Health Reform 2.0: States Balking at New Insurance Exchanges

Affordable Care Act's one-stop shopping for coverage won't be in place in time in many states, experts say

By Karen Pallarito
HealthDay Reporter

First part of two-part series

WEDNESDAY, Sept. 19 (HealthDay News) -- Under the Affordable Care Act, the Obama administration's controversial reform of health care, states are supposed to assist uninsured Americans in buying health coverage by setting up so-called "insurance exchanges."

But, many states are dragging their heels on building the necessary infrastructure -- and some have outright refused to do so.

This lack of action poses a significant challenge to get the law up and running.

Continued Republican opposition to the 2010 law, the U.S. Supreme Court battle to determine its constitutionality, and ongoing uncertainty over the future of health reform after the upcoming presidential election have stymied progress on exchange development, policy experts say.

"The ACA (Affordable Care Act) cannot be implemented without an insurance exchange in each state. It's a go or it's a no-go. It's that simple," said Robert Laszewski, president of Health Policy and Strategy Associates Inc., an Alexandria, Va.-based consulting firm.

So far, only 15 states and the District of Columbia have established exchanges, and three others -- Arkansas, Delaware and Illinois -- have indicated that they will partner with the federal government to do it, according to the Henry J. Kaiser Family Foundation.

Creating insurance exchanges -- which are designed to make it easier for consumers to shop for insurance -- is just one of two big hurdles facing the health reform law. The Supreme Court ruling in June upholding the constitutionality of the Affordable Care Act also allows states to opt out of the law's Medicaid expansion provision -- a key piece in the drive to bring insurance to an estimated 30 million uninsured Americans.

Critics of "Obamacare" hope that state resistance on both fronts will stop the reform effort in its tracks.

State-based health insurance exchanges are a critical part of the planned January 2014 expansion of insurance coverage through the Affordable Care Act, President Barack Obama's signature policy initiative.

Beginning with enrollment in October 2013, individuals and employees of small businesses who are uninsured can go to the exchanges to compare private health plan options across four levels of coverage -- bronze, silver, gold and platinum -- and purchase coverage.

The exchanges must ensure that each health plan offers a sufficient number of providers and meets other minimum standards. To participate in an exchange, an insurer must offer at least one "gold" and one "silver" health plan.

Each state's exchange must also maintain an up-to-date website with comparative health plan information; maintain a toll-free, consumer call center; and fund a "navigator" program to assist individuals and families with obtaining coverage. The exchanges are also the vehicle for people who meet certain income thresholds to qualify for tax credits to reduce their premium costs and federal subsidies to lower out-of-pocket expenses.