Now that the Supreme Court has spoken and upheld the Affordable Care Act (ACA), how exactly does this impact state governments?
One of the biggest ramifications of this decision revolves around the ACA’s individual mandate requiring citizens to purchase some form of health insurance or face a penalty, and the subsequent requirement for each state to establish a health insurance exchange (HIX).
While many states have spent the last two years preparing themselves in some capacity to set up an exchange, the amount of progress made varies greatly from state to state. Some have taken measureable strides to ensure their exchange is up and running to meet the October 2013 enrollments and January 2014 coverage effective deadlines set forth by the ACA, while others have been waiting on the final decision from the Court. Now that it’s been made, we’re going to see these states in a scramble to build their HIXs in accordance with the ACA’s mandates and timeline.
What we’re hearing from our clients indicates the majority want to make health reform as state-specific as possible. In other words, they want to maintain control over their HIX rather than defaulting to the federal solution. But as the certification deadline looms, it’s increasingly important for states to consider a comprehensive solution that doesn’t require building a product and allows time for customization.
We have formally announced our Health Insurance Exchange solution, which enables us to provide a customizable HIX solution that states can tailor to meet the needs of their residents and small businesses and be sure it’s ready on time. We were recently awarded an ACA-compliant exchange in Nevada and also announced a partnership with Florida Health Choices to build Florida’s insurance marketplace.
As federal rules regarding HIX development are still evolving, states have many decisions to make around governing rules and scope, all while managing the very complex, expanding, and resource-intensive Medicaid program, another huge impact the ACA will have on states.
The expansion of the Medicaid program means more than 15 million new healthcare consumers selecting and enrolling in a health plan, so states must be ready to meet this new market and have a partner onboard with a strong portfolio of technology and services to help them.
From a policy and programmatic standpoint, the process of administering this influx of new beneficiaries is going to be complex. Obviously, state budgets will continue to be challenged by the fiscal impact of these 15 million new consumers, so states will look to technology vendors to provide efficient services and program management services to help manage the cost of care. Having spent the last two years in meetings with every state, Xerox is in a great position to help them deliver these programs.
This decision is a landscape-shifting event and now more than ever, partnerships are essential. It’s also a very exciting time because there’s been a bit of paralysis in the market for the last two years, but we’re energized and also humbled by the challenges ahead.
Will Saunders is the group president of government healthcare solutions for Xerox Corporation. For more from Will Saunders, check out his interview discussing the Supreme Court ruling on Xerox Blog Talk Radio here.
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States must resist setting up exchanges. If the states set up exchanges, potential fines for companies with more than 51 employees could increase from $2,000 per employee to $3,000 per employee.
Don’t be fooled by exchanges (the latest and greatest idea) – they will not be simple (by design) to understand by the client (uninsured) and will not offer much if any real reduction in premium cost unless they offer the tried and true, reduction-in-benefits method, of premium reduction. Potential uninsured clients will assume unknown risk by cutting benefits to the bone to avoid the “penalty” as cheaply as possible only to be surprised by lack of the needed coverage they really require.
If somehow they do offer meaningful price reduction then we can only conclude that the insurance industry has been lying about it’s profit margins.
I can name only one governor (Snyder of Michigan) who has changed his mind on exchanges post-SCOTUS – and I suspect his legislature might put him back on the right path. Others have re-affirmed their opposition and will wait until the November election to re-visit the issue. Your victory lap is too soon.
As a layman who has been trying to grasp the meaning of “exchanges” (plural) since I first read the term, I have the impression that states are now empowered to define a variety of insurance plans, each of which is clearly defined to be offered (or not) by private insurance companies offering those plans in the respective states. Premiums may range from the most expensive (with many benefits) to very economical (just the minimum) with a range of choices in-between.
I get the idea from your link that state “mandates” are frozen and do not offer such a choice. What am I missing?
Also, where might HSAs puzzle into the mix?
Furthermore, how does your description square with the notion of multi-state compacts to be enabled (with states wanting to participate) in 2016? [Permits states to form health care choice compacts and allows insurers to sell policies in any state participating in the compact.]
Yes, states want to maintain control over health care and insurance as much as possible. Those who advocate for more federalism in health care forget that the states are a major driver of our health care costs. When left to their own devices, states mandate a lot of care. When you look at the number of mandates, you find out that a lot of those states that claim to value markets and liberty are pretty free with mandating care.
http://www.cahi.org/cahi_contents/resources/pdf/MandatesintheStates2011ExecSumm.pdf
Steve
The individual mandate and ACA were upheld, but the medicaid expansion was left optional, right?
Since this was supposed to be a significant driver of the cost management, it will be interesting to see how the states manage this component of the law and if it allows the ACA actuallyachieve its end goals.
Agreed that anyone able to provide a customizeable solution to help states on broad this whole process by the due dates is in a good position.