Health reform rolls forward with exchanges

Central to health reform in the next few years will be the creation of insurance exchanges, where small businesses and other consumers can shop for coverage that best meets their needs.

The Patient Protection and Affordable Care Act signed by President Obama in March calls for the exchanges to be up and running by Jan. 1, 2014. Colorado is moving toward creating a vision for its exchange through a series of community forums around the state.

Two forums have already been held in Denver, and others are being scheduled with at least one to be held this fall in Northern Colorado. The date and place for that forum have not yet been finalized.

“First, we want to get a vision as to what people would like to see an exchange be,´ said Lorez Meinhold, director of health reform implementation for Gov. Bill Ritter. “Part of the forums is to get some goals and values around an exchange. It’s likely that next session legislators will have to appoint a department or authority to start looking at all of this. We’re trying to create an implementation plan that would go into the next administration so they can proceed forward with better information.”

And there will definitely be a new administration that will have to deal with the provisions of health-care reform. Ritter, elected in 2006, bowed out earlier this year from a run for a second term. Whether that new administration is led by another Democrat or a Republican will be decided by voters in November.

Regardless of who wins the governor’s office, the health care act’s provisions will continue to unfold through 2017. The establishment of a health insurance exchange will be a big milestone along the way toward full implementation.

But it’s all pretty amorphous right now. In fact, the federal Department of Health and Human Services has not yet finalized its rules for the creation of exchanges. HHS has requested states, consumer advocates, employers, insurers and other interested stakeholders to submit comments by Oct. 4.

So until those rules are issued, Colorado and other states are going about the process of trying to learn what residents would like to see the exchanges do. Late last month, HHS announced each state would be eligible for a grant of up to $1 million to help get the exchange ball rolling.

Some broad parameters have already been laid out. Virtual exchanges – accessible via the Internet – will require insurance companies that wish to participate to offer a basic level of coverage with costs and benefits that can be compared between companies.

Ideally, the exchanges would simplify the process of shopping for coverage among the myriad plans in the commercial market and would theoretically increase direct competition and thereby lower premiums. According to the Kaiser Family Foundation, which analyzes health-care issues, the exchanges will assign a rating to each plan based on the relative quality and price of its benefits.

The new reform law provides flexibility in creating exchanges, allowing states to develop their own or join with other states to create bigger pools of consumers and obtain lower rates.

In addition, the exchanges are supposed to help those with low incomes purchase affordable subsidized coverage.

One big as-yet-unanswered question is whether a “public option”-type plan may be available through an exchange. Advocates of a single-payer, Medicare-for-all plan were thwarted by opponents during the legislative battle over reform and may try to insert such an option into the exchanges as they are set up.

Meinhold says she’s not sure whether that will happen in Colorado. “I think a lot of single-payer folks are trying to figure out what a public option could be,” she said. “But first we have to know what resources are available, what vehicle it would come through and what is the political risk. I don’t think anything is off the table. But right now, it’s what does the table look like?”

Meinhold said 2014 may seem far in the future, but it will be here before we know it.

“Four years feels like a long time away, but with all that has to be done it’s not that much time,” she said.

Steve Porter covers health care for the Northern Colorado Business Report. He can be reached at 970-232-3147 or at sporter@ncbr.com.

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