what will make it different from the examples that people might be aware of today is it will be more structured. The insurance options will be calibrated in certain groupings that make it easier for people to compare policies. The information about what is covered and what's excluded will be presented in a more standardized format.
And for people who don't have coverage through their employer, they'll, by providing a certain amount of their own information, be potentially determined eligible for a federal subsidy that will reduce the cost of buying that coverage. So that's the internet or the website side of it. But the exchange also has to have other ways that people can interact with it. There have to be ways to call in and to even submit paper applications.
And there will be a whole system of consumer assistance so that if you don't feel comfortable supplying the information yourself, there will be various places that you can go that can help you make sure that you complete the application appropriately.
BLOCK: Now, if a state says I'm not going to set up an exchange - and a number of states have done this, South Carolina, Florida, among them - what happens then?
WEIL: Under the federal law, a state that chooses not to set up an exchange will have the federal government come in and run the exchange on their behalf and the citizens of that state will have the same opportunities available to them. They'll just be gaining those opportunities through a federally administered exchange rather than a state-administered one.
BLOCK: Does that mean that the federal government would be setting up different exchanges that vary from state to state or is it one big exchange that would cover certain states that have opted out of setting up their own?
WEIL: Most of the exchange infrastructure would be uniform nationally. Eligibility for financial subsidies is uniform nationally, so there's no need to tailor that from state to state, but certainly the insurance plans that are available are going to vary because different companies operate in different areas. So I would expect the front end to look very similar no matter where you are, if you're purchasing through a federal exchange. But what options are available to you will certainly differ.
BLOCK: And the timetable for all of this, Mr. Weil, the exchanges are supposed to be up and running by 2014, but there are earlier deadlines, too, that the states are supposed to meet, right?
WEIL: Yes. No later than November 16th of this year, states have to indicate whether or not they're going to set up an exchange so that by January 1st of 2013, in accordance with the law, the secretary can determine whether states are on the path to success. In the fall of 2013, the exchanges need to start enrolling people, which means they have to know what plans they're going to offer, they have to be able to present that information to consumers and on January 1st, 2014, people should have coverage available through the exchanges.
BLOCK: And based on what you've seen of where the states are with this, does that seem like a realistic timetable to you?
WEIL: It's ambitious. The states that have been working since the law was passed, they're going to be ready. There will still be some bugs to work out but the core functions will certainly be up and running by 2014. The longer states wait, the harder and harder it's going to be for them to have any realistic chance of bringing up their own exchange.
I should add also that there are sort of three options for how states do an exchange. They can really take it on themselves or they can enter into a partnership with the federal government and share responsibility for various functions or they can leave them almost entirely to the federal government.
So, one of the things that states that are a little behind might do is choose that middle option, so that they do the things that they have to get up and running, but they let the federal government do the parts that they don't think they'll be ready for.
BLOCK: Alan Weil, thank you so much.
WEIL: You're very welcome.
BLOCK: That's Alan Weil, executive director with the National Academy for State Health Policy.
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