Even though states have chosen how they will set up their federally mandated health insurance exchanges, there is still a lot of uncertainty over what exactly consumers will be buying when open enrollment comes around October 1, 2013.
By last week's December 14 deadline, half of the country's governors had rejected setting up a state-run insurance exchange and instead opted to hand over the responsibility to the federal government. Health insurance exchanges will be run by a federal-state partnership in seven states, while the remaining 18 states along with Washington D.C. plan on having a state-based exchange.
Sonya Schwartz, program director for the National Academy for State Health Policy, says she was "not at all surprised" so many states opted out of running their own exchanges. "I'm a little surprised more [states] aren't doing the partnership. I think that's mostly politics, but I wasn't surprised at all that so many decided not to do it."
So far, nine of the states running their own exchanges have received conditional approval from HHS, and of those, Schwartz says the three states, as well as Washington D.C. are furthest along in planning: California, Colorado and Vermont.
These states, she says, have requests out for proposals for health plans to meet their qualifications to participate. "They have pretty strong sense of how they're going to be certifying health plans and what's going to be required."
Every state committed to running its own exchange is taking a different approach. Colorado, says Schwartz, is offering something akin to a free-market plan. "They are not going to be selectively contracting with plans," she says. "They have federal standards in place and plans are going to come in and they're going to have to meet that floor."
California's approach, on the other hand, is an active user model. That state got out front early with its exchange called, "Covered California," and is planning a big marketing push to enroll members, which Schwartz says is key to having a successful health insurance exchange.
"It's not just the amount, it's who. If you roll out the program, and you don't market it very well, you may only get the people who need healthcare now; [those] who are sick; who are old; who have issues. What you really want to do is reach also the people who will need healthcare... but maybe don't have such an urgent need, and maybe are a little younger, and who really seize the opportunity to get this federal subsidy to buy healthcare."
The way state-federal partnerships will work became a little clearer this month with some guidance from HHS.
In essence, Schwartz says, the federal government will build the infrastructure states use to help determine members' subsidies, plan costs, and plan options, which she says will help states a lot because developing the infrastructure is "such a heavy lift."
States then will be responsible for either the plan management or consumer assistance, or both. Schwartz says she's hearing that states are interested in taking ownership of the consumer assistance piece because states want "people on the ground" to help members enroll.
"We've seen a lot of states are estimating that more than half the people coming in the door are going to need time with individuals by phone or in-person to figure out what plan to enroll in. A website alone will not help them," says Schwartz.
States may also opt for managing the consumer assistance portion of the partnership because the assisters, as they're called, are subsidized with federal money.
For the states that have defaulted to the federal government's way of running an exchange, details are still murky. "We do not yet know exactly what else the feds are going to put in place, and we don't know if it's going to be easy for states or hard," says Schwartz.
One big question is in which states will health plans participate? Commercial payers already in the group and individual markets are in the best position to get set up to participate in exchanges.
Aetna announced at its last investors conference that it planned on participating in more than a dozen exchanges. No other health plan has made such a statement,though some industry watchers expect more plans to come on board after the first of the year. Schwartz predicts it could take even longer.
"If the feds really wanted to make it easy for plans, they'll allow plans to fill out a form and check off all the different federally operated state exchanges they want to participate in, and then they'll [health plans] have to figure out if they're meeting the commercial insurance rules in all those states. By spring, we'll know a lot more," says Schwartz.
Jacqueline Fellows is a contributing writer at HealthLeaders Media.