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Over the past 12 years, AcademyHealth’s National Health Policy Conference (NHPC) has brought together leaders who can spark debate and inspire health care policymakers and researchers to continue to find solutions to the health care issues facing the nation. Much of this year’s agenda focused on the challenges of implementing the Affordable Care Act (ACA).

Day one of the conference focused on the key issues facing state policy professionals. There is no question that states are under immense pressures from a variety of stakeholders. The opening plenary featured representatives from some of the agencies at play, including a Medicaid director, a health insurance commissioner, and an exchange commissioner, who shared their own experiences as they move forward.

After moderator Robert St. Peter, Executive Director of the Kansas Health Institute, shared an overwhelming list of obstacles in his own state, Kim Belshe of the California Exchange Board followed up by pointing out what most participants already know: implementation at the state level is really hard.

“Transforming policy and practice is not for the faint of heart. It’s not for sissies,” she said.

Each of the panelists focused mostly on issues surrounding exchange implementation, noting that states are in uncharted waters and navigation requires intricate collaborations among stakeholders. But defining and maintaining that collaboration often leads to additional challenges. As Iowa Insurance Commissioner Susan Voss explained, every interest group wants to have a say in the process, but none are willing to concede anything.

The panelists described their states’ approaches to establishing exchanges, noting that, in spite of the difficulties, there are a lot of opportunities for innovation and reforming the system to improve care and bend the cost curve. Commissioner Voss noted that her state has not passed exchange-related legislation.  Although there is a provision in the 2012 legislation related to the implementation of an exchange, it is not expected to pass given that the state is waiting for the Supreme Court ruling on the constitutionality of the law.  Meanwhile the state is conducting research to study the market and how an exchange could be implemented.

Both California and Maryland have quasi-governmental structures and have positive collaboration among the agencies. Iowa’s exchange will likely be part of the Executive Branch.

Kim Belshe noted that one of the many concerns is the amount of carrier flexibility included in the federal guidelines for the Essential Health Benefits. The state will likely select an EHB plan that will include the state mandates, as required in the guidelines, but the mandates may be outdated from an evidence-based perspective.

Maryland Medicaid Director Chuck Milligan described the state’s progress in preparing for 2014. From a Medicaid perspective, the state is working alongside other state agencies, carriers, brokers, local health departments, and employers on ways to innovate the delivery and payment systems to strengthen the primary care and move patient care from the inpatient setting to the primary care setting. He noted several priority areas that Maryland is working on right now:

• Shoring up provider capacity while not cutting payment rates;
• Getting the eligibility system ready for 2014;
• Working with the state’s exchange to ensure continuity of care;
• Working with safety net providers to prepare them to work in a new coverage environment;
• Building a coalition of state agencies and private organizations to support implementation; and
• Building the workforce and addressing scope of practice and licensure issues.

He also highlighted the difficulty in assessing whether building a Basic Health Program makes sense for a state because there are a large number of unknowns, and because there is no deadline for when a state must establish a BHP. His agency is recommending that Maryland delay a determination about the BHP until more federal guidance is released, and more information on rates and the state fiscal risks are available.

Another significant challenge that was raised by the panelists is related to the enrollment and eligibility process. The process for determining an individual's eligibility to enroll in a public program varies for different state agencies.  States need to find a way to integrate some of these processes to ensure a smooth transition for consumers from Medicaid to the commercial market and vice versa.  Depending on the state, that may require a culture change in the agencies involved.  The audience expressed interest in hearing the panelists’ perspectives on how their states are approaching this challenge.

In California, for example, the 58 counties have their own eligibility and enrollment systems for Medicaid. While the state is moving toward the implementation of an online eligibility and enrollment system, the process for determining eligibility for consumer enrollment will change some of the functions that the county staff currently perform. In the case of Maryland, there is tremendous enthusiasm on the part of those working in Medicaid to adapt to a new environment, in spite of tight resources. However, as the eligibility determination process for Medicaid is tied to eligibility for other public programs such as TANF and food stamps, the state is also facing the challenge of trying to change the culture of the social services agency. In Iowa, the Insurance Department and the Medicaid agency have different ways of determining eligibility, so there is a need for a culture shift, but the lack of resources may make that shift more difficult.

Update on Insurance Exchanges

The exchange discussion carried over into one of the NHPC breakout sessions with AcademyHealth Vice President Enrique Martinez-Vidal, who directs the SCI program, leading a panel which highlighted the exchange implementation efforts in New York and Rhode Island, as well as consumer and carrier perspectives on exchanges. As daunting as the exchange work is for states right now, it is also an extraordinary opportunity to be innovative; the panelists agreed, specifically citing their own work in engaging consumers and carriers.

Blue Cross Blue Shield Association’s Kim Holland noted some of the challenges of exchange implementation including:

• The constitutional challenges to ACA;
• The need for final regulations on the  ACA provisions;
• State budget constraints; and
• A somewhat limited technological support capacity involving only six to eight information technology (IT) providers that are able to get the system up and running.

She also highlighted opportunities to increase transparency and uniformity, increase access, level the playing field, and improve care.  Ms. Holland stressed the importance of transparency and consumer engagement to the success of exchanges and how BCBS is focusing on that.

Christine Barber from Community Catalyst, a national nonprofit advocacy organization, highlighted some of the issues that consumers are looking at exchanges to provide.  Among them are:

• High quality health plan options;
• Easy to understand comparisons; and
• Assistance in choosing a plan.

She also emphasized that among the most important issues to consumers is addressing conflict of interest through strong rules as well as guarding against adverse selection.  Ms. Barber noted that consumer advocates are involved at both national and state level in states such as Ohio, Kansas, Maryland, and Oregon, where their involvement can be a great resource in exchange implementation efforts.

Danielle Holahan, the project director for exchange planning in New York—a state that has not passed exchange legislation yet—provided an overview covering the timeline for proposed legislation enactment and the exchange planning work the state is currently undertaking.  Among the exchange activities the state is pursuing are:

• Simulation modeling;
• A business operations work plan;
• A five-year exchange budget and self-sustainability analysis; and
• Exchange policy studies that are looking into insurance market issues, the basic health program option, the role of navigators, integration of public programs, and health disparities.

Ms. Holahan also touched on some of the results of an analysis by the Urban Institute, which estimated that implementing the Affordable Care Act in New York would result in:

• A reduction of 1 million people in the number of uninsured;
• Exchange enrollment of 1.1 million people;
• Federal subsidies to individuals and small business of $2.6 billion; and
• A decrease in premiums in both the small group and the individual markets as a result of the federal reform.

The analysis also indicated that the implementation of a Basic Health Program (BHP) would reduce exchange enrollment from 1.1 million to 820,000.  Although the BHP option has the potential to increase affordability of coverage, improve continuity of coverage, and shield enrollees from subsidy clawback, it is difficult for the state to make a decision until the U.S. Department of Health and Human Services (HHS) provides further guidance.

Lieutenant Governor Elizabeth Roberts of Rhode Island shared exchange developments in that state noting that the Executive Order used to establish the exchange is anchored in current law and the lawsuit against it is not stopping the exchange work. Some of the questions the state is still trying to address are how to determine the exchange value-add for small employers and whether to include public employees in the exchange. The state has put out a request for information to explore the implementation of the Small Business Health Options Program (SHOP) and has received responses from 10 vendors so far. Rhode Island has also engaged both the small group and the large group employers in the process.