By Mike Odeh (Children Now) and Kristen Golden Testa (The Children’s Partnership) with the 100% Campaign
And we’re off! Implementation of the Affordable Care Act
(ACA) is officially underway! Less than six months after Congress passed the
ACA, California has blazed the trail as the first state in the nation to create
a statewide Health Insurance Exchange under the Act. Two complementary pieces
of legislation create the California Health Benefit Exchange and are headed to
Governor Schwarzenegger’s desk for an expected signature – (AB 1602 creates
the Exchange and SB 900 creates a decision-making board).
By creating the Exchange, the State has built a framework
that will dramatically improve the way many Californians, particularly the
uninsured, get health coverage and will set the right trajectory for health
reform implementation by providing new affordable coverage opportunities for
millions of children and their families!
Make no mistake – creating the Exchange was no easy task.
The legislation that created the California Health Benefit Exchange only came
about (on party-line votes) through strong legislative and gubernatorial
leadership, thoughtful and dedicated staff, and the efforts of a broad
coalition of health and consumer advocates. Certain insurers (ones that are
apparently afraid of transparency and a little competition) worked throughout
the process to water down the legislation and tried desperately to kill the
bill in the final hours. Thankfully, other insurers were supportive and engaged
earnestly in negotiating amendments.
CCF’s recent blog and issue brief on Health Insurance Exchanges lays out some of the
primary responsibilities of an Exchange and identifies some opportunities
within the broader federal framework to coordinate among the Exchange and
existing programs, like Medicaid and CHIP.
So, as many of you probably know, the ACA allows states
to make some important choices, not least of which is the decision whether or
not to create a state Exchange in the first place. Given that California is
home to nearly 1.5 million uninsured children, the infamous
39% premium increase proposal and a seemingly
infinite state budget stalemate, we really need a custom-designed Exchange that
will work for California. Alan Weil and
Jon Kingsdale cautioned
the California Legislature that making an Exchange work by 2014 would require a
lot of strategic planning, thoughtful coordination and time.
It’s a good thing the Legislature was listening and has been able to take the
first step forward for California.
Although the authorizing Exchange legislation creates a
governance structure and outlines a framework for the core responsibilities of
the Exchange in California, some of the details of coverage in the Exchange,
such as the benefit design for the child-only insurance products, will be
determined by the governing Exchange Board along with future federal guidance.
That’s why we believed it was very important that the Exchange be run by a qualified
Board with expertise and the authority to negotiate health plan contracts based
on price and value while not having conflicting financial interests. The board also needs representation
from those that recognize the importance of coordinating with existing health
care programs, systems, agencies, and regulators, so that children are
protected and don’t fall through the cracks and lose health coverage
unnecessarily. Along with minimum benefit standards and cost-sharing limits in
the federal law, we believe these factors are critical to ensuring that the
coverage offered in the California Exchange is much more meaningful and more
affordable than coverage today.
In fact, one of the key features is that the five-member
appointed Board is authorized to be an “active purchaser” and will select
health plans to participate in the Exchange through a competitive bidding
process. Because Exchange board members will be required to have experience
with health coverage, administration, and financing, they will be qualified and
savvy in negotiating contracts with health plans based on price and value for
an estimated 8.3 million lives (including
3.8 million small-business owners and employees and their dependents).
The legislation also lays out the overall duties and
responsibilities of the Exchange, many of which are explicitly required in the
federal law (e.g., operating a toll-free telephone hotline and website with
comparative plan information) and some of which just make good sense (e.g.,
authorizing the Exchange board to maximally collaborate with existing health
agencies and applying the same standards for insurers and health plans inside
and outside the Exchange). It also will allow California to be one of the first
states to apply for the federal planning grants that can be used to establish
the Board, promulgate strong consumer protections regulations, and develop a
process to coordinate effectively with existing state health insurance programs
like Medi-Cal (Medicaid) and Healthy Families (California’s CHIP).
Since the federal law builds upon (and protects) Medi-Cal
and Healthy Families, it is critically important that the Exchange coordinate
with existing state and local programs as much as possible. The Children’s
Partnership and the Kaiser Commission on Medicaid and the Uninsured point out
in a recent issue brief that the ACA
requires enrollment systems that are consumer-friendly, coordinated, simplified,
and technology-enabled. But getting into the “nuts and bolts” of creating
enrollment systems that will effectively talk to one another and be easy for
families to use requires thoughtful planning and sufficient lead time. That is
why we continue to recommend that, as the Board develops the enrollment system
for the Exchange and its subsidies, the State buckle down now and start
planning for the streamlining and coordination of the other enrollment systems,
like Medi-Cal and Healthy Families.
The hard work is just beginning! The 100% Campaign and
our partners will continue to advocate (administratively) for better and more
program coordination among the Exchange and other programs – not just at
enrollment but also during renewal (something we didn’t get in the final bill)
and at transitions (included in the bill but could still be strengthened).
Coordination is especially important when families will be split across
programs, for example, when a parent is covered through the Exchange while
their child is enrolled in Healthy Families. We will be laying out detailed
recommendations for the Board on seamless enrollment, renewal and transition
coordination and protections to ensure that only the minimum necessary
information is collected from families to determine eligibility for coverage.
While we pushed to get the state Exchange law as strong
as possible, we recognize that many detailed decisions of the Board will be
determined by federal guidance. That’s why we are sharing our thoughts and
concerns with the Office of Consumer Information and Insurance Oversight about how the Exchange
should coordinate with other programs, and urge them to provide helpful
regulatory guidance on the issue. Like stakeholders in other states, we are
weighing-in as the federal government develops these guidelines, rules, and
regulations, but here in California we are in the unique position of
simultaneously sailing ahead into uncharted waters.
So we can’t wait passively for guidance to be issued and
instead need to focus like a laser on ensuring that we get clear federal
guidance that will address such critical issues such as children’s benefit
design, access to databases for existing eligibility information, and assurances
of a coordinated and streamlined enrollment system.
Furthermore, as part of our effort to ensure that
families know about and actually enroll in available coverage, we continue to
recommend a preferential role for experienced community-based organizations as
navigators. Based on our experience here, health care advocates in other states
should be prepared for attempts to narrow the navigator role to licensed
brokers/agents.
In the end, our State did not develop a perfect bill –
the 100% Campaign and our partners had hoped for greater public/consumer
representation on the Exchange board, stronger conflict-of-interest
prohibitions, more comprehensive coordination requirements, and a preferential
navigator role for experienced local community-based organizations. Yet, we are
pleased to have a strong starting point and hope to make improvements in the
months and years ahead. The new legislation helps structure the incredible
amount of work that will be needed to turn the concept of an “Exchange” into an
actual gateway to affordable coverage for millions of Californian kids and
their families when 2014 rolls around.
Editor’s Note: The views expressed by Guest Bloggers do not necessarily reflect the views of the Center for Children and Families.