Under the Affordable Care Act (ACA), each state must implement a health insurance exchange by 2013. If not, the federal government will create one for them.
Exchanges are to provide affordable health insurance through online marketplaces where individuals and small businesses can compare and purchase a certified plan that best meets their needs. The exchanges also will coordinate with other state programs, such as Medicaid and the Children’s Health Insurance Program (CHIP).
|By 2014, states must decide on one of these health insurance exchange options:
- Completely state-run
- Fully federally-run
- Federal/state partnership
By executive order, our state is exploring creation of a health insurance exchange. Indiana was one of three states to receive a $6.9 million federal planning grant to help support exchange creation.
To facilitate discussion on what Indiana’s exchange should look like, the ISMA has joined 40 other organizations on the Indiana Healthcare Implementation Work Group. An information-gathering body, the group aims to offer state leaders exchange design recommendations.
“The ISMA’s participation in the work group puts physicians at the discussion table,” explained Mike Rinebold, director of the ISMA Government Relations Department. “We are monitoring issues that affect patients and physicians.”
Currently, Utah and Massachusetts have health insurance exchanges in place.
The Utah exchange acts as a clearinghouse for all health insurers in the state from which patients can choose. In Massachusetts, the state evaluates and selects health insurers for its exchange.
During the AMA semi-annual meeting last month, delegates voted to support the open marketplace model for health insurance exchanges to increase competition and maximize patient choice. The AMA new policy also encourages:
- Involvement of state medical associations in the legislative and regulatory processes of health exchanges
- Inclusion of actively practicing physicians and patients in health insurance exchange governing structures
- Development of systems that allow for real-time patient eligibility information
“If they are developed well, health insurance exchanges will provide a new way for millions of Americans to obtain health care coverage from private insurers,” said AMA Board Member Barbara McAneny, M.D. “Physicians and patients should be involved in setting up and governing these bodies to ensure they best meet the health care needs of residents in each state.”
What lies ahead
Next summer, the U.S. Supreme Court is expected to rule on the constitutionality of the ACA’s individual mandate, including health insurance exchanges. Many states are choosing to wait on that ruling.
“Right now, Indiana is conducting due diligence to gather as much information as possible about exchanges,” explained Rinebold. “The question is: Will they be sustainable?”
Rinebold noted that federal funding for exchanges will run out by 2014, which will shift the financial burden onto states. Furthermore, any savings on health care costs would affect only premiums, not administrative expenses. Already, the Utah and Massachusetts exchanges struggle to be cost effective.
The Healthcare Implementation Work Group is encouraging discussion in the state by educating legislators and the public about the benefits of a state-based health insurance exchange. Find the group’s guiding principles for an exchange on the ISMA website.
Read more about the AMA’s comments on ACA regulations on the AMA website.
Learn more about the ACA and Indiana’s response to federal correspondence at in.gov.