Posted: September 16, 2013
The new health care exchanges:
Train wreck or much ado about nothing?By Patricia Dean
Despite its successful creation, Connect for Health Colorado recognizes that the glitches are inevitable. The largest identified to date resulted in a recent "red light warning" signaling a potential problem with data sharing between the Exchange and Colorado's Medicaid system.
While Colorado's Exchange leadership and managers from exchanges throughout the country are pressing the federal government for a workable solution, there are reports that the Social Security Administration data system will be off-line four hours every night, causing enormous slowdowns. However, Connect for Health Colorado indicated it will employ a contingency plan as a temporary solution if needed.
The other significant issue identified concerns the availability of premium subsidies for family coverage for employees of small businesses. According to ACA regulations, employees covered by small-group employers can opt out of employer-sponsored coverage and have the potential to receive federal subsidies to purchase insurance through the exchange if their employers’ plans are deemed unaffordable (meaning that the plans costs more than 9.5 percent of their employees’ income).
This rule, however, is based on the cost of an individual health plan. If the employee is offered both an individual plan and a family plan through his/her employer that costs in excess of 9.5 percent of his/her income, the employee's family is ineligible to receive premium subsidies in the Exchange. Members of the oversight committee from both parties have criticized the effect of this rule on vulnerable populations.
While all states are preparing for glitches, not all states are expected to fare as well as Colorado. Almost half of the states rejected the Medicaid expansion. As a result, an estimated 5 million of the nation's poorest individuals will not be able to get coverage in 2014. Similarly, 34 states elected not to set up their own marketplace, opting instead to have the federal government run their exchanges.
While federal employees will operate exchanges in these states, the federal government is stretched thin and problems for consumers and insurers alike are anticipated. Some of these states have been working with the federal government to make sure health plans meet the new standards and will assist with customer service.
Other states, such as Alabama, Oklahoma, Texas, Wyoming and Florida, however, had explicitly decided that their respective insurance commissioners will not review health plans to ensure consumers are protected. For example, in Missouri, a 2012 initiative passed by voters specifically prohibits state workers from providing any assistance to its health insurance exchange. And, in Florida, the legislature and governor stripped the insurance commissioner of his authority to block rate hikes for the next two years. Since this power rests with the states, insurance companies will be permitted to raise some premiums as much as they choose in 2014 and 2015.
As is the case with almost every aspect of Obamacare, rancorous debate surrounds how effective the state exchanges will be controlling costs and providing consumers with a transparent marketplace to shop for individual and small-group insurance. While there will be winners, losers and wide-spread glitches, its apparent that Coloradoans have a bit of an advantage.
Patricia Dean is an attorney with Holland & Hart specializing in healthcare transactions, regulatory matters, practice formation, government investigations, medical ethics and physician integration. She can be reached at (303) 295-8464 or PDean@Hollandhart.com