Members of a health insurance exchange agency advisory group in the Midwest are thinking about the inner workings of the state's exchange program.
The Minnesota Health Insurance Exchange Advisory Task Force has been talking about how the state should manage swings in health insurance risk in 2014, when major provisions of the Patient Protection and Affordable Care Act of 2010 (PPACA) are set to take effect.
PPACA created three mechanisms that are supposed to help keep PPACA from swamping some insurers with crushing new waves of health claims:
- A 3-year risk corridor program.
- A 3-year reinsurance program.
- A health insurance exchange-managed risk-adjustment program.
An advisory task force work group presented a report on the topic at a recent task force meeting.
The Minnesota work group noted that PPACA already requires the federal government to manage the PPACA risk corridor program, and that the task force already has decided to let the federal government handle the PPACA reinsurance program.
Although Minnesota has been helping to implement a PPACA exchange, not shutting PPACA out, the state lacks the ability to set up the kind of risk-adjustment system that PPACA would require, the work group said.
Because of that lack, "the U.S. Department of Health and Human Services should administer the risk-adjustment program on Minnesota's behalf," the work group said.
The work group said the Minnesota exchange could always go back and take over management of the risk-adjustment system later, once it has the ability to set up and run the system.
The PPACA exchanges
Drafters of PPACA included the exchange provisions in an effort to help consumers and small employers do a better job of shopping for health coverage.
Starting late in 2013, the exchanges, or Web-based health insurance supermarkets, are supposed offer individual consumers, families and small groups menus of standardized, high-quality health plan options. Low-income and moderate-income consumers and some small groups are supposed to be able to use new federal tax credits to pay for the coverage.
Both inside and outside the PPACA exchange system, PPACA is supposed to require health insurers to sell individual and small group coverage on a nearly guaranteed-issue basis.
Insurers will be able to take an applicant's age into account when pricing coverage for that applicant but not the applicant's state of health.
Some states are letting the U.S. Department of Health and Human Services (HHS) provide all exchange services for their residents. Other states are building their own exchange programs.
