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On Exchanges: Model Unveiled by States, Foundations

By Jane Norman, CQ HealthBeat Associate Editor

June 8, 2012 -- A model that states could use to create their own health insurance exchanges was unveiled last week by the states that took part in developing it, the Silicon Valley company that did the design, and the foundations that financed the project.

Called Enroll UX 2014, the goal of the project was to "develop a first-class user experience for state and federal health insurance exchanges," says the project website.

Its emergence appeared to be a sign that even in states where there's political resistance to the implementation of the health care law (PL 111-148, PL 111-152), there is some level of bureaucratic interest in how the new marketplaces for health insurance sales would function.

According to the California Healthcare Foundation, which helped provide funding and was the managing partner of the project, it was made public at a meeting of state and federal officials in San Francisco. Staff from the Centers for Medicare and Medicaid Services (CMS) assisted with developing the model.

Participating states are Alabama, Arkansas, California, Colorado, Illinois, Massachusetts (in a collaboration with Rhode Island and Vermont), Minnesota, Missouri, New York, Oregon and Tennessee. Some of them have Republican governors who have been reluctant to move forward with full implementation of exchanges until the Supreme Court rules on the constitutionality of the law, a decision expected by the end of the month.

In Alabama, for example, Republican Gov. Robert Bentley is saying he will set up an exchange at the last minute via executive order if the court upholds the law, according to the Mobile Press-Register. Alabama is also a party to the suit pending before the court.

In other participating states, disagreement on exchanges has prevailed even though the executive favors action. In Illinois, legislative action on an exchange is stalled despite the state's acceptance of a $32.8 million federal grant. Republican lawmakers have resisted implementation, and news reports in Illinois say Democratic Gov. Pat Quinn is considering an executive order setting up an exchange.

The foundations that provided funding included the Atlantic Philanthropies, Blue Shield of California Foundation, the California Endowment, Colorado Health Foundation, Kaiser Permanente Community Benefit, New York State Health Foundation, and the Robert Wood Johnson Foundation.

A briefing is scheduled in Washington for June 18 that will include an overview of the project, a look at the interactive prototype and a panel discussion of its benefits.

In other exchange news this week:

  • Vermont is the only state that mandates that individuals and small businesses take part in its exchanges and that's likely to be an issue in the race for governor, Vermont Public Radio reports. Democratic Gov. Peter Shumlin says the requirement will help move the state toward a single-payer system but GOP candidate Randy Brock wants voluntary participation, VPR says.
  • Joel Ario, former director of the office of exchanges at the Department of Health and Human Services, said in an interview with the St. Olaf College newspaper that the toughest challenge in his former position was "to find the right balance between state flexibility and minimum federal standards." Ario, who is a St. Olaf alumnus, also predicted that if the individual mandate of the law is struck down, "the exchanges will be in trouble" because individuals will be able to opt out of the system until they get sick, "unless we find another effective way to prevent freeloading."

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