Tiny Delaware is one of only seven states to date committed to setting up a partnership-based insurance exchange with the federal government. It was one of the first states to receive federal approval for its exchange model, and was an early adopter to the idea of health insurance exchanges, reaching out years ago to neighboring states to gauge interest in setting up a regional exchange.
Rita Landgraf is Secretary of the Delaware Department of Health and Social Services, the agency overseeing the development of Delaware's State Partnership Health Insurance Exchange, which is estimated to cover 35,000 state residents. She recently spoke with HealthLeaders about the benefits and challenges of this new insurance model.
HLM: When did Delaware commit to setting up what is now known an insurance exchange?
Landgraf: The minute the law passed. That was just our philosophy early on. I would never want to say that we could predict what the Supreme Court was going to do, we had a federal mandate, we needed to get things going to meet the aggressive timeline, and even when it was challenged we weren't stopping to see what the Supreme Court was going to do.
Even within the challenges, we know that the cost of healthcare in the United States is far greater than any other country, and we also know that our outcomes are not good.
From my perspective, we started right at the time law passed and I think it was a great motivator, quite honestly, to pull us to the table to really look at this from a problem solving perspective. And, if the Supreme Court overturned it, I will tell you, I think in Delaware we would still be identifying what we need to do for this paradigm shift.
HLM: How would you characterize the progress of Delaware's state-federal insurance exchange?
Landgraf: Delaware is rather unique because of our size, and that presented challenges as we looked at what model we wanted to use. We initially evaluated doing our own state-based exchange. Because of our population being less than a million, when we did the modeling from a cost perspective, it really was cost prohibitive for us. We really felt like that [state based model] would drive up the premium cost.
We sat down early on with primarily CMS and HHS and started talking about some of those challenges, and, I believe, that's when the idea of a state-federal partnership began taking shape. Delaware was one of the first states that committed to that, and I really think Delaware was really poised to craft what this hybrid will look like.
The thing we're concentrating on right now are the Marketplace Assisters. As part of the implementation, the Marketplace Assisters are that consumer outreach identity that we will be contracting with—probably organizations.
Those organizations will hire Marketplace Assisters; the state will need to certify them. The federal government will have some standards that the Marketplace Assisters will need to have in order to become certified. But their role is to assist that consumer base that is shopping on the exchange and then if the consumer actually wants to have more details, they'll hand that over to a broker.
PPACA also provides for Navigators. The difference between the Marketplace Assisters and the Navigators is the population you are outreaching to.
I believe the Navigators will be outreaching to the high risk population and we're still waiting for guidance as to how to define that population. That's why I think you see us getting a little anxious because we really want to be able to start training individuals, getting them on the ground.
HLM: What is it about the federal partnership that prevents premiums from going as high as they would had Delaware decided to run a state-based exchange?
Landgraf: We're going to get economy of scale. When the federal government actually builds that level of infrastructure for an exchange, they will be able to leverage that across populations that are either going to do a full federal exchange or will elect to go to the partnership model.
Originally they were looking at regional exchanges. And early on I did outreach to the larger states... and what I found early on [was] the states that were interested in what we thought would be regional exchanges were states very much like Delaware. It was the low population states. The higher populations states, they don't need us. They can create their own state based exchange and don't have to worry about what's happening across state boundaries.
What we really believe is important for the state of Delaware is to retain that regulatory responsibility. We also wanted to retain responsibility to the consumers, too.
HLM: Will it be easier to replicate better health outcomes in certain populations in Delaware because your population across the state is smaller?
Landgraf: I think so. The benefit for Delaware is we can literally bring everybody to the table. I can travel the state in two and a half hours so we can touch every county. We also think of ourselves as an incubator state because we also have a rather large rural population as well as a rather large urban population.
HLM: How responsive have insurance plans been to Delaware?
Landgraf: Like any new program, we rely heavily on the ability to have information in a timely fashion; many times that's challenging. Many times, I will go back to HHS and say, "In order for us to really implement by October 2013, the plans will need certain information to be able to have time to return to us how their costing out their premiums and how they want to promote the plans on this exchange, and then for us to be able to certify them."
Some of that has presented challenges; however, I've had to personally make those calls to HHS and HHS has always been responsive in trying to secure that information for us.
HLM: How many health plans are you hoping will participate in Delaware's exchange?
Landgraf: I'm hoping that enough to give our consumers choice. I have been asking our Department of Insurance if there are any concerns relative to the volume of the plans, and the feedback I'm getting—they're not overly concerned that we would not have plans participating on the exchange.
HLM: Are you surprised more states are not participating in a state-federal partnership?
Landgraf: Every state has to look at the constraints of their own system. I can't speak on behalf of other states, but I believe what might start happening is those states that decide they indeed do not want to go up against the federal law will possibly will elect the state-federal partnership.
I think it would also depend what the plans may be doing. The plans might prefer to have the state-federal partnership, depending on the state, as opposed to going fully to that federal partnership, just from a regulatory point of view.
I think that we've been very fortunate with our relationship with HHS and the goals that we've been trying to achieve here in Delaware. They've been very responsive. Again, sometimes it's challenging, but I think it's challenging for them as well. We try to problem solve this together.
Jacqueline Fellows is a contributing writer at HealthLeaders Media.