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DC considers how to fund exchange

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Members of the public want the managers of the DC Health Link to consider paying for exchange operations by imposing new taxes on the sales of items such as tobacco, alcohol, sugar and salt.

At least one would like the exchange to benefit from the fines produced by traffic enforcement cameras and parking meters.

The District of Columbia Health Benefit Exchange Authority has included the comments proposing those funding solutions in a packet prepared for a recent board meeting.

The Patient Protection and Affordable Care Act provided startup funding for locally-based public health insurance exchanges, but it requires the locally-based exchanges to become financially self-sustaining starting in 2015.

The U.S. Department of Health and Human Services expects to fund its exchanges with an exchange insurer user fee equal to 3.5 percent of exchange plan premium revenue.

In a draft financial sustainability report, D.C. exchange managers suggested that the authority could levy a licensing fee and collect a “broad-based assessment on all health insurance premiums in the district” from non-group, small group, large group and Medicaid managed care carriers.

Drafters said the authority might cut collection costs by collecting the fee only from carriers with at least $50,000 in annual district premium revenue.

Jeff Album, a vice president at Delta Dental, said his group thinks the idea of charging exchange plan issuers a user fee would be a good funding mechanism.

But he notes that the District of Columbia has kept issuers of stand-alone dental plans out of DC Health Link.

“The result is that the assessment is being applied to us and other standalone dental plans in the district, while the exchange simultaneously denies us the opportunity to sell [PPACA] complaint pediatric dental on or outside the exchange in the non-group and small group markets,” Album writes in his comment.

The district should only impose a user fee on carriers that can sell plans inside the exchange, Album says.

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