State Partnership Exchanges are a hybrid model for operation of a Health Insurance Exchange (HIX) under the Affordable Care Act. In this model, responsibility for Exchange functions is shared between the state and Centers for Medicare and Medicaid Services (CMS). The other two models are a Federally Facilitated Exchange (FFE, i.e., federally run Exchange) and a state-run Exchange.
Each state will have a Health Insurance Exchange, whether operated by CMS, the state, or jointly by the state and CMS. The CMS Center for Consumer Information and Insurance Oversight (CCIIO), which is responsible for most federal aspects of ACA implementation, has issued detailed guidance for states preferring to partner with CMS/CCIIO in operating the Health Insurance Exchange. Since HIX implementation and operation is highly complex, the State Partnership Exchange model is an opportunity for states to position themselves to operate a state-run Exchange in future years.
Complexity of Health Insurance Exchanges:
This image illustrates the complexity facing states and CMS. The excellent diagram – developed by Hunt Blair, Deputy Commissioner, Division of Health Reform, and State Health Information Technology Coordinator at the Department of Vermont Health Access – shows at a high level the enterprise business architecture for the Vermont HIX – Vermont Health Connect. It nicely demonstrates the magnitude of the required systems linkages for an Exchange. Click on the image to view it in full screen.
More importantly, it is evidence of Vermont’s creative and rigorous process for creating a new infrastructure to handle the myriad functions, meet federal requirements, integrate public health care program enrollment where possible, and make the process of health plan shopping seamless and helpful for consumers.
Yes, it’s complicated but that is the nature of the beast. Kudos to Deputy Commissioner Blair and the Vermont team for an elegant approach to a new enterprise business architecture to think through and manage the complexity.
Basic Timeline for Exchanges:
Starting in January 2014, individuals and small businesses (with 100 or fewer full-time employees) may buy ACA-compliant health insurance coverage from among Qualified Health Plans (QHPs) certified by the Exchange. Federally subsidized premiums will be available for individuals and families with incomes between 100-400 percent of poverty, with federally subsidized cost sharing available for those with incomes below 250 percent of poverty. However, the subsidies will be available only through the Exchanges. Every Exchange applicant will be first screened for Medicaid and Children’s Health Insurance Program (CHIP) eligibility and automatically enrolled in Medicaid or CHIP if eligible.
The initial open enrollment period for QHPs will runs from October 1, 2013 through March 31, 2014, with coverage and subsidies (for those eligible and enrolling in time) starting on January 1, 2014. Therefore, each Health Insurance Exchange must be tested and operational by September 2013.
Two Approaches to State Partnership Exchanges:
There are two basic models for a State Partnership Exchange. In a State Plan Management Partnership Exchange, the state will handle the plan management functions – such as review, certification, contracting, and oversight of Qualified Health Plans – with CMS handling other functions, such as the Exchange website, consumer assistance, education and outreach, and enrollment. In a State Consumer Partnership Exchange, the state handles the consumer, outreach, and enrollment functions and CMS manages the plan management functions. However, states also have the option to assume responsibility for a dfferent combination of main Exchange activities.
Guidance for State Partnership Exchanges:
CMS’s Guidance for State Partnership Exchange describes the necessary functions for State Plan Management Partnership Exchange, including:
- QHP Certification Process
- QHP Issuer Account Management
- Issuer Oversight
- Issuer and Plan Data Collection
They also provide a recommended timeline for implementation of a State Plan Management Exchange in 2013.
For the State Consumer Partnership Exchange, the CMS guidance for states describes these activities:
- In-Person Assistance Programs
- Interaction with Agents and Brokers
- Interaction with Consumer Assistance Programs (CAPs)
- Timing of Consumer Assistance
- Consumer Outreach and Education
- Outreach and Education
For the State Consumer Partnership Exchange option, CMS also outlines the timing of and minimum standards for specific state deliverables.
For both the State Plan Management Partnership Exchange and the State Consumer Partnership Exchange, the CMS guidance describes the roles CCIIO will plan, the process for CMS approvals, and the basic path for transition from a State Partnership Exchange to a state-based Exchange in future years.
To read the 23-page CMS Guidance for the State Partnership Exchange, click here (PDF).