Health insurance exchange planners at the Nebraska Department of Insurance say states have too little information about federal health insurance regulations to get exchanges up and running by Jan. 1, 2014.
The planners come to that conclusion in a health insurance exchange report posted on the Nebraska department’s website.
A state can choose between running its own exchange and letting the U.S. Department of Health and Human Services provide exchange services for its residents.
A state also can choose whether to offer more than one exchange or to participate in an exchange run by a multi-state consortium.
If Nebraska could get an exchange into operation by 2014, the number of enrollees served in 2016 could range from about 100,000 to about 300,000, depending on how the state structures the exchange program, the planners say.
The Patient Protection and Affordable Care Act of 2010 (PPACA) is supposed to set up a health insurance distribution exchange program by 2014. Individuals and small employers are supposed to be able to use new subsidy systems to use the exchange system to buy private health coverage that meets federal quality standards. The exchanges are also supposed to distribute new types of coverage, such as coverage written by nonprofit cooperative plans and coverage written by multi-state plans.
Nebraska received a $1 million federal exchange planning grant to participate in the program.
One problem is that the Centers for Medicare & Medicaid Services (CMS) and the Center for Consumer Information and Insurance Oversight (CCIIO) are running behind with efforts to develop key regulations, such as the regulations describing the “essential health benefits” package that would be at the heart of coverage sold through the exchange system, the exchange planners say.
Given the lack of final regulations, the Nebraska exchange team “believes that CMS/CCIIO has given Nebraska and all other states deadlines that are impractical and improbable to meet,” the planners say.
Nebraska should continue to study the exchange program options, including the idea of forming a federal partnership, and, if the state does run its own exchange, the state should have only one exchange, the planners say.
“Nebraska does not have the population to house and sustain multiple exchanges,” the planners say.
Any Nebraska exchange that is created should be as simple as possible, because of the short lead time, and the exchange should simply let in all plans that meet the minimum quality standards rather than trying to be an “active purchaser,” the planners say.
Participation in the program could stand at about 120,000 in 2016 if the state sets the small group participation limit at 50 employees and does not merge the individual and small group markets.
Participation could be more than 300,000 in 2016 if the state sets the small group limit and makes the exchange the exclusive distribution channel for individual and small group coverage.
If the exchange has a caseload of about 100,000, the break-even level of revenue might be about $11 per contract per month, excluding information technology (IT) costs, the planners estimate.
The break-even point might be about $22 per contract per month, excluding IT costs, if the exchange serves just 50,000 enrollees.
IT costs might be about $3 per enrollee per month, the planners estimate.
An exchange program might need about 34 full-time employees in 2014, between $61 million and $87 million in startup funding, and, starting in 2016, an annual operating budget of about $18 million, the planners say.