May 11, 2012 – As states decide whether to establish and operate their own health insurance exchange under the Affordable Care Act (ACA) or have the federal government operate one, a new study released by Georgetown University and the National Academy of Social Insurance (NASI) concludes that certifying and managing health plans in the exchange will require far greater collaboration across state agencies and with the federal government. Under the ACA, exchanges must certify that plans comply with critical consumer protections, achieve quality standards, and conduct ongoing oversight. This set of activities is generally referred to as “plan management.”
The report, Plan Management: Issues for State, Partnership and Federally Facilitated Health Insurance Exchanges, by Sabrina Corlette, JoAnn Volk and Kevin Lucia of the Center on Health Insurance Reforms at Georgetown University’s Health Policy Institute, is the first to review how state and federal regulators currently perform plan management activities and assess how those activities are likely to change as a result of the ACA. Such activities include confirming a plan’s “good standing,” assessing network adequacy, reviewing rates and benefits, regulating marketing practices, improving quality, and conducting ongoing compliance monitoring.
“We found that the ACA’s requirements for plan management in some cases expand on what states currently do to regulate insurance, but in other cases call for a paradigm shift in how state regulators approach their role,” said Sabrina Corlette, a Research Professor at the Center on Health Insurance Reforms and lead author of the report.
The report notes that effective plan management becomes even more complicated in states where the federal government is operating the exchange, although the federal agency responsible (the Centers for Medicare and Medicaid Services, or CMS) already has considerable experience managing private health plans through Medicare Advantage.
“No matter who performs the plan management function,” said JoAnn Volk, a Georgetown Research Professor and co-author of the report, “they will face heightened public scrutiny - federal taxpayers will be expecting value for the premium dollars being spent.”
The report concludes that while the ACA will require states to impose more oversight and accountability on health insurers than they have to date, all states can build on an existing infrastructure within their states’ department of insurance, department of health and Medicaid agencies. And for federally facilitated exchanges, the report notes that CMS will need to build relationships with state regulators in order to ensure that all insurers, whether inside or outside an exchange, are meeting consumers’ needs.
“The good news is that, regardless of how the exchange is governed, exchanges have a real opportunity to work creatively with other state agencies and their federal partners to leverage the necessary expertise and better serve consumers,” said Lee Goldberg, Vice President for Health Policy at NASI.
The report is a product of a NASI project funded by the Robert Wood Johnson Foundation to provide technical assistance to states developing health insurance exchanges. Related products include a toolkit offering legislative language for policymakers implementing Exchanges and issue briefs on Exchange governance, active purchasing, federally facilitated Exchanges and coordination with Medicaid.
For more information about Plan Management: Issues for State, Partnership and Federally Facilitated Health Exchanges, please contact Sabrina Corlette at firstname.lastname@example.org or JoAnn Volk at email@example.com or visit http://chir.georgetown.edu/. For information about NASI’s Health Insurance Exchange project, please contact Lee Goldberg at firstname.lastname@example.org or visit www.nasi.org.