New health care exchange called: MI Health Marketplace

MICHIGAN: Legislation has been introduced to set up a health care exchange called the MI Health Marketplace. It is estimated that as many as 520,000 individuals who are uninsured or who come from other plans would come onto the MI Health Marketplace in its initial year of operation, and another 500,000 would be Medicaid eligible. Participants could total more than 1 million participants in the first year. The exchange, which would be established as a nonprofit, will serve individuals and small businesses. The nonprofit would be governed by a board, to be appointed by the Governor, and have the ability to appoint an executive director. Federal funds will pay for the operation of the exchange through 2014, and the bill would require insurers to be assessed moving forward. No budget has been spelled out, leaving an open question as to how much the exchange will cost. The Snyder administration expects to pass an exchange bill by the end of November. Many in our industry are working with the sponsors of the bill on amendments.

It is our opinion that health insurance companies, will provide the required medical plans within the exchange, (Gold, Bronze and Platinum) yet for those who qualify provide another set of plans outside the exchange in a free market setting, allowing for lower premiums and more competitive product selection. Much of the same is already happening in Massachusetts and Utah where the federal “health care reform law” was passed and modeled after. Currently in Michigan, if you can not qualify for a medically underwritten medical plan, your only choice would be to purchase health care insurance at an increased rate, from a non-profit, such as Blue Cross and Blue Shield of Michigan or apply for Medicaid. For those of you reading this, what changed with the passage of the new federal health care reform law?

In other news Federal:

Week of October 10, 2011

Long-awaited recommendations concerning "essential health benefits" under the Affordable Care Act (ACA) were released last week (see below). The Institute of Medicine (IOM) recommendations will be used by the Department of Health and Human Services (HHS) to help guide the process of determining what should be included in an essential health benefits package starting in 2014. America's Health Insurance Plans (AHIP) released a statement on the recommendations and the need to strike a balance between cost of coverage and comprehensive coverage.

In other news, a special edition of Health Affairs was released last week with a number of articles that shed more light on the problem of racial and ethnic disparities in health care. Among the findings are that health plans have made considerable progress in the collection of data on race and ethnicity to enable efforts to reduce disparities. Aetna was an early adopter of data collection efforts and made the special Health Affairs edition possible with support through the Aetna Foundation.

IOM's highly anticipated report on the development of the “essential health benefits” package was released last week. The report comes in response to a request made last November by Health and Human Services (HHS). HHS requested that the IOM convene a study committee to advise the Secretary on the criteria and methodology for determining the essential health benefits package. Importantly, the 297-page report doesn’t actually say what the essential health benefits should be. It just recommends the methodology HHS should use to determine the package. The two big take-aways from the IOM recommendations: benefits should be based on the “typical” small employer plan, and states should have some flexibility to determine what is essential. The report further states that only medically necessary services for individuals should be included as essential. And, in defining the essential health benefits, HHS should first set a cost target before filling in benefits to meet that goal. The IOM has recommended that HHS should have the initial benefit package by May 1, 2012, and it should be as specific as possible.

The U.S. Supreme Court opened its new term last week with a case concerning whether individual providers and beneficiaries have the right to legally challenge the adequacy of Medicaid payments in California. The case, Douglas v. Independent Living Center of Southern California, involves providers and patients who claim California cut Medicaid reimbursement rates so low in 2008 and 2009 that they violated federal requirements that payments be sufficient to avoid disrupting patient access to care. Many of the questions from the justices focused on the HHS process for enforcing Medicaid requirements in the states. HHS issued a rule earlier this year that, for the first time, requires Medicaid reimbursements be “sufficient to enlist enough providers so that care and services are available.” That rule was issued, in part, to try to dissuade the Supreme Court from taking up the Douglas case.

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