Health insurance exchanges: Focus on state-based exchanges

This third article in our series on health insurance exchanges takes a more in-depth look at exchanges operated by the states.

In 2014, consumers and small businesses will be able to access health care coverage offered by qualified health plans (QHPs) through the state-based health insurance marketplaces established by the Affordable Care Act (ACA). The marketplaces will offer “one-stop shopping” through an online portal where consumers will be able to compare plans, check eligibility for tax credits and for different programs available through the exchange (for example, Medicaid and the Children’s Health Insurance Program), and enroll for coverage.

About one-third of states have opted to establish and operate their own marketplaces. These seventeen jurisdictions have been conditionally approved by the Department of Health and Human Services (HHS) to establish state-based health insurance exchanges – California, Colorado, Connecticut, District of Columbia, Hawaii, Idaho, Kentucky, Maryland, Massachusetts, Minnesota, Nevada, New Mexico, New York, Oregon, Rhode Island, Utah, Vermont and Washington.1 More detailed information about each state’s health insurance exchange is available on the CMS website.

In state-based health insurance exchanges, the states will operate all of the exchange activities. This allows those states more flexibility in how to implement the consumer protection and quality standards for health plans sold in the exchanges. As a result, there will be variation among the state-based exchanges regarding standardized health plan designs, provider network adequacy, accuracy of provider directories, sufficiency of essential community providers, marketing standards for qualified health plans, selection of QHPs to participate in the exchange, and reporting of quality measures.

The process and timeline for certifying QHPs to offer coverage through the exchange will also vary by state. However, most states will have completed the certification process for QHPs by the end of July so information about the carriers and health plan offerings will be available (at link above to the CMS website) before the end of the summer.

In addition, states may mandate that certain services be covered in addition to those 10 categories defined by the ACA as “Essential Health Benefits.”2 For example, the state-based exchange may have more detailed information about specific care, treatment, or services required by state law that a QHP must cover.

Examples of possible additional state-mandated benefits may include applied behavioral therapy, mastectomy-related services, or traumatic brain injury. This will foster greater variation among the kind of coverage offered in each state. The Center for Consumer Information & Insurance Oversight provides more information about state-specific benefits.

At this time, most states are actively working with local stakeholders to design and implement health insurance exchanges. Members can contact their state psychological associations to find out how the association is involved as a local stakeholder in the HIE implementation process.

As previously highlighted in the May 30 PracticeUpdate article on federally facilitated and state partnership exchanges, there are issues that individual psychologists ought to consider prior to the exchanges becoming operational in October 2013:

  • Check your state’s health insurance exchange website for information as to what insurance companies are applying for certification as QHPs to participate in the exchange. If you serve on insurance panels, you will want to be aware if any of the companies for which you are an in-network provider will participate in the exchange.
  • If you are an in-network provider, review your provider contract so that you are familiar with the notification procedures and contract assignment provisions. You may find that the provider network will be used for certain QHPs and will serve new enrollees beginning this fall.
  • Familiarize yourself with the federally-mandated essential health benefits as well as any state-mandated benefits so that you as a provider know which of the services and treatments that you offer must be covered by the QHPs.
  • Qualified health plans must maintain accurate provider directories and must indicate which providers within their network(s) are not currently accepting new patients. So be sure to review your provider directory information for accuracy.

For more information, contact the Legal & Regulatory Affairs office in the Practice Directorate by email or by phone at (202) 336-5886.

1Utah received conditional approval for a state-based exchange but its governor subsequently proposed that the state operate an exchange for small businesses while the individual exchange will be managed by the federal government.
2Essential Health Benefits are defined as ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.