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State Exchanges Use Their Powers to Customize Marketplaces

By John Reichard, CQ HealthBeat Editor

August 9, 2013 -- States that have launched their own insurance exchanges are taking seriously their power to customize those marketplaces, a Georgetown University professor said at a Capitol Hill forum Friday.

States, for example, are moving more quickly to provide consumers with information on the quality of health plans sooner than they have to under the health law, Sarah Dash, a professor at Georgetown’s Health Policy Institute, said at the Alliance for Health Reform/Commonwealth Fund event.

Seventeen states and the District of Columbia have chosen to establish their own exchanges, Dash noted in an analysis she conducted with other Georgetown researchers.

Nine states plan to display quality data on their exchanges in 2014, in most cases showing the performance of participating plans on national quality measures. However, some of the nine, including New York and Rhode Island, are either developing their own metrics or incorporating existing state-specific measures.

The health law (PL 111-148, PL 111-152) doesn’t require quality data until 2016, Dash said.

Do-it-themselves states also are ahead of the federal government on developing marketplaces for small employers, she said. The federal exchange won’t require an employee choice option in its marketplace for small employers until 2015. In 2014, employers will have a choice of plans, but their own workers won’t. But the employee choice feature will be a part of nearly all of the small-employer marketplaces established in 2014 by the states.

Nine states chose to limit the number of plans an individual insurer could offer. The limits were designed to give consumers a more manageable set of choices.

Thirteen states chose to establish both a navigator and an in-person assistance program. “To initially fund navigator programs, nine exchanges planned to use state funds or private grants until exchange funds become available,” said the study. Every state exchange allows agents or brokers to help consumers enroll through the exchange.

Ten of the states are relying on assessments on insurers to fund their marketplaces in the long term. Eight of the marketplaces haven’t decided on a long-term source of revenue.

Two jurisdictions—Vermont and the District of Columbia—are requiring that all individual and small group coverage be sold through their exchanges, not on the outside. Maryland and Massachusetts allow health coverage to be sold outside of the exchange but are mandating that certain insurers who sell in the small group or individual market have to also participate in the exchange or submit a bid to do so.

And several states acted to keep insurers from popping in and out of their exchanges. Colorado, New Mexico, New York and Oregon bar an insurer from entering their exchanges for up to two years if they do not join the first year, 2014. And Colorado and Connecticut prohibit an insurer from re-entering the exchange for two years if the insurer voluntarily opts out of the marketplace.

The health law requires that insurers participating in an exchange offer at least silver and gold level coverage. These metal rankings correspond to the generosity of coverage. The other metal options under the law include platinum and bronze level coverage, as well as catastrophic policies.

California, Massachusetts, and New York require plans to offer or propose coverage in all five levels: catastrophic, bronze, silver, gold and platinum. Vermont requires plans to offer all the levels except catastrophic. Connecticut, DC, Maryland, and Oregon require participating insurers to offer at least bronze, silver, and gold, and Kentucky requires at least catastrophic, silver, and gold.

John Reichard can be reached at [email protected].  

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