Exchange Financing
While there are federal resources available to plan and implement Exchanges, states need to develop strategies to meet the ACA requirement that Exchanges be self-sustaining after they operational.
*Milestone details:
*Full name: Develop a plan for making the Exchange financially self-sustaining by 2015.
*Relevance to the ACA:
The ACA requires that states ensure Exchanges are financially self-sufficient beginning January 1, 2015. Relevant sections include:
§1311 - Eliminates federal funding for Exchanges beginning January 1, 2015. Requires states to make certain that Exchanges are self-sustaining. Allows Exchanges to charge assessments or user fees or employ other methods to generate revenue. Prohibits the Exchange from using administrative or operational funds for giveaways, retreats or excessive compensation.
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District of Columbia
Are any state exchanges looking to develop fee structures which, as well as sustaining the direct operations of the exchange, also attempt to correct healthcare market distortions? If so, what market distortions are they trying to address (e.g. lack of price transparency, undue reliance on hospital care over primary care) and what are their ideas for appropriate fee structures?
District of Columbia
Hi Leo- We are tracking states' financing decisions on our chart here: http://www.statereforum.org/exchange-policy-decisions-chart. Most are utilizing an assessment on carriers- some just on carriers in the exchange, some on all carriers. The factors seem to be based more on per member per month or the amount total premiums rather than a specific carrier trait. If other states have more information, please chime in!
District of Columbia
The Silver State Exchange board approved the recommendations of the Financial Sustainability work group on May 10, 2012. The board decided to charge user fees on standalone dental and vision plans and to allow advertising on the Exchange web portal. See attached list of approved recommendations.
District of Columbia
WV's Office of the Insurance Commissioner released a presentation for the exchange on sustainability. The presentation includes enrollment projections, IT and budget assumptions and the assessments and fees necessary to support the exchange.
Connecticut
Rachel, this appears to be a bad link. Can you repost?
Thank you,
Andrea
District of Columbia
On May 23, 2012, Maryland released an RFP for an exchange financing mechanism. Deliverables include an operating budget, funding option considerations, specific assessments/fees to implement, an analysis of their impact and an implementation plan for the fees/assessments. Responses were due June 8, 2012.
District of Columbia
Check out my new blog post on various options states are considering to finance their exchange: http://www.statereforum.org/weekly-insight/exchange-sustainability-puzzle
California
The Nebraska Department of Insurance has developed a series of financial plans for exchange sustainability and we have recommended financing options to our legislature.
District of Columbia
Hi Maria,
Based on these CCIIO slides,
http://cciio.cms.gov/resources/files/overview_of_exchange_models_and_opt..., it is pretty clear that establishment grant money has to be used before 2015 (see slide 15 in link above).
So, states would need to transition to more of a state model and use up their establishment grant funds by the end of 2014. Doesn't allow much time for states to transition to a "state model" as you call it and use federal funds, but if some months in 2014 would help, you do have that.
Sonya
California
Hi Sonya,
I was wondering if you know of any sources that can help me. My questions are:
1. If the state started out with the partnership model or just go with the federally assisted exchange model at the start, is there funding that would help them take on more the exchange functions over time that allows for the transition to the state model?
2. Could the state write their establishment grant for the above
scenario?
My current resource is the DHHS/CMS/CCIO document: State Exchange Grantee meeting on September 19-20, 2011. Unfortunately, it does not speak to this scenario.
Thanks so much,
Maria
New Jersey
New Jersey currently has 3 introduced pieces of legislation that would implement a Health Insurance Exchange. Each bill has a companion bill in the opposing house. Only one bill, A-1930 has moved out of committee.
District of Columbia
This report provides an update on NY's projects related to the Exchange planning grant. Access the report here: http://www.statereforum.org/sites/default/files/ny_q1_exchange_planning_...
District of Columbia
This presentation to the New Mexico Legislative Finance Committee describes the goals and functions of the Exchange in New Mexico, outlines decisions the state needs to make, and highlights statutory considerations for establishing the state's Exchange.
Access the presentation here:
http://www.statereforum.org/sites/default/files/nm_exchanges.pdf
District of Columbia
This bill, introduced by the House of Representatives, would establish a state health benefits Exchange and requires its governance structure to be in place by July 2012. The bill leaves many future decisions up to the legislature and governor, but does specify that the Exchange shall be governed by a public-private partnership. The Washington State Health Care Authority, in consultation with the legislature’s Joint Select Committee on Health Reform Implementation, would develop a set of options for a variety of implementation decisions. Access the bill here: http://www.statereforum.org/sites/default/files/1740-s.pdf
District of Columbia
This bill establishes a Health Benefits Exchange and creates a health benefit development board. The board is charged with creating a development plan that contains recommendations on goals, functions, governance, regional exchanges, financial sustainability, market impacts, and plan certification. Access the bill here: http://www.statereforum.org/sites/default/files/wa_sb5445.pdf
District of Columbia
This document lists important questions for Exchange planning to be answered in future issue briefs and possibly by an Exchange Development Board. Questions are in such areas as organizational structure, functions and responsibilities, administration, and sustainability. Access the document here: http://www.statereforum.org/sites/default/files/waexchange_keyquestions_...
District of Columbia
These draft policy recommendations on an insurance Exchange were submitted to the OR Health Policy Board. Access the draft recommendations here: http://www.statereforum.org/sites/default/files/or_oha_expolicyrecs_0813...
District of Columbia
Senate Bill 99 was introduced in the Oregon Legislature in 2011. If enacted, it would define the structure and governance of the Exchange, specify the functions of the Exchange, outline who may purchase insurance through the Exchange, and establish a fund to support Exchange operations.
Access the legislation here:
http://www.statereforum.org/sites/default/files/relating_to_oregon_healt...
District of Columbia
HB 4164 would authorize the Exchange to borrow money, require the Exchange to deposit funds in federally insured depositories, remove the requirement that surpluses be held and invested, and repeal the requirement of legislative approval of the Exchange Board's business plan.
District of Columbia
This application outlines MA's plans for enhancing and further developing the state's existing Exchange in order to ensure alignment with the ACA. Access the application here: http://www.statereforum.org/sites/default/files/ma_grant_narrative.pdf
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