FOCUS OF THE WEEK
Health Insurance Marketplaces Get Obama Approval in 6 States
December 17, 2012, 05:19:18 PM
Despite rejections of multiples states’ pleas for partial expansion of Medicaid, President Obama has given the green light for health insurance marketplaces in 6 states.

Colorado, Connecticut, Maryland, Massachusetts, Oregon, and Washington received conditional approval by the President on Monday, December 10th, to set up their health insurance marketplaces. Meanwhile, many other states are ignoring the calls to create a marketplace altogether, remaining skeptical on the promise of Obamacare and opting for the federal government to find a way to make the exchanges feasible.

States are not required to expand Medicaid services per the Supreme Court’s ruling this past June; however, the White House says “the expansion would be a good deal for states because the federal government would pay the entire cost of Medicaid for newly eligible beneficiaries from 2014 to 2016 and then 90% or more of the costs in later years.”

President Obama’s all-or-nothing approach to assisting states with Medicaid expansion has drawn some criticism. In particular, the New York Times reports that Governor Bobby Jindal of Louisiana, Chairman, Republican Governors Association, said that “The Obama administration’s refusal to grant states more flexibility on Medicaid is as disheartening as it is shortsighted,” and added that the policy would “make a state’s decision on Medicaid expansion more difficult.”

Just how costly is it to produce a health insurance marketplace? The Denver Business Journal is reporting that Colorado’s Health Benefit Exchange will cost $22 to $26 million annually, and will include “expenditures that will have to be funded by fee assessments on insurers, potential fees on insurance buyers, and some ancillary revenues.” Despite the fact that insures will pass along some costs to individuals and small businesses that will utilize these exchanges, there will be a concerted effort to maintain balance in order to fund exchange operations while keeping insurance options affordable. “I think the approaches that we have on the table are pretty balanced, and I like that a couple of them are creative,” said Beth Soberg, a COHBE board member and president/CEO of UnitedHealthcare of Colorado.

Since the Affordable Care Act has passed, Connecticut has received $116 million in federal funds to build its health exchange. Governor Dannel P. Malloy recently spoke about the state’s approval to move forward. “This approval shows that we are continuing to make rapid, concrete progress in bringing about much needed improvements for consumers in our state's health insurance market," Lt Governor Nancy Wyman said. “While the majority of states are still grappling with how to move forward with health reform, all Connecticut residents should be encouraged by the progress we have made on this hugely important issue.”

Maryland has been ahead of the curve in terms of implementing a health insurance marketplace from the onset; in fact, the state was 1 of only 8 to receive a federal level 2 establishment to put toward the exchange. That grant was worth $123 million, and the state has received a total of more than $157 million in federal funding thus far. Governor Anthony Brown called Monday’s approval “an important milestone for our state and for the Maryland Health Benefit Exchange.”

Massachusetts continues to be a pioneer when it comes to creating a health insurance marketplace. From the onset, the state has been providing the blueprint for establishing an exchange quickly while relying on open source software. In fact, Wired points out that “the Massachusetts Commonwealth Health Insurance Connector Authority, the Robert Wood Johnson Foundation, and the Blue Cross Blue Shield of Massachusetts Foundation issued Building an Effective Health Insurance Exchange Website, a report which included a designated set of tools the Commonwealth’s Information Technology Division  recommended, including a mix of open source and third-party tools. 

Despite the conditional approval to move forward in Oregon, “proposed rules affecting the new exchange have sparked disagreement over how easy it will be for consumers to compare plans on the exchange as intended.” As a result, the Oregon Insurance Division recently extended the deadline for public comment on the issue to December 31st.

According to the Pudget Sound Business Journal, Washington State’s early action to begin producing a health insurance marketplace has paid off, resulting in more than $150 million in federal funding. “This conditional approval is a significant validation of the work that we’ve done to get our state’s health insurance exchange up and running,” Washington Governor Chris Gregoire recently stated. “We are clearly ahead of the curve and well positioned to remain a national leader on healthcare reform.”

To read more about President Obama’s recent approval of health insurance marketplaces in Colorado, Connecticut, Maryland, Massachusetts, Oregon, and Washington, please visit the resources below.

Around the Web

Obama Approves Health Insurance Marketplaces in 6 States [New York Times]

Six States Get An Early Greenlight From HHS On Health Exchanges [Kaiser Health News]

Price Tag for Colorado's Online Health Insurance Marketplace: $22M to $26M a Year [Denver Business Journal]

Federal Government Approves Health Exchanges for Six States, Including Connecticut [Hartford Courant]

Maryland Health Exchange Wins Federal Approval [Baltimore Business Journal]

Why You Need Open Source for Health Exchange Success [Wired]

Oregon's Health Insurance Exchange Wins Conditional Green Light, Sparks Disagreement [The Oregonian]

Washington Gets Preliminary Federal Approval for State Health Exchange [Pudget Sound Business Journal]