Feds ease deadline for state to create insurance exchange

Tennessee lawmakers won't need a special session to determine whether to set up a state health insurance exchange called for in the federal health care reform law, according to Lt. Gov. Ron Ramsey.

Ramsey, R-Blountville, had floated the idea of holding a special session later this year on creating an exchange pending a U.S. Supreme Court ruling on the law this summer.

"The federal government has now decided they aren't ready (to implement the exchanges). ... Time is not of the essence now. We'll come back in session in January and address it then," Ramsey said.

Tennessee's state government still faces a January 2013 deadline to develop a "readiness review" for an exchange, according to TennCare spokeswoman Kelly Gunderson.

The reform law, also called the Affordable Care Act (ACA), says either the states or federal government can run state health insurance exchanges starting in 2014.

In a policy overview document, Gov. Bill Haslam's administration noted the exchanges represent a "dramatic shift" in the insurance market.

For more than a year, Haslam administration officials have been barnstorming the state to meet with small businesses, agents and brokers, health care providers, insurers, consumer advocates, and other stakeholders to discuss the state's options.

An exchange, according to the document, would enable consumers to qualify for tax credits, define commercial standards for exchange health plans, and allow consumers to compare multiple plans.

The exchange plans could provide "bronze, silver, gold or platinum" coverage according to the percentage of expected health care costs each health plan would cover.

Employers, meanwhile, would face penalties for not offering "affordable" health insurance, according to the ACA.

To enroll in the exchange, consumers would have to log on to an Internet portal, choose their level of coverage, and compare health plans.

A concern expressed by the Haslam administration is there would be a "tsunami of demand" during the exchange's first open enrollment period in October 2013. Other concerns include whether insurers would participate in the exchange, employers dropping coverage, technical failures, and skyrocketing insurance rates.

Insurers for the first time will also need to estimate the unknown health care needs of the uninsured, the Haslam administration document also pointed out.

The federal government recently announced Tennessee will be awarded $4.3 million to use in establishing a state health insurance exchange. More than 30 other states and the District of Columbia will receive similar federal grants.

As of this month, 10 states and the District of Columbia had passed legislation to establish state-based health insurance exchanges, according to the National Conference of State Legislatures. Two states established an exchange by executive order. Governors in New Jersey and New Mexico, however, vetoed exchange establishment bills passed by their legislatures.

Ramsey said the Haslam administration, with assistance from state department heads, will put together an exchange plan for lawmakers to consider.

"I think the (Obama) administration in Washington realized with the Supreme Court decision up in the air, and the fall (presidential) election up in the air, this isn't the time to be pushing this," Ramsey said. "(But) we either design a plan of our own and adopt that or the federal government comes in with their plan. ... I don't think there is a third option."

With or without an exchange, Tennessee still faces expanded Medicaid eligibility called for in the ACA.

For more information go to www. tn.gov/exchange.

20 May, 2012