Building an Integrated State Health Insurance Exchange
How Can States Build an Exchange
Two vendors of health insurance exchange systems today demonstrated to a Kansas planning group how things might work once an exchange is up and running here.
The presentations were organized by the Kansas Insurance Department, which has pulled together dozens of people from state government, foundations and the insurance and health industries to lay the groundwork for an exchange that must be operational by January 2014 and certified a year before that in order to meet requirements of the federal health reform law.
The Affordable Care Act requires each state have one or more exchanges, which are intended to be one-stop, online shopping places for uninsured Kansans wanting to enroll in or buy health insurance. The federal government will step in to operate exchanges in states that don't develop their own.
Keeping on track
The exchanges also will serve Medicaid clients, who become a greatly expanded pool in 2014 when the reform law will make all Kansas adults with annual earnings of about $14,500 or less eligible for the program. Kansas Medicaid currently has some of the most restrictive eligibility standards in the nation, which essentially closes it to all but the poor who are pregnant, disabled or frail elderly.
The Kansas Health Policy Authority is in charge of upgrading the state's Medicaid enrollment system and assuring it will be compatible with the new exchange. It has received a $40 million federal grant to do that.
"It will take everything we can do to keep on track and on time," with that portion of the insurance exchange project, said Andy Allison, executive director of the agency, which is slated by Gov. Sam Brownback to merge with the Kansas Department of Health and Environment by July 1.
The exchanges are expected to handle enrollments for Medicaid and for private individual or small group insurance plans. People who qualify for federal subsidies or health insurance tax credits must buy through an exchange to get those benefits, according to the reform law.
Kansas was one of seven states announced last month to receive a federal "innovation" grant to help develop an exchange. Kansas will get $31.5 million, funneled through the insurance department, to underwrite that process.
Getinsured.com founder and Chief Executive Chini Krishnan showed Insurance Commissioner Sandy Praeger and dozens of others working group members how his company's exchange Website works in a presentation that took about 45 minutes.
Getinsured was started in 2005. According to Krishnan, the company wants to make shopping for health care services as easy as buying airline tickets from online services such as Orbitz and Travelocity, arming consumers with near-instant comparisons of various health plan features and prices.
Ron Goldstein, who was named chief executive of Choice Administrators today, did a similar presentation describing his company's product.
Choice Administrators, which has operated in California since 1996, is a subsidiary of The Word & Brown Companies.
Goldstein essentially described a turn-key operation in which his company would contract with the state to launch and operate the exchange.
"I don't think it's all as daunting as you all may think," he said, citing the company's long experience. "Ladies and gentlemen, you can buy a system, but can you buy the experience? There are people like us who can guide you through this experience."
Goldstein said the harder part of launching a Kansas exchange would be modernizing the state's Medicaid eligibility system to "seamlessly integrate," with the exchange.
Ease of use
Both vendors said it was important to develop a system that was "seamless," so that consumers, regardless which plan or program they might want or be eligible for, would encounter the same online interface and assistance when they went shopping for health insurance.
Other vendors are scheduled for demonstrations before the group on March 31.
It was the second meeting of the full insurance department planning group. Separate working groups that will ultimately report back to the full group have been meeting more frequently.
Most who attended said it was too soon to form any but general conclusions about how a Kansas exchange should look and operate.
"It needs to be easy to use for consumers," said Matt All, leader of a key working group and general counsel at Blue Cross Blue Shield of Kansas, the state's largest private health insurer. "It needs to allow for competition between (insurance) carriers and it needs to add as little cost to the system as possible."