State Health Insurance Plans Due to Feds

Monday (October 1) marks a milestone in the implementation of President Obama’s health care law, or at least it’s a good day to gauge the current attitude of the nation’s governors toward the law.

The U.S. Department of Health and Human Services (HHS) asked states to submit their benchmark health insurance plans — or “minimum benefits” — that would serve as models for plans offered by their state insurance exchanges. Those exchanges are an essential part of the president’s Affordable Care Act, and one of the main instruments to help the uninsured enroll in health insurance plans.

States are supposed to working on setting up their health insurance exchanges, which will be web-based marketplaces in each state where small businesses and individuals can shop for private health insurance policies. The exchanges are scheduled to be up and running by January 2014.

States can choose not to go that route, in which case the federal government would operate their exchanges. Another option is states can build their exchanges in partnership with the federal government.

The federal government has listed 10 categories of coverage that all insurance plans must include: hospitalization, emergency care, out-patient services, maternity and newborn care, mental health and substance abuse services, prescription drugs, laboratory testing, preventive and wellness care, pediatric services (including dental and vision examinations), rehabilitative care and ongoing support services, such as care for children with developmental disabilities. States were asked to select a model in each of these categories from existing health insurance plans offered in their states.

HHS set Monday as a target date for these plans, although a spokeswoman said Thursday that it was only a suggestion to keep the process on pace for 2014. Some states with Republican governors who continue to oppose the Affordable Care Act are expected to let the deadline pass without submitting a plan. Kansas falls into that category. “The Kansas governor is not going to file,” Sandy Praeger, the state’s independently elected state insurance commissioner, said this week.

Praeger’s office actually went through the process of selecting a benchmark plan. It commissioned an actuarial study and conducted a public hearing. She submitted the choice to Governor Sam Brownback on Monday. Her office chose the state’s most popular small group plan, which is the one that HHS would end up selecting by default, if the state doesn’t act.

Although Praeger, a self-described “moderate Republican,” says she expects most of the 26 Republican governors to follow Brownback’s example, some may not. John Francini, New Mexico’s insurance commissioner, says an insurance commission task force in his state is set to vote on its choice of a benchmark plan Friday. Francini says he expects Governor Susana Martinez to send that choice onto HHS.

Just because some states won’t submit plans to HHS Monday doesn’t mean they have totally washed their hands of insurance exchanges. Praeger says her office is still working on a “blueprint” for a health insurance exchange to be developed in partnership with HHS. November 16 is the deadline for that option, which is after the elections. Praeger says that if Obama wins reelection, she suspects a number of the hold-out Republican governors will then accept a partnership arrangement. “I know people in Kansas are going to prefer to call our office rather than some federal call-in center.”

But time is growing short, says Praeger. If states wait until the election to start working on their partnership blueprints, they won’t have enough time to meet the deadline.