Even with King v. Burwell looming large, there have continued to be developments in the health insurance marketplaces at the state and federal level over the past several weeks.
On June 15, 2015, Pennsylvania, Delaware, and Arkansas received conditional approval from the U.S. Department of Health and Human Services (HHS) to establish state-based marketplaces. However, in light of the King v. Burwell decision, Pennsylvania Governor Tom Wolfe has announced that he is going to withdraw their plan to set-up a state-based marketplace, and Delaware will be making a final decision on whether it will continue to pursue a state-based marketplace later this summer. If Arkansas proceeds as planned, it will operate a SHOP exchange beginning in 2016 and will then transition to a state-based marketplace for its individual market in 2017.
While Vermont Health Connect has struggled with its IT platform since its launch in October 2013, the marketplace has successfully reached the first of two critical deadlines that Governor Peter Shumlin had set to ensure that the marketplace will be able to use its IT platform for the 2016 open enrollment period. On June 1, Governor Shumlin announced that several upgrades were successfully implemented. These upgrades included the fix for the change of circumstance functionality, which will now enable customer support staff to integrate changes to enrollees’ accounts in more streamlined and timely manner. The next deadline that the marketplace must meet is October 1, at which time the marketplace must be able to integrate consumer-reported changes into the next month’s invoice, and they must have the technology in place to ensure a smooth open enrollment and renewal process for 2016.
Hawaii Health Connector also released their plan to transition to the federal marketplace. The Health Connector was unable to become financially self-sustaining by January 2015, so they are opting to become a supported state-based marketplace, which will allow them to use the federal IT platform, while continuing to manage outreach and consumer support operations.
At the federal level, HHS continues to release guidance for the health insurance marketplaces. The Centers for Medicare and Medicaid Services issued an FAQ on the use of Section 1311 funds, which are grants that were awarded to states establishing exchanges under the ACA. While the marketplaces were suppose to be self-sustaining by January 1, 2015, this guidance affords states the opportunity to apply for a no-cost extension for continued use of their Section 1311 funds and provides further clarification on how the remaining funds may be used.
On June 17, HHS also announced that they will be increasing the reinsurance rates for insurers offering plans in Marketplaces with high cost enrollees. The reinsurance program was included in the ACA as a means to stabilizing the individual market. The reinsurance program is funded by contributions from all health insurances issuers and third party administrators, and these funds are then distributed to those issuers with a disproportionate number of high-cost enrollees. HHS will now cover 100 percent of eligible individual market plans’ covered claims costs between $45,000 and $250,000 for the 2014 benefit year, which is up from 80 percent.
