State waited too long to set up health insurance marketplace

cjarvis@newsobserver.comJuly 15, 2012 

  • Expanding health care coverage Starting in 2014, most people who are uninsured or buying individual insurance with incomes up to four times the poverty level ($92,200 for a family of four and $44,680 for a single person in 2012) will be eligible for expanded coverage through Medicaid or tax credits to subsidize the cost of private insurance. The Patient Protection and Affordable Care Act requires most people to have basic insurance coverage or face penalties. State-based marketplaces will allow people to shop for insurance policies. There were an estimated 1.6 million people without health insurance in North Carolina, amounting to 19 percent of the population, in 2010. N.C. Health Benefits Exchange proposal: • Would certify insurance plans, create a website so customers can compare plans, provide a quality rating system, set up a telephone hotline, and provide consumer outreach and assistance. • Cost estimates: It would cost $23.8 million in 2014, $25 million in 2015 and $26.7 million in 2016. • Expected to have 715,000 participants enrolled in 2014 (about 51,000 small businesses; the rest individuals), and reach about 900,000 by 2016. • Would be an independent, nonprofit, quasi-governmental agency with an executive and a board of directors. • Expected to have 715,000 participants enrolled in 2014 (about 51,000 small businesses; the rest individuals), and reach about 900,000 by 2016. • The rate of uninsured nonelderly adults in North Carolina is estimated to decrease in 2014 from 18 percent to 8 percent, under an exchange. Read the N.C. Institute of Medicine report.

North Carolina legislators have taken so long to set up a mandated marketplace where uninsured people and small businesses can shop for health insurance that the federal government will have to do it for them.

They’re not alone. About one-third of the states are also still trying to decide whether to establish the health benefits exchanges or let federal officials run them, or do it together. Another third have already established exchanges, and the rest have decided not to or have done nothing at all about it.

Republican governors and legislators across the country have balked at provisions of the Patient Protection and Affordable Care Act, especially the added expense of expanding Medicaid benefits and mandating that everyone carry health insurance. But states that want to retain control of the exchanges are still facing a mid-November deadline to apply to have detailed plans approved by January so they can begin operating a year later.

North Carolina has no plan.

Alan Weil, executive director of the National Academy for State Health Policy, a nonpartisan group based in Washington, said states like North Carolina are being cautious.

“I would say the majority of states are still figuring out their options,” Weil said Friday. “The problem is they need to figure it out pretty quickly.”

After the first year or two, North Carolina can try to control its own insurance exchange, or do it in partnership with the federal government. But that will require the General Assembly to decide what to do, which is a decision they have been putting off.

“I can’t imagine North Carolina wouldn’t choose to do their own,” said Rep. Verla Insko, an Orange County Democrat and retired health program administrator. “As a Southern state, to have the federal government take it over – I would look forward to having a serious conversation about that.”

Weil said some states delayed a decision until the courts ruled on challenges to the 2010 act, and others are waiting to see how the presidential and congressional elections go this fall, as presidential candidate Mitt Romney has vowed to repeal the act.

“I would call that a gamble,” Weil said. “It’s a gamble they may or may not win.”

Other states have simply been trying to understand the implications of setting up the benefits marketplaces, he said.

Republicans’ response

Republican leaders in the N.C. House and Senate made it clear where they stand, politically. A bill the new GOP-controlled legislature immediately passed upon taking office last year would have prohibited government-mandated insurance coverage, but the governor vetoed it. In May 2011, the Republican leadership filed a friend-of-the-court brief in one of the federal lawsuits challenging the Affordable Care Act.

But they took different approaches when it came to the practicalities of setting up an exchange. Although both chambers approved a provision in a technical corrections bill expressing their intention to establish an exchange, only the House passed legislation actually creating it.

The Senate didn’t act on the House bill, with leader Phil Berger deciding to wait to see how the U.S. Supreme Court would rule. Once the court upheld most of the act last month, Berger didn’t take it up in the final days of the legislative session. Now North Carolina is facing a deadline it cannot meet.

Once the U.S. Department of Health and Human Services takes control of North Carolina’s exchange, the state can apply to wrest control back. But it won’t be able to do that until it does enough work to show that it can take over the program at least a year before it actually does.

A spokesman for Berger’s office said last week there will be “ample opportunities” for North Carolina to establish a state-based program if it decides to go that route. That’s true: Federal grants to plan and implement exchanges will be available through 2014.

Moving forward

The inaction came despite the recommendation of an advisory group based on the work of about 260 experts from a variety of fields who studied the issue for up to a year and a half, concluding this spring, under the direction of the N.C. Institute of Medicine.

That group, chaired by the state insurance commissioner and the secretary of Health and Human Services, recommended the state set up an independent, quasi-governmental agency nonprofit in time to begin enrollment in October 2013 and go online in January 2014, and to pursue a third round of grants this summer.

The state received a $1 million planning grant in 2010 to study whether to proceed with a state-based exchange. The state then qualified in 2011 for an additional $12.4 million grant to expand those efforts, including hiring staff and consultants and build a computer system to federal requirements, but had to wait for 3-and-a-half months to accept the money while a committee chaired by Berger and House Speaker Thom Tillis considered signing off on it.

According to a poll earlier this month by the Kaiser Family Foundation, most Americans (56 percent) are ready for the political fighting over the Affordable Care Act to end and are ready for its detractors to quit trying to stop it.

Solid majorities of all political persuasions said the Supreme Court’s decision wouldn’t have an effect on whether they vote in November, the poll found, although Republicans said they were more likely than Democrats to turn out.

Insko, the North Carolina Democratic state representative, said if voters elect a Democratic governor and give one chamber a Democratic majority, the state would be more likely to move forward with a state-sponsored exchange.

Jarvis: 919-829-4576

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