After nearly three years of polarized anticipation, the Affordable Care Act’s (ACA) cornerstone healthcare coverage provisions now become reality. In 2013 the spotlight shifts to the states. Building up to 2014, when the major provisions of the law take effect, state officials must make a series of decisions about how—or if—to run their own insurance exchanges, whether to expand Medicaid coverage, and what type of insurance market regulation is needed. Tabling these decisions is not an option; where states are unable to, or choose not to, implement reforms, the federal government will step in.
States were to submit plans for state-based insurance marketplaces, known as exchanges, in December 2012, and blueprints for partnership exchanges are due in February 2013. In October 2013, an open enrollment period will kick-start the exchanges, drawing millions of people who were previously uninsured—and putting pressure on states to aid consumers in selecting coverage and determining subsidy eligibility.
State decisions about whether to expand Medicaid to 138 % of the federal poverty level (FPL), about $15,400 for an individual, will have a direct impact on the exchanges.1 In states that choose not to expand, some individuals who would have been eligible for Medicaid will instead receive subsidies to buy insurance through the exchanges (those with income between 100% and 138% of the FPL). Subsidies will boost exchange participation, but states and industry alike know from experience how challenging it can be to enroll new populations.
About 30 million Americans are expected to gain coverage under the ACA through Medicaid, exchanges, and employer-sponsored coverage. However, the newly insured are likely to be significantly poorer, less educated, less likely to be employed full time, and more ethnically diverse than those who are currently insured, according to demographic analysis by PwC’s Health Research Institute (HRI).2 States and healthcare companies must anticipate the needs of this population and devise strategies to engage and educate them. A recent HRI consumer survey indicates that just a third of consumers believe exchanges will make shopping for coverage easier, while the same number say they don’t have enough information.
Guidance released by the federal government in November 2012 notes that states will oversee risk pools, develop their own effective rate review programs, establish open enrollment periods, and have a hand in certifying qualified health plans.3 States will also have flexibility to define essential community providers.4
The biggest challenge facing the states in 2013 is information technology. Many are overhauling their existing Medicaid eligibility systems and designing an exchange infrastructure to create a single, seamless entry point. Even states not expanding Medicaid or running their own exchanges must conduct significant upgrades to existing systems.5
Implications
- State exchange leaders should involve stakeholders and conduct thorough research on consumer needs, then design targeted outreach and education programs using many communication channels. For example, Colorado is partnering with statewide organizations to conduct focus groups and has used social media, including blogging and Twitter, to reach potential participants. Colorado also plans to engage “trusted faces” to educate its citizens about the exchange. 6
- States should creatively and efficiently build IT capabilities by partnering with other states, using commercial offthe- shelf systems, optimizing existing technical components, and/or engaging contractors with detailed expertise in systems integration. Some are relying, at least temporarily, on the federal government’s infrastructure currently under development.
- Healthcare companies should get to know their new customer base and be prepared to deal with distinctive challenges, such as language barriers and frequent movement between exchange plans and Medicaid.
- Healthcare companies should closely monitor how states are interpreting new rules and regulations, and stay in close communication with state officials as they build their regulatory capacity.
