Running your own exchange

States had three major options for their health insurance exchanges. They can use Healthcare.gov and outsource all operations to the federal government. They can have a partnership exchange where the front end is Healthcare.gov while the states do some of the back end work. Or they can run their own exchanges. Depending on circumstances and values, any and all of these choices can make a lot of sense.

New Jersey is currently on Healthcare.gov. New Jersey approves plans according to state based regulations but they follow federal rules on open enrollment periods, advertising and outreach, auto-enrollment and all the other details of running an exchange.

The governor wants to change that. According to Politico, Governor Murphy (D-NJ) wants to get a state based exchange up and running fast.

New Jersey Gov. Phil Murphy on Friday proposed creating a state-based health exchange, saying the state could offer better services while guarding the Affordable Care Act against the Trump administration‘s efforts to undermine it.

The Democratic governor sent a declaration of intent letter to the federal Centers for Medicare and Medicaid Services, formally proposing the exchange. Murphy said he believes the state can overcome the regulatory hurdles and get the exchange up and running in time to register for the fall 2020 enrollment period….

New Jersey wants to buy flexibility. They want to be able to set a longer open enrollment period. They want to control their advertising and navigator budget. They want to be able to do something other than just a 1332 reinsurance waiver. New Mexico and Nevada are also in the process of transitioning out of Healthcare.gov and to their own exchanges.

State based exchanges are, in my opinion, a near necessary but not sufficient condition for a successful 1332 waiver that is more than just reinsurance. CMS has indicated that they are able to do some customization of Healthcare.gov for new waivers but I would not want to bet a major state wide program with significant political downside to CMS. It is not a matter of worrying about sabotage or shoddy work; it is a matter that CMS is trying to please thirty eight masters on Healthcare.gov and there can truly only be one top priority for a system enhancement. Assuming the development process goes perfectly, that can be fine if there are multiple high priority demands, but assuming the development process goes perfectly is a gut demolishing assumption.

The only way that New Jersey can possibly stand up an exchange that can accept finalized plans in October 2020 and open up to the public on November 1st is if they buy an Exchange out of the box. Several states have solid technology. This would lower technological risk and offer a lower cost solution than building from scratch.

State based exchanges look like they will become more popular as they allow states more flexibility to customize their local solutions.






2 replies
  1. 1
    WhatsMyNym says:

    The current system WA is using is pretty good. Had to work some bugs out, but stable and offers useful features; like comparisons between plans and filters for selection of plans that can be changed easily while searching.

  2. 2
    Duane says:

    Does it cost more for state’s to run an exchange? Not that it wouldn’t be worth it to avoid the mendacity of republicans.

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