ThE council oF sTaTE govErnmEnTs

FEB 2013

CAPITOL rEsEarch
health

States Health Insurance Exchanges Are Shaking Out

The last deadline for states to decide just how much they are going to be involved in operating health insurance exchanges passed on Feb. 15, 2013. That was the last day for governors to send letters to the U.S. Department of Health and Human Services declaring that their state would work in partnership with the federal government. Under a partnership arrangement, states might oversee the selection and management of health plans available in the exchange marketplace. The federal government would have primary responsibility to manage the marketplace website and call centers, to accept applications and to determine eligibility for federal tax subsidies.

Seven states will operate an exchange in partnership with the U.S. Department of Health and Human Services.
Governors in New Hampshire and West Virginia submitted letters Feb. 13 and 15, respectively, declaring their intentions to operate health insurance exchanges in partnership with the federal government. Federal approval is pending. Five other statesArkansas, Delaware, Illinois, Iowa and Michiganpreviously submitted proposals to operate a joint exchange. Federal approval is pending for Iowa and Michigan.

Seventeen states and the District of Columbia are moving forward with plans for state-based exchanges. The federal government has conditionally approved all of them. The states operating their own exchanges are concentrated in the Northeast and West.
California, Colorado, Connecticut, Hawaii, Idaho, Kentucky, Maryland, Massachusetts, Minnesota, Nevada, New Mexico, New York, Oregon, Rhode Island, Utah, Vermont and Washington will operate state exchanges. Massachusetts and Utah already had state health insurance exchanges established by legislation before Congress passed the Affordable Care Act in March 2010. Ten states approved legislation to operate the exchange in the 2011 or 2012 legislative sessions. Three statesKentucky, New York and Rhode Islandestablished the exchanges by executive order.

State legislation to establish state exchanges is still pending in Idaho and Minnesota. Mississippi is the only state whose plan for a state-based exchange failed to garner federal approval because it was submitted by the states insurance commissioner and not endorsed by the governor.

The remaining 26 states have deferred to the federal governments operation of health insurance exchanges.
The states that have opted out of state-based exchanges include many whose governors have been outspoken opponents of the Affordable Care Act since it passed and who joined the federal lawsuit seeking to overturn the law. The states that have opted out of operating exchanges include many in the Midwest and South.

Regardless of the administration of the state health insurance exchanges, two major deadlines established by the Affordable Care Act loom.
The exchanges must begin open enrollment for individuals and small group health insurance policies on Oct. 1, 2013.
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The Council of State Governments

 Policy coverage begins Jan. 1, 2014. Individuals qualify for federal tax subsidies only by purchasing insurance through the exchanges. Those subsidies are intended to make health insurance affordable for those people with incomes between 100 and 400 percent of the federal poverty level. People who apply to state exchanges for insurance and who are income-eligible for Medicaid will be seamlessly enrolled in Medicaid. Cooperation will be required between the exchange, no matter the administrative authority, and states Medicaid programs. In those states that adopt the Affordable Care Act option to expand eligibility to 138 percent of poverty, the exchanges are likely to encounter a number of Medicaid eligible applicants. States decisions on exchanges need not be permanent. Federal guidance provides that states can apply by Nov. 18, 2013, to take more state control in 2015 or by Nov. 18, 2014, to make a change for 2016.

In his letter declaring Illinois intention to partner in the exchange, Gov. Pat Quinn said, I am committed to working with the Illinois General Assembly to pass legislation with governance and financing language that will allow us to operate a state-based exchange beginning in 2015.1 Hospitals and health insurance companies will likely continue to lobby for states to take more control of their exchanges. Both health care sectors have been outspoken proponents of statebased exchanges, advocating that states are in the best position to run exchanges because of their experience with local markets and insurers and their proximity to individual and business purchasers of health insurance.
Debra Miller, CSGs Director of Health Policy | dmiller@csg.org

ReSOuRCeS
October 16, 2012 correspondence from Gov. Pat Quinn to Acting Director Gary Cohen, Centers for Medicare & Medicaid Services. Accessed Feb. 25, 2013 at http://cciio.cms.gov/Archive/Technical-Implementation-Letters/il-exchange-letter.pdf.
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ThE council oF sTaTE govErnmEnTs

Status of State Health Insurance Exchanges Required Under the Affordable Care Act
State
alabama alaska arizona arkansas california colorado connecticut District of columbia Delaware Florida georgia hawaii idaho illinois indiana iowa Kansas Kentucky louisiana maine maryland massachusetts michigan minnesota mississippi missouri montana nebraska nevada new hampshire new Jersey new mexico new York north carolina north Dakota ohio oklahoma oregon Pennsylvania rhode island south carolina south Dakota Tennessee Texas utah vermont virginia Washington West virginia Wisconsin Wyoming

Decision on exchange operation Defer to federal operation Defer to federal operation Defer to federal operation State federal partnership State run State run State run State run State federal partnership Defer to federal operation Defer to federal operation State run State run State federal partnership Defer to federal operation State federal partnership Defer to federal operation State run Defer to federal operation Defer to federal operation State run State run State federal partnership State run Defer to federal operation Defer to federal operation Defer to federal operation Defer to federal operation State run State federal partnership Defer to federal operation State run State run Defer to federal operation Defer to federal operation Defer to federal operation Defer to federal operation State run Defer to federal operation State run Defer to federal operation Defer to federal operation Defer to federal operation Defer to federal operation State run State run Defer to federal operation State run State federal partnership Defer to federal operation Defer to federal operation

Status of Federal Approval, 2/25/2013

State Authority for Exchange

Structure of Exchange

Exchange Name and Website

Conditional approval Conditional approval Conditional approval Conditional approval Conditional approval Conditional approval

Gov. declaration letter (2012) State legislation, SB 900, AB 1602 (2010) State legislation, SB 200 (2011) State legislation, SB 921; Public Act. No 11-53 Legislation/resolution, B19-0002 (2012) Gov. declaration letter (2012)

Quasi-governmental Quasi-governmental Quasi-governmental Quasi-governmental

Covered California Connect for Health Colorado Access Health CT District of Columbia Health Care Exchange

Conditional approval Conditional approval Conditional approval Pending Conditional approval

State legislation, SB 1348 (2011) State legislation pending (2013) Gov. declaration letter (2012) Gov. declaration letter (2012) Executive order, 2012-587

Non-profit

Hawaii Health Connector

Operated by the state

Kentucky Health Benefit Exchange

Conditional approval Conditional approval Pending Conditional approval

State legislation, SB 182 (2011) State legislation, Chapter 58 of Acts 2006 Gov. declaration letter (2013) Legislation pending (2013)

Quasi-governmental Quasi-governmental

Maryland Health Connection Commonwealth Health Insurance Connector Authority Minnesota Health Benefit Exchange

Conditional approval Pending Conditional approval Conditional approval

State legislation, SB 440 (2011) Gov. declaration letter (2013) Gov. declaration letter (2012) Executive order, #42 (2012)

Quasi-governmental

Silver State Health Insurance Exchange

Quasi-governmental Operated by the state

New Mexico Health Exchange Information The New York Health Benefit Exchange

Conditional approval Conditional approval

State legislation, SB 99 (2011) Executive Order, 11-09

Quasi-governmental Operated by the state

Cover Oregon Rhode Island Health Benefit Exchange

Conditional approval Conditional approval Conditional approval Pending

State legislation, HB 188 (2009), HB 133 (2008) (b) State legislation, Public Act No. 48 (2011) State legislation, SB 5445 (2011) Gov. declaration letter (2013)

Operated by the state Operated by the state Quasi-governmental

Avenue H Vermont Health Connect Washington Heatlhplanfinder

Notes: (a)Massachusetts already had an exchange for individuals and small groups, 1 to 50 employees. (b)utah already had an exchange for the small group market, 2 to 50 employees. Sources: CSG research; The Commonwealth Fund http://www.commonwealthfund.org/Maps-and-Data/State-Exchange-Map.aspx; Kaiser State Health Facts, http://www.statehealthfacts.org/comparemaptable.jsp?ind=962&cat=17 ; u.S. Department of Health and Human Services, http://cciio.cms.gov/archive/technical-implementation-letters/index.html 3