While the Affordable Care Act or Obamacare is unpopular with most North Dakotans, the constitutionality of the health care reform was upheld by the Supreme Court and arepeal seems unlikely after the November elections. Like it or not, governors and state legislatures are now faced with the decision of whether to run their own insurance exchanges under the law or let the federal government run their state exchange for them.
This is a political blog, but we’re not trying to take sides — we’re looking for the best solution for North Dakota. Blue Cross Blue Shield of North Dakota is committed to being ready when most of the law goes into effect on January 1, 2014. But there is plenty of work to do before then. My role at BCBSND is as manager of government relations, so I’m seeing the impact of the law firsthand.
Insurance companies must design new insurance products based on Essential Health Benefits that have not been approved yet, design computer changes and submit new plans and insurance for approval by the North Dakota Insurance Department. This all needs to be done before October 1, 2013 — less than a year from now. Many of the federal regulations that will govern the law have also not been finalized yet.
One part of the law that has received plenty of media attention is the online Health Insurance Exchange. Individuals and small groups seeking insurance options can visit an online state exchange to:
- determine eligibility for Medicare, Medicaid or Healthy Steps
- determine eligibility for a subsidy and how much
- compare all plan options of coverage in four levels.
Federal grants are available to build state exchanges. Whether the exchange is operated by the federal government or the state, the exchange must be self-sustaining starting in 2015, meaning that people in the state will ultimately have to pay for the operating costs of the exchange, even if it is operated by the federal government.
We believe North Dakota should have a state-run exchange. Here’s why:
State control — The health law provides state flexibility for operating the exchange. Any changes in this flexibility would require a change in federal law and could not be done by simply issuing new regulations. This would allow North Dakota to choose what is best for North Dakota and not what may be better for New York. The state exchange bill that was defeated in November 2011 in the North Dakota House specified that all qualified health plans must be able to be offered by insurers in the exchange. The federal government has hinted that it may limit the number of plan options. The government could even elect to not allow any North Dakota insurers into a federally-run North Dakota exchange. In a North Dakota-run exchange all insurance products would be permitted within the exchange, giving people more choices.
Dual regulation — Insurance regulation has historically been the responsibility of the state insurance department. Establishing a federal exchange could result in dual regulation — by both the state and the federal government. Insurance products might have to be submitted to both the state insurance department and also the federal exchange for approval, resulting in higher costs and lost time. Establishing a federally-run exchange will result in the state abdicating its historic preservation of insurance regulation. If people have insurance problems, will they have to deal with both the state AND the federal government?
Costs — North Dakotans will bear the operating costs. Who do you think will be most conscious of people’s concerns for these costs — a North Dakota exchange board made up of North Dakotans or the federal exchange?
Another option being offered to states is a Partnership Exchange, which allows the state to retain the authority to approve plans, rates and other general plan management options, including determining what products are permitted. The rest would be operated by the federal government. We believe this is the best transitional option instead of a federal exchange. It would hopefully prevent dual regulation and reduce exchange operating costs. North Dakota could later elect to take over management of its own exchange.
We believe that North Dakotans are best served by a state exchange or a partnership exchange offering some choice and flexibility. We urge state policymakers to consider all the facts before abdicating the state’s authority to the federal government. What do you think?
Rod St. Aubyn is manager of government relations at Blue Cross Blue Shield of North Dakota.