HIEs Struggle to Catch On (Part 1)

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Today, Friday, Feb. 15, 2013, is the day: the day when states make a final decision on whether they’re going to set up their own health-insurance exchange or let the government establish one for them.

In the face of this deadline, Kelly Kennedy at USA Today reports that “there has been one last-minute surprise and one skin-of-the-teeth agreement.”

First, New Hampshire has decided to partner on its state’s HIE with the federal government since the state legislature, dominated by the GOP, has made it illegal for the Democratic governor to create a state-run HIE.

Jetting to Illinois, a conditional approval was announced by the governor on Wednesday allowing the state to partner with the feds on its HIE, although the governor sounded like he had a long road ahead of him in convincing his constituents that this was the correct route to go.

“We are going to be working very hard between now and October 1 to educate the people of our state about the healthcare-coverage options they will have through the marketplace, thanks to President Obama’s leadership,” Governor Pat Quinn said.

This brings the total number of states “conditionally approved…to set up their own exchange or partner with the federal government in an exchange” to 20, along with the District of Columbia. Of course, people need to enroll by October for plans to kick in starting January 2014.

But 20 states total… If I recall my elementary-school education correctly, that leaves 32 states out of the mix, meaning that most are either on the fence or playing politics or outright rejecting the idea of HIEs.

Chas Roades, chief research officer for consultant The Advisory Board Company, told Kennedy, “My guess is we probably know what we’re going to know about the state’s decisions. I think it’s unlikely at this point that they’d raise their hands and say, ‘We’re going to participate.’”

Illinois and New Hampshire came in just under the wire. The government believes they’ll be ready in eight months, but it’s going to be a crunch period. The process to creating exchanges is complicated. Roades said it takes “a lot of preliminary work” and “those who don’t create their own exchanges will miss the chance to ‘advance some reforms’ on the state level,” such as cost-savings measures.

However, Roades was neutral as to whether a state exchange or a federal exchange really mattered for consumers, since all will have access to one, as health-advisory firm Avalere CEO Dan Mendelson pointed out.

He told Kennedy, “The big choice for states was whether to take federal money to create the exchanges authorized by the 2010 healthcare law or reject the exchanges on political grounds.”

Those who are rejecting on political grounds are probably doing so because they’re skeptical as to how much control they’ll actually have over the exchanges. Many who oppose the exchanges feel they’ll simply be pawns of the government.

“The biggest loss” of opting out, Kennedy writes, “could be lack of coordination as people move back and forth between state Medicaid programs and the federal exchange, rather than a state exchange.”

This is a complicated issue, and as with everything involving healthcare reform, emotions are hot about it. Some conservatives see the defeat of exchanges as being key to toppling the success of healthcare reform. Just last week, I heard talk-show host Glenn Beck, as part of a paid promotional push by conservative-activist group FreedomWorks, urging listeners to work against HIEs in their states.

On Monday, we’re going to spotlight an article that delves deeper into the intricacies of HIEs. What does it take for a state to set up an exchange? And just how difficult will it be for the government to establish an exchange in 32 states before October?

-by Pete Fernbaugh

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