States Moving Forward on Health Reform’s Insurance Exchanges
The continuing rhetorical battle over health reform shouldn’t obscure the fact that states are taking important steps to implement last year’s historic legislation. For example, virtually every state has made at least some progress toward setting up health insurance marketplaces or “exchanges,” which will give individuals and small businesses affordable, comprehensive coverage options. The Affordable Care Act calls for states to have exchanges up and running in January 2014.
California and Maryland have been out front: both states have enacted laws setting up their exchanges and appointed the boards that will run them. Now they’re beginning to tackle the key issues that must be resolved for the exchanges to succeed.
For example, they are considering how to minimize the risk of adverse selection against the exchange. If the people who enroll in the exchanges are less healthy, on average, than the people who buy coverage outside the exchanges, that would drive up premiums in the exchanges (since less-healthy people cost more to cover) and threaten their long-term viability.
Fourteen other states have also passed exchange-related legislation — including Connecticut, Nevada and Oregon, whose legislatures just approved bills this week. Some bills fully set up the state’s exchange, while others create a panel to recommend how the exchanges should be set up.
Our analysis finds that 39 states have introduced exchange legislation this year. While some states failed to pass their exchange bills during this legislative session, only Louisiana has publicly announced that it won’t set up an exchange. (In any state that opts not to establish an exchange, the federal government will operate one.) And in Arizona, Arkansas, and Mississippi, whose legislatures rejected exchange bills this year, the executive branch is moving forward with various planning activities or exploring alternatives to legislation.
States that haven’t yet introduced exchange legislation are moving forward, as well. Michigan lawmakers are preparing to introduce an exchange bill in the near future. At least half a dozen states have received federal “early innovator” grants to help develop new computer eligibility and enrollment systems for the exchanges. Kentucky, Nebraska, and Wisconsin have requested comments from the public on exchange design issues, while Delaware, Ohio, and Tennessee have held public forums and planning meetings with stakeholders such as insurers, health care providers, and consumer groups.
In all, 48 states (all except Louisiana and Florida) plus the District of Columbia are engaged in some level of exchange planning. That’s encouraging news for this critical piece of health reform.