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An Exchange on the Exchange

A central, if not the most significant, component of the federal health health reform law is the requirement that states create Health Insurance Exchanges that must be launched by January 1, 2014 and self-sustaining by January 1, 2015. The law provides assistance in the form of planning grants so states may begin setting up and implementing their Exchanges.

California is already on it’s way. On Tuesday, June 2, two bills that call for the establishment of a statewide Exchange, AB1602 (Perez) and SB900 (Alquist/Steinberg), passed out their respective houses of origin.

Over the coming weeks, ITUP plans to have a dynamic conversation — here on the blog as well as in-person in Sacramento and across the state — on the many policy questions that will need to be addressed and answered as the state begins to build the infrastructure for the Exchange. We hope you join the discussion.

As a start, here are just a few questions that we’ll be addressing:

Structure & Governance
• Should the state establish the Exchange or leave its creation to the federal government and relieve the state of a formidable administrative task?
• Should ours be a statewide Exchange or should it be a regional Exchange (including our Region Nine neighbors: Arizona, Hawaii, Nevada, American Samoa, Federated States of Micronesia, Guam, Marshall Islands, Republic of Palau, and Commonwealth of the Northern Mariana Islands)?
• Should the Exchange be a public agency governed by a state board (and therefore subject to a high degree of legislative control as well as direct oversight and accountability, but subject to the state budget process that might make the entity less flexible) or by a public–private partnership model (with greater flexibility and ability to respond quickly to changes in the insurance marketplace but, conversely, less legislative control)?
• Should the Exchange be governed by a board? If so, how many members should be on it and how should they be selected? For what length terms should they serve? Are there particular health care sectors that should always be represented?
• How will Medi-Cal, Healthy Families and other public programs relate to and interact with the Exchange?

• Should the Exchange be a “connector” (connecting eligible persons to coverage via an Internet portal that provides standardized information on qualified plans and prices) or a “purchaser” of coverage (negotiating the best rates for exchange participants and enrolling individuals in plans, as well as administering subsidies, collecting and paying premiums, etc)?
• Should small businesses participate in the Exchange? If so, should there be on large pool or a separate pool for small businesses?
• Is there a place for a “public option” within the Exchange? Local initiatives and county-organized health systems already exist and are licensed as health services plans; could they be quasi-public options in the Exchange?

Outreach and Education
• How do we ensure maximum participation for those eligible for coverage through the Exchange?
• What is the roll for health insurance brokers and CAAs (Certified Application Assistors) in the Exchange?

Here are additional sources of information on the Exchange:
ITUP’s initial analysis and recommendations, April 19, 2010
Legislative Analysts Office report, May 13, 2010
Congressional Research Service report, April 15, 2010
Kaiser Family Foundation brief, April, 28, 2010

Please join the conversation! As we begin to address each of these questions and more, you are encouraged to speak up, leave a comment, and make your voice heard.