By Sabrina Corlette, Rachel Swindle, and Rachel Schwab
The Reasonably priced Care Act (ACA) established medical insurance Marketplaces (or “Exchanges”) to facilitate enrollment in complete and reasonably priced medical insurance plans. The ACA envisioned that the Marketplaces could be primarily state-run, with the federal authorities stepping in as a backstop. In follow, due partially to deep anti-ACA sentiment amongst some state policymakers, when the Marketplaces launched in 2013, solely 17 states and the District of Columbia had been state-run Marketplaces with their very own IT eligibility and enrollment platforms. The federal authorities needed to run the Marketplaces within the remaining 33 states, and because the inaugural yr, some state-run Marketplaces have used the federal enrollment platform HealthCare.gov. Over the course of the primary decade of the ACA’s Marketplaces, the variety of state-based Marketplaces (SBM) has fluctuated from 17 within the first yr, to a low of 12 in plan yr 2017, to the present 18 in 2023. (See Exhibit). States transitioning to a full SBM lately sought management partially as a result of the Trump administration’s efforts to roll again the ACA led to instability of their insurance coverage markets and a rise within the numbers of uninsured. The flexibility to adapt an SBM to state circumstances and priorities has enabled these states to construct on the ACA and broaden enrollment.
Extra just lately, a number of extra states have indicated they could undertake a transition to an SBM, together with Georgia and Texas, the place opposition to the ACA stays a bedrock precept for a lot of lawmakers. With general Market enrollment at an all-time excessive, and tens of millions extra folks poised to transition from Medicaid to business insurance coverage, the function of the ACA’s Marketplaces as a well being protection security internet has by no means been extra pivotal. But federal guidelines implementing the ACA impose few requirements for launching and sustaining a Market that adequately serves customers and builds on enrollment features. Given states’ curiosity in taking up operation of the Marketplaces, it could be time for the federal authorities to ascertain a stronger federal ground.
The Want For Minimal Requirements Earlier than Working a State-based Market
To this point, SBMs have been main the best way in direction of better insurance coverage protection and an improved shopper expertise. They’re investing closely in advertising, outreach, and enrollment help, coordinating with Medicaid companies to scale back churn, elevating the bar on high quality for taking part insurers, and performing to enhance the buyer buying expertise. Many SBMs have carried out modern methods to achieve the remaining uninsured, corresponding to state-funded subsidies, protection for undocumented residents, and “straightforward” or automated enrollment.
Within the final two years, the federally facilitated Market (FFM) has been catching up. The FFM has dramatically elevated funding for advertising and enrollment help. Federal officers have additionally carried out new insurance policies to lengthen enrollment home windows, simplify plan selections, broaden eligibility for tax credit (by fixing the “household glitch”), and scale back the amount of paperwork for customers to take away enrollment obstacles. These efforts are paying off, with record-breaking FFM enrollment in 2023.
Any state looking for to transition from HealthCare.gov to SBM standing immediately thus has the next threat of backsliding on these protection features. The ACA specified that state Marketplaces predating regulation’s enactment, corresponding to Massachusetts’s Market, had been presumed to qualify underneath the brand new federal requirements for SBMs provided that they continued to cowl roughly the identical portion of the inhabitants projected to be lined nationally underneath the ACA. The idea was that SBMs must construct on, not detract from, the ACA’s protection targets.
But not all state leaders looking for to launch an SBM share a dedication to common insurance coverage protection. Certainly, 10 states, together with Georgia and Texas, haven’t taken up the choice to broaden Medicaid protection to their poorest residents. And though states are usually the primary line of enforcement of the ACA’s market reforms, Texas has declined to play this function, and as a substitute depends on federal enforcement. Furthermore, Georgia has beforehand sought permission to bypass a number of key Market necessities, together with the centralized enrollment web site. As an alternative, the state proposed to ship customers to non-public insurers and brokers, each of which have monetary incentives to restrict significant plan comparability.
Market Roles and Tasks
Underneath present federal guidelines, SBMs have a protracted listing of crucial duties, however are topic to comparatively minimal federal requirements for a way they carry out these duties.
States can set up a Market as a governmental company or non-profit entity. Marketplaces run by unbiased state companies and non-profit entities should have a governing board sure by a proper and public constitution or by-laws, maintain common and open conferences introduced upfront, and meet sure membership requirements, corresponding to a ceiling on members with ties to the medical insurance trade. Market boards should even have publicly out there insurance policies governing conflicts of curiosity and monetary curiosity disclosures, ethics ideas, and accountability and transparency requirements. Federal guidelines implementing the ACA don’t specify the variety of occasions Market boards should meet yearly, how far upfront conferences have to be introduced, the variety of people on the governing board, if there are time period limits for voting board members, or how board members are chosen or appointed.
In establishing a Market, states should guarantee it’s financially self-sufficient. States have broad flexibility to decide on the mechanism by which they fund their Market, corresponding to an evaluation or payment on insurers or a state appropriation of different funds. States can also apply for future federal grants, corresponding to when Congress allotted extra funding underneath the American Rescue Plan Act (ARPA).
The ACA requires Marketplaces to seek the advice of with stakeholders on a “common and ongoing foundation,” together with Market enrollees, people and entities facilitating Market enrollments, small companies representatives, the state’s Medicaid company, “advocates for enrolling exhausting to achieve populations,” federally acknowledged Tribes, public well being consultants, suppliers, massive employers, insurers, and brokers/brokers. Federal guidelines don’t specify the frequency or kind for stakeholder session, which elements of the Market operations are topic to stakeholder enter, or a course of to make sure stakeholder suggestions is included into Market insurance policies and practices.
Extra Than a Web site
The Marketplaces should carry out a number of features designed to make sure that customers are in a position to perceive their choices, decide their eligibility for premium tax credit, and enroll in a well being plan that meets minimal requirements. These features embrace:
Plan Administration. States that function their very own Marketplaces are liable for certifying that well being plans are “certified well being plans” (QHPs), merchandise eligible to be bought on the Market. This implies the plans should meet federal and state profit necessities, premium ranking guidelines, prescribed “actuarial worth” or plan generosity ranges, prohibitions in opposition to discriminatory profit design or pre-existing situation limitations, and community adequacy, amongst different requirements. Whereas some necessities apply to plans in each Market, others, corresponding to particular community adequacy requirements, range relying on whether or not the Market is state- or federally run. Some Marketplaces that function independently of their state division of insurance coverage (DOI) nonetheless depend on their DOI for sure plan administration duties.
On-line Eligibility and Enrollment Platform. Marketplaces should preserve a web site for customers to buy and enroll in protection in a method that’s accessible for these with disabilities and/or restricted English language proficiency. Web sites should present, for instance, standardized details about QHPs to facilitate plan comparability, together with premium and cost-sharing particulars, a shopper value calculator, a abstract of advantages and protection for every product out there, high quality scores, and supplier directories. Market web sites additionally function an entry level for different insurance coverage affordability packages, corresponding to Medicaid, both by working a full eligibility dedication or directing customers to the suitable state company. The character of medical insurance enrollment additionally requires Marketplaces to gather delicate private info, and accordingly Marketplaces should meet federal privateness requirements or face financial penalties.
Most of the first Market web sites had been a catastrophe, main a number of to pivot to the FFM of their first yr. Since then, each federal and state platforms have improved significantly and efficiently enrolled tens of millions of customers. Nevertheless, the continuing upkeep and operation of those web sites requires a substantial funding. Federal coverage modifications, such because the current premium subsidy enhancements in ARPA and the Biden administration’s “household glitch” repair, may require speedy and costly updates to on-line eligibility methods. In each of these cases, some SBMs weren’t in a position to make the mandatory modifications to their web sites in a well timed style.
Market Name Facilities. SBMs are required to function a toll-free name middle to subject questions and requests from customers in regards to the eligibility and enrollment course of. Aside from the requirement to have a toll-free name middle, federal guidelines don’t impose exacting requirements on Marketplaces, corresponding to staffing ranges or most name wait occasions. Some Market name facilities have skilled system outages and vital wait occasions throughout their annual enrollment intervals. Up to date, clear federal requirements and ongoing oversight of customer support high quality may assist keep away from related points sooner or later.
Outreach and Enrollment Help. Federal rules require SBMs to “conduct outreach and schooling actions . . . to coach customers in regards to the [Marketplace] and insurance coverage affordability packages to encourage participation.” Aside from being accessible for folks with restricted English proficiency and other people with disabilities, SBMs have vital flexibility in how and to what extent they conduct this outreach.
SBMs are required to run and fund their very own Navigator packages, though federal guidelines depart many of the particulars of these packages to the states. As an illustration, though all Marketplaces should set up sure coaching requirements (corresponding to coaching on assembly the wants of underserved populations), states can decide the content material and frequency of these trainings.
Federal guidelines additionally don’t set up a minimal funding stage required for both Navigator packages or outreach campaigns. Consequently, there’s a wide selection of SBM funding ranges in these confirmed techniques for growing protection.
Course of for Transitioning to a State-Based mostly Market
The method for transitioning to an SBM usually requires the state to submit two foremost elements to the federal authorities: (1) a letter declaring the intent to transition, and (2) an “Alternate Blueprint” to exhibit the state’s capability to function a Market. Federal regulators have made some changes to the Blueprint over time, most notably permitting states to easily attest that they meet most of the federal necessities to function a Market as a substitute of submitting documentation offering proof of compliance. And, regardless of stakeholder concern, starting in 2024 Blueprint approval is not required no less than 14 months previous to the beginning of the brand new SBM’s preliminary open interval, permitting for a shorter timeframe between federal approval and an SBM turning into operational to serve customers.
Setting a Bar: Potential Minimal Requirements
With out extra minimal requirements for the design and operation of an SBM, there’s a threat that the buyer expertise with the Market will worsen, making enrollment more difficult and in the end lowering protection charges. Whereas the ACA clearly envisions a excessive diploma of state autonomy over the operation of the Marketplaces, just a few extra requirements for SBMs may embrace, for instance:
- A deliberative SBM transition course of. Hiring employees with the mandatory expertise and experience, procuring the mandatory IT and different service suppliers, testing methods, constructing model consciousness, and interesting with assisters, carriers, and different stakeholders all take time. Given the stakes for customers, it’s not a course of that needs to be rushed. It is also useful for states to spend a minimal of 1 yr as an SBM on the federal platform (SBM-FP) earlier than totally transitioning to an SBM. This would offer a while for CMS to evaluate the state’s method to governance, shopper outreach and help, and stakeholder engagement, earlier than handing over full management.
- Transparency and group engagement. States needs to be soliciting and incorporating public touch upon their proposed Blueprint, and publicly posting their Blueprint functions. Better transparency surrounding SBMs’ income supply(s) and spending, corresponding to extra distinguished public posting of audits, in addition to information on key metrics corresponding to plan choices, effectuated enrollments, name middle wait occasions, and spending on Navigators and shopper help can also be crucial.
- An funding in shopper outreach and help. Given the confirmed effectiveness of shopper outreach and help, it will likely be essential for SBMs to fulfill minimal efficiency requirements for shopper outreach, name middle help, and Navigator packages.
- Requirements for Market well being plans. Enrollees in all Marketplaces should have plans that meet minimal standards for certification. Though CMS has so far kept away from extending some requirements, corresponding to community adequacy, to insurers in SBM states, a federal ground could possibly be useful to keep away from a large divergence in shopper protections throughout states. At a minimal, if a state shouldn’t be imposing the ACA market reforms, it shouldn’t be working an SBM.
To this point, states have chosen to function their very own Market based mostly on a dedication to reasonably priced, complete medical insurance for all their residents, with the SBM serving as a crucial instrument for attaining that purpose. However in some states that will search SBM standing sooner or later, notably those who have demonstrated antagonism in direction of the ACA’s protection expansions and shopper protections, additional federal guardrails may assist scale back the chance of a decline in customers’ expertise and, within the worst-case state of affairs, a reversal of the current features in insurance coverage protection.
The authors thank Justin Giovannelli, Jason Levitis, Sarah Lueck, Claire Heyison and Tara Straw for his or her considerate overview and enhancing of this submit.