On December 14, 2018, a district judge in Texas ruled the Affordable Care Act (ACA) unconstitutional (see this NYTimes news article for a basic overview). While the ruling has no immediate impact on the law, the decision will certainly be appealed and will take many months to play out. That fact alone will cause additional uncertainty as to the future of the ACA exchanges, especially for states that use the Federally-Facilitated Marketplace (FFM) to support the state’s insured population. As a result of this uncertainty, we foresee even less investment into healthcare.gov going forward. If your state has been considering setting up its own State-Based Marketplace (SBM), there’s never been a better time to do so and take control of your health insurance market.
Beyond the uncertainty of the future of healthcare.gov, moving to a State-Based Marketplace (SBM) provides a significant opportunity to save money on healthcare in your state. As demonstrated in a March study by the Commonwealth Fund, SBM States outperform their FFM counterparts in many areas. One area of efficiency was in premiums — showing reductions of up to 20 percent.
Our own research shows that, beyond impacting premiums, states currently running on the FFM can – depending on a number of enrollees – save tens of millions of dollars simply by transitioning to a state-based marketplace, run and operated locally with private-sector support — as 12 states and D.C. already have done.
The current administration in general and Centers for Medicare & Medicaid Services (CMS) in particular intend for states to take control of their own affairs, including managing their health insurance exchanges. This is clear by the latest updates to the 1332 waiver guidance.
Other advantages in a transition to a State-Based Marketplace, as well as policy ideas and regulations (both current and future) to support a transition, include:
- Greater Local Control
State-Based Marketplace policy is entirely at the discretion of the local exchange entity, and can best reflect the unique requirements of the State. The exchange can set the Open Enrollment Period (OEP) length and work with the insurance commissioner on the plan approval/management, can control marketing, outreach, navigator budget, and strategy, and work with carriers to provide greater coverage and lower premiums. The savings from moving to State-Based Marketplace can be broadly deployed from addressing inequities in state’s population health to funding a reinsurance pool. - Stronger Consumer Protection and Greater Choice
Increased options for consumers can all be now managed locally with platform tools to assist consumers in making educated choices, using sophisticated decision support tools. New consumer options may include streamlined eligibility determination, new products such as Medicaid buy-in compared to ACA QHP products, the introduction of an online Medicaid and QHP Enrollment Broker, introducing Medicare age-in solutions to Medicaid and QHP populations, true short-term/catastrophic and association health plans, to name just a few. - State Individual Mandate
By introducing a state individual mandate, similar to a widely used car insurance mandate (i.e. state requiring people to buy insurance), the state will gain control of enforcement of both the enrollment requirement and associated incentives. Rolling fines into premiums and enrollment are attractive incentives for increasing and diversifying risk enrollment pools, leading to lower premiums in the state. - Outreach and Data
Collecting and analyzing data, reporting on key details of enrollment and post-enrollment, and broker engagement is critical for marketing and management of a healthy healthcare and health insurance ecosystem. The exchange, governor’s office, legislature, and stakeholders in the ecosystem will benefit from having data, which is currently unavailable from HealthCare.gov/FFM.
Nevada’s transition off of the FFM is anticipated to save the state $6 million annually, while Idaho has been able to operate at a lower fee than the FFM carrier premium fee of 3.5 percent – saving the state approximately $22 million since the transition. These numbers are achievable by your state, too. We can show you just how simple and quick the transition can be. Let’s talk. Email our public policy team at hello@getinsured.com to begin the conversation.
