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NCOIL Legislators Hear From Experts on Health Exchanges

Panelists were: Joel Ario, Director, Office of Insurance Exchanges, U.S. Department of Health and Human Services; Susan Voss, Commissioner of Insurance, Iowa Insurance Division;...
November 23, 2010

The National Conference of Insurance Legislators hosted a panel discussion during their annual meeting entitled "Health Insurance Exchanges: State Legislator Responsibilities."

Panelists were: Joel Ario, Director, Office of Insurance Exchanges, U.S. Department of Health and Human Services; Susan Voss, Commissioner of Insurance, Iowa Insurance Division; Speaker David Clark, Utah House of Representatives; Catherine Bresler, VP, Counsel and Government Relations, Trustmark Insurance Company; Rosemarie Day, President, Day Health Strategies; Stacey Pogue, Senior Policy Analyst, Center for Public Policy Priorities; and Josh Goldberg, Health Policy and Legislative Analyst, National Association of Insurance Commissioners.

Director Ario began by announcing that that the law allows states enough flexibility to set up an exchange that best meets the needs of their consumers and therefore the "Utah exchange model" would comply with the spirit of the law. This came as welcome news because many states are looking at the Utah exchange as a model. Commissioner Voss reiterated Director Ario's point that states must have options when setting up exchanges and that producers should be involved. She said that we must keep in mind that not everybody is "tech savvy" so the exchanges must include a component to reach out to people other than through a computer.

Utah House Speaker David Clark said he was happy to hear Director Ario say that the Utah model is acceptable and warned the legislators, "If you have not already begun the process of setting up an exchange, you are already two years too late." He also emphasized that government should act as a facilitator, not an operator. Speaker Clark said agents, brokers and carrier distribution systems are all incorporated in the Utah exchange. One thing that really hit home with the legislators was the stark contrast in the costs between the Utah and Massachusetts exchanges. Representative Wren (AL) asked about initial and ongoing costs of the exchanges. In Massachusetts, the exchange received an initial $25 million but they didn't spend it all. They spent around $15 million or so and put the rest in reserves. The annual operating cost for the MA exchange is around $30 million per year. Most of that is for subsidies and the call center. Utah, on the other hand, started out with $600,000 and operates on about $400,000 per year.

PIA National's Government Affairs Committee is continuing to monitor these discussions and recommends that our affiliates work with their regulators and legislators now on how we can be most helpful in setting up exchanges.

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