Health Insurance Marketplace

As the Oct. 1 deadline nears for states to establish “health insurance exchanges,” many states are considering joining forces to offer the lowest-cost, highest-quality marketplaces. Photo by U.S. Department of Health and Human Services.

You’ve probably heard about the Health Insurance Marketplace, the new model for regulating health care that will take effect in every U.S. state by Oct. 1. All 50 states plus the District of Columbia will have their own marketplaces, or “exchanges,” in which Americans and small businesses will shop for customized health coverage.

With the Oct. 1 deadline fast approaching, state governments are under pressure to finalize plans that will best suit their public’s health needs — and are looking to each other for guidance.

In a webinar hosted last week by the National Academy for State Health Policy, government officials from West Virginia, Colorado and Kentucky discussed the need for state partnerships.

As the Health Insurance Marketplace prepares to launch, state exchange decision-makers are sharing ideas with each other to implement the most cost-effective, quality exchanges for their populations. Some states are pursing “regional partnership exchanges” in which several states share one system of health insurance. According to language written into the Affordable Care Act, “an Exchange may operate in more than one state if each state in which such Exchange operates permits such an operation; and the Secretary approves such regional or interstate Exchange.”

“It’s a two heads are better than one concept,” NASHP’s Christina Miller said. “Many states are in a bit of a sprint to the finish line to launch exchanges by Oct. 1. There might be short- and long-term benefits of coordinated efforts.”

Health risks and needs vary across states, as does each state’s desire to pursue partnerships.  In West Virginia, “all options are on the table to serve the best interests of our citizens,” according to Jeremiah Sample of the state Department of Health and Human Services. Conversely, Kentucky is not pursuing formal partnerships because “you exponentially multiply the problems that might exist if sharing costs or information,” said William Nold of the Kentucky Health Benefit Exchange.

Sharing information and official partnerships become more frequent among states in the coming years, however. Many states will use a federally facilitated marketplace in 2014 — but all states must be self-sustainable, or requiring no state subsidy, by Jan., 2015. One exchange program, Connect for Health Colorado, already has multi-year technology — including a provider directory and an “out-of-pocket” calculator — and hopes to lower future costs in running its own exchange by trading IT solutions with other states.

“Cost and quality” will determine if states decide to implement interstate exchanges in the future, Sample said.

“Collaboration sounds great, but it’s not easy,” Sample said. “States like customization in Medicaid and [Supplemental Nutrition Assistance Programs]. Are states willing to give up some customized functionality in order to have a more efficient product to administer? But the benefit potential of joint exchanges really demands a national look. Across the country, the possibility is there for a more efficient and effective [health insurance] system.”