Tale of two insurance exchanges poses mystery for doctors

Kansas and Washington state are heading in two very different directions, but physicians have lingering concerns about coverage and access.

By — Posted Dec. 17, 2012

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If everything goes according to plan, next year Washington state residents will have their own special Web portal, based on online travel booking sites, to shop for health insurance starting with the 2014 coverage year.

Residents of Kansas, meanwhile, will be doing their insurance shopping through an exchange run by the federal government, after a decision by the GOP governor to reject that portion of the Affordable Care Act.

At a time when many states still are formulating their decisions on their exchange approaches, Washington state and Kansas epitomize the very different directions these new marketplaces can take.

And physicians are left in the middle. Doctors have questions and concerns about how exchanges will work.

In Washington state, one of six states that on Dec. 10 obtained conditional approval from the federal government to go ahead with their own state-based exchanges, there’s a lot of anxiety to go along with the excitement for physicians, said Kathryn Kolan, associate director for legislative, regulatory and legal affairs with the Washington State Medical Assn. “I think that everyone’s flying in the dark, including our doctors.”

In authorizing these new marketplaces, the health system reform law gave states the option of developing their own exchanges or forming partnerships with the federal government to launch them. States that don’t take either option will default to a federally controlled exchange.

Such a default appears to be the route for Kansas. Unless Republican Gov. Sam Brownback changes his mind, “I’m anticipating we’ll be a federal exchange,” said Sandy Praeger, the state’s insurance commissioner. This approach is going to be problematic, Praeger said, given that the federal government will have far more influence than if the state had chosen a partnership or state-based exchange.

Brownback’s views largely are in line with other Republican governors, who have insisted that the reform law’s exchange provision is an overreach by the federal government that will cost taxpayers millions of dollars to implement.

Political considerations in a red state

Praeger said political roadblocks impeded Kansas’ efforts to control its own exchange. In conversations with the governor, “his comment to me was that we had a lot of new conservative legislators elected and they didn’t want to have anything to do with Obamacare and didn’t want to do anything to assist in implementation,” she said.

Kansas initially had been one of the early innovators for developing an exchange, receiving a $31.5 million grant from HHS that the governor eventually returned. “We had made fairly good progress. But again, I think our progress on a state exchange was trumped by politics,” Praeger said.

The consequence is the state will end up deferring many responsibilities to the federal government, such as determining whether the health plans on the exchange meet the essential health benefits requirements, Praeger said. Federal officials also will be able to deny access to insurance plans that they determine to be boosting premiums too much.

All state health insurance exchanges must be open for enrollment by October 2013.

It also may be more cumbersome for health plans to get their products approved under a federal exchange, because they will need to be licensed at the state level as well, Praeger said. Discrepancies between the state and federal government over approving plans’ filings could delay their entry onto the exchange.

Additional federal guidance issued by the Obama administration on Dec. 10 clarified that the role and authority of a federally facilitated exchange was limited to managing and certifying qualified health plans.

In a recent statement, Brownback said he wouldn’t support a state-federal partnership exchange model either, but some physicians hope that this is the approach the state eventually chooses. “It seems to us there’s more benefits and fewer unknowns” to the partnership model, said Carolyn Gaughan, executive director of the Kansas Academy of Family Physicians. For example, it would allow the Kansas insurance department to continue some of the important things it does now, such as consumer education, she said, instead of deferring those processes to the federal government.

States rejecting the state-run exchange option have until Feb. 15, 2013, to announce their intentions to pursue partnership exchanges.

Pioneer state forges ahead

Washington state has led the pack from the start on pursuing a state-based exchange. In a statement, Gov. Christine Gregoire said the White House decision to grant it conditional approval was validation that the state was “ahead of the curve … . Through our exchange, we will offer coverage to more than 200,000 uninsured Washingtonians and boost competition in the marketplace.”

The other states receiving conditional approval on Dec. 10 were Colorado, Connecticut, Massachusetts, Maryland and Oregon.

Washington leveraged a series of federal grants totaling $150 million to create an information technology infrastructure and other functionalities to meet the health reform law’s deadlines. All exchanges need to be ready for open enrollment in October 2013 for the 2014 coverage year.

Enrolling through the exchange’s online portal “will be something similar to an Expedia-type experience, where you’re going to be able to go in and do a comparison of plans and look at whether or not you qualify for reduced costs for coverage,” said Michael Marchand, director of communications with the Washington Health Benefit Exchange.

The state has taken several measures to engage physicians in the process. Physicians in some states have expressed concerns that practicing physicians have not been represented adequately in the governance of their states’ exchanges. That’s not the case in Washington state, where a practicing doctor sits on the 11-member exchange board.

Marchand has had conversations with the state’s physicians “to ensure that we’re keeping them abreast of what’s going on. I think with reform as a whole it’s a very interesting time, because the landscape of how health care is being delivered is going to change, and that may mean a lot for physicians organizationally.”

This isn’t just about how patients will be churning between the exchange and Medicaid as people’s incomes change, or how doctors will meet the demands of an expanding patient base under these new marketplaces. It’s also about how they’re going to meet the demands of their businesses, Marchand said.

“A lot of these folks have small clinics where they are employers themselves, and they’re going to have the opportunity [to participate] in the exchange from that angle,” not just from the standpoint of the clients they serve, he said.

Payment and access questions remain, said Kolan, of the Washington state medical society. “We’re not quite sure about reimbursement within the exchange, the contracting between physicians and carriers.” Not only that, but existing physician shortages are fueling ongoing concern about the capacity to take on newly insured patients, she said.

“I think there’s a strong vision as to what it’s going to look like,” but there’s also a struggle to comprehend all of it and how the individual pieces are going to work together, she said.

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CMS nixes partial Medicaid expansion

States seeking more federal guidance on the Affordable Care Act’s Medicaid expansion, health insurance exchange provisions and market reforms got their wish on Dec. 10. An 18-page FAQ released by the Dept. of Health and Human Services clarifies that the law does not allow for a phased-in or partial expansion of Medicaid.

  • States that expand eligibility for their Medicaid programs to a point lower than 133% of the federal poverty level (an effective rate of 138%) would not receive a 100% federal matching rate to pay for the expansion for the first three years.
  • For states that decline full expansion of Medicaid, HHS would consider proposals for partial Medicaid expansions under demonstration projects, but at regular federal matching rates.
  • HHS has no plans to extend deadlines further for states to declare their intentions on exchanges and to submit exchange blueprints. The department previously had extended deadlines on committing to state-based and federal-state partnership exchanges to Dec. 14, 2012, and Feb. 15, 2013, respectively.
  • States are under no deadlines to inform the federal government of their intentions to expand Medicaid.
  • States that decide to expand their Medicaid programs can opt out of the expansion at a later date.
  • HHS expects to issue final rules on essential health benefits, health plan actuarial value and plan rating in early 2013.

Source: Frequently Asked Questions on Exchanges, Market Reforms and Medicaid, Dept. of Health and Human Services, Dec. 10 (link)

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External links

“State Progress on Essential Health Benefits,” State Refor(u)m, online network for health reform implementation, as of Nov. 28 (link)

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