Three Keys to Setting Up Strong Health Insurance Exchanges – Say Ahhh! A Children’s Health Policy Blog

Even as the media is focusing on the high-profile debate
over court challenges to the Affordable Care Act and efforts to repeal and defund it in the House of Representatives, many states continue to move
steadily forward with implementation. 
California was a leader in enacting legislation to create its exchange
last year, and many other states will consider exchange legislation this
year.  The federal government has
offered to states another round of exchange planning and establishment grants and the funding announcement envisions that states will have the legal
authority to operate exchanges in 2011.   So many Say Ahhh! readers will be working during the
current session of their state legislatures to support the establishment of
exchanges that provide quality coverage for kids and families.

Where should those who care about kids and families focus
their exchange efforts?  There are
a variety of exchange-focused resources available.  Be sure to check out the National Academy of Social
Insurance toolkit on state exchange legislation – it’s
based on the model legislation from the National Association of Insurance
Commissioners, but adds a number of alternatives that states may want to
choose.  There are also exchange
briefs from us here at Georgetown CCF as well as Community Catalyst,  Families USA  and the Center on Budget and Policy Priorities. 

But for the time-crunched (and who isn’t?), it’s
important to gauge which decisions will be made this year and which can be put
off until later.  The state exchange
legislation we’ve seen so far focuses mostly on establishing the legal
structure, governance, and overall goals of exchanges.  The details will come later and they
will depend on the formative decisions made this year.  Three key provisions to look for in
early exchange legislation include:

  • Strong representation for families in the governance
    .  A wide variety of
    stakeholders will be competing for influence over each state’s exchange:  small businesses, insurers, insurance
    commissioners, providers, the state’s administrative and political leadership,
    and others.  Consumer
    representation should be strong enough to hold their own with these interests,
    through direct seats on any governing or advisory board.  And those who represent consumers
    should protect the interests of all consumers–including the children who will
    be covered in the exchanges but who won’t be able to make purchasing decisions
    for themselves. Moreover, the legislation should have strong provisions to
    protect against conflict of interest on the exchange board.
  • Strong connections between the exchange and the state
    Medicaid and CHIP agency
    Exchanges will need to screen applicants for Medicaid and CHIP and
    enroll them when eligible.  And
    exchanges will provide coverage to many family members of those on CHIP and
    Medicaid and to individuals leaving public coverage.  Therefore, exchange legislation should ensure close
    collaboration–if the exchange is not operated by the Medicaid agency, the law
    should direct it to enter into agreements with the state’s Medicaid and CHIP
    agencies so that these important functions are carried out seamlessly from the
  • Make necessary insurance market adjustments outside the
    .  Exchanges won’t work for
    kids and families if they only attract enrollees with high health needs,
    sending costs out of reach.  The
    exchange law should direct the state’s insurance regulator to take steps to
    minimize adverse selection in the exchange.  This will require aligning health insurance regulations
    outside of the exchange with those inside the exchange and more. 

Are these three considerations the only ones that kids
advocates should focus on this year? 
Not necessarily, but three seems like a manageable number for a blog
post – see the reports mentioned above for more issues to watch out for, or leave
your own in the comment section below. 
Health insurance exchanges represent a new and complex idea for many of
us, so as exchange legislation comes up in legislatures across the country,
we’d love to hear from readers on promising ideas for kids and families as well
as potential trouble spots.

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