In today’s Health on the Hill segment, Christine Vestal of Stateline joins KHN’s Mary Agnes Carey and Jackie Judd to assess the progress – or lack thereof – states are making setting up insurance exchanges. They’re required by the health law and they must be set up by 2014, to provide a online marketplace for people to buy insurance.
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JACKIE JUDD: Good day. This is Health on the Hill. I am Jackie Judd. The more than year old health care reform law faces legal and political challenges that may yet change what the law requires of different players in the system. Even so, states are moving forward to meet the current requirement that exchanges - marketplaces where certain consumers and small businesses can shop for health insurance - are in operation by the beginning of 2014.
Christine Vestal, a reporter for Stateline, which is a project of the Pew Center for the States, has covered this story extensively. She, along with Mary Agnes Carey of Kaiser Health News, join me today to discus what has been happening. Welcome to you both, especially you Chris, our first time visitor. Can you give us an overview of what the level of activity has been in the states regarding the establishment of the exchanges?
CHRISTINE VESTAL: More than half the states have been grappling with this and only seven have actually managed to pass laws. Two states have executive orders, so they can also get started. These are Republican governors that decided to move forward. And, about 15 states are still dealing with it and we may see as these sessions end, a few more laws coming out.
JACKIE JUDD: There have been a small handful of what I would call aggressive states. California, for example, was the first to establish an exchange. West Virginia followed. Maryland. What are their exchanges beginning to look like?
CHRISTINE VESTAL: Well, what they are doing is setting up the way they are going to govern them, whether they are an agency or an independent commission. They are also deciding on the structure of the exchange, whether it will be one for individuals and another for small businesses. And they are also looking at how they want to regulate the insurance companies. Do they want to bid and get the lowest price and put that on the exchange or let the insurance companies price their policies as they will?
JACKIE JUDD: One of the pieces of the exchange that won’t be set in place, what are the essential package of benefits, that is the minimum level of services that the insurance companies will have to offer, and that piece will come from the federal government, the Department of Health and Human Services. Mary Agnes, what is the status of that? Where are the talks and the negotiations?
MARY AGNES CAREY: Since January, an Institute of Medicine panel has been convened to look at that testimony to provide guidance to the government. Also, the Department of Labor interviewed something like 4,000 employers to determine what are they offering and what are the similarities and differences there.
There is sort of attention around this discussion because if the essential benefits package is too generous, too expensive, the subsidies of course that the government offers in the exchanges will increase and you could have individuals looking at it and saying, “I can’t afford that; it is cheaper to pay the penalty for not having coverage to individual mandate.” So, it is kind of a very delicate balancing act, exactly how to strike the right balance.
JACKIE JUDD: Well, the whole thing is really a delicate balancing act, right?
MARY AGNES CAREY: Exactly, yes!
JACKIE JUDD: And in some of the states, which have been slow to move or resistant to move, how do you balance the politics versus the logistics of doing this?
CHRISTINE VESTAL: Well, first of all, the logistics are a real issue because a lot of states have smaller staffs than they used to and this is a huge project. So just gearing up and getting the information together that the lawmakers need is taking some time. But the politics are also an issue because more than half the states are suing the federal government.
They want to get the law repealed and so you have Republicans in those states saying why are we implementing a law that may go away? But, you have other Republicans saying well, because it is the law and if we don’t do it, the federal government will come in and do it for us, and we don’t what that.
Republicans and Democrats generally like the idea of an exchange. It makes sense to help consumers and to stimulate competition among the insurance companies.
JACKIE JUDD: It is an interesting question of timing because of the lawsuit that you mentioned. The Supreme Court, if it takes the case, may not take it until 2012, which then puts us possibly into 2013. Have you see many more complicated projects like this covering health care reform, Mary Agnes, over all these years?
MARY AGNES CAREY: Well, no I haven’t, but I have learned the hard way that health care is never too simple or too easy or too straight forward. This is a classic example of that rule.
JACKIE JUDD: Okay, well, thank you both so much, Chris Vestal of Stateline. Mary Agnes Carey, as always, of Kaiser Health News.