Senate Finance Committee Hearing
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Chairman Baucus, Ranking Member Hatch and Members of the
Background
In
On
The Arizona Health Insurance Exchange was being designed to be a fully integrated system that would allow consumers and small employers to find information, determine eligibility for and enroll in
Exchange planning and design work operated under the following principles:
* Build on
* Support the Market Facilitator Approach.
* Maximize Consumer Choice and Competition.
* Impose Minimal Regulations and Reporting Requirements.
With more than 35 health insurance companies actively writing in the small group market and more than 15 insurers actively doing business in the individual market,
Stakeholder Engagement
Because no state has established a Health Insurance Exchange that is fully compliant with the requirements contained in the ACA, stakeholder involvement was a critical component of the Exchange planning and design process. To facilitate input on the Exchange core functions,
*
* Health Insurance Brokers and Agents
* Tribes and Tribal Organizations
* Consumer Advocacy Organizations
Each work group met frequently on the key design and operational issues in their respective areas and provided input to the
The consumer work group focused on the Navigator program, public education and outreach and ensuring the website design would be user friendly.
By involving stakeholders in the planning and design process from the beginning ensured that operational and technical issues were raised and resolved prior to implementation. It also made it more likely that insurers, brokers and agents would participate in the Arizona Health Insurance Exchange. No Exchange model can be successful without the active participation from insurance companies, insurance agents and brokers.
The Exchange as a Tool to Address the Uninsured Rate
More than 1.2 million
Our research indicated that a well designed, user friendly Health Insurance Exchange could cause a significant reduction in the number of uninsured
Focus on
To accomplish the goal of reducing the uninsured,
IT Gap Analysis
* Provide a detailed assessment of Federal reform requirements and incorporate updated Federal guidance;
* Inventory and assess relevant
* Create a technology gap analysis to inform considerations of alternative options;
* Evaluate the potential for the Arizona Technical Eligibility Computer System (AZTECS) database to meet ACA requirements and assess the feasibility of using Health-e-
* Provide options for consideration to implement an Exchange and
Identifying Options
The IT gap analysis identified five options with an analysis of associated resources, estimated costs and risks. The options included:
1. Defer to the Federally-facilitated Exchange
2. Join a Multi-State Solution
3. Leverage Existing State Systems and Fill Gaps with
4. Leverage Existing State Systems and Fill Gaps by Borrowing
5. Build a Solution from Scratch
The option analysis found the least risky options were defer to the Federally-facilitated Exchange and leverage existing state systems and fill gaps with new development. Both options provided the most likely chance of meeting the ACA timelines and were the least costly.
Design and Planning
In terms of a state-based approach, leveraging existing state systems and filling the gaps with products developed by private sector vendors was determined to be the option that had the lowest costs, most likelihood of being ready on time and would provide
Exchange planning and Establishment grant funds were utilized to design an Arizona Health Insurance Exchange that would integrate the Health-e-
This would provide
For those individuals ineligible for
The SHOP Exchange was designed to provide maximum choice and flexibility for both the employer and the employee. The employer would have been able to control their costs by moving to a defined contribution approach and provide employees with more choices of health plans than is typically offered in the small group market today. The goal was to reduce the administrative burden small employers face in providing health insurance for their employees and allow the employer to control their costs by allowing the employer to contribute a fixed dollar amount towards the total health insurance premium.
As essential as getting the IT infrastructure right, ensuring that there would be sufficient qualified health plans (QHP) participating on the Arizona Health Insurance Exchange was equally vital.
In line with the "impose minimal regulatory and reporting requirements" principle, the qualifications to be a QHP were based on the minimum requirements laid out in the ACA and state law. To the greatest extent possible, health insurers would provide information already submitted for other filings and attest that the QHP met the remaining requirements. The goal was to make the QHP process simple and not so burdensome that it would discourage health insurers from participating.
If
To further simplify the certification process, the
By working closely with the commercial health insurers, AHCCCS managed care organizations and the Arizona CO-OP, preliminary estimates indicated that there would have been more than 100 QHPs participating in the Individual Exchange and the SHOP. This level of competition would have helped keep premiums affordable and maximize the choices and options for individuals and small employers. The web site and the consumer assistance center would have provided the decision support tools necessary for consumers to make an informed decision on their health insurance options.
To ensure that the Arizona Health Insurance Exchange would be fully compliant with the requirements of ACA and would be operational by open enrollment, Arizona Exchange staff and consultants participated in every conference, webinar, conference call and work group put on by CCIIO. Not only did this active participation allow
Too Many Uncertainties to Move Ahead
Arizona Exchange staff and consultants worked diligently on a State-based Exchange model that would conform with
On
The delay in releasing all necessary Exchange and
Not only are these Draft Rules important to Exchange operations, but are necessary for insurance companies to develop products for the individual and small group insurance markets on and off the Exchange. One large, national insurance company has commented that they will need twelve weeks from the time the Rules are finalized to bring a product to market. The delay in issuing these Rules will make it difficult for insurers to meet the filing deadlines for QHP certification for the initial open enrollment period. The delay in finalizing the HHS Notice of Benefit and Payment Parameters for 2014 impacts the risk adjustment, risk corridors and transitional reinsurance programs and may cause insurance actuaries to be more cautious in setting premiums for the upcoming year.
It was also unclear the status of development of a number of federal services that a State-based Exchange would be required to use. These required federal services include:
* Federal Data Services Hub
* Advanced Premium Tax Credit and Cost Sharing Subsidy Service
* Actuarial Value Calculator
* Minimum Value Calculator
* Modified Adjusted Gross Income Business Rules
All of these services are required as part of any Exchange model. While
In November, 2012, the NAIC informed
Read this original document at: http://www.finance.senate.gov/imo/media/doc/Don%20Hughes%20FFE%20Finance%20Committee%20Testimony%20(white)%20(2)3.pdf
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