Wisconsin a Model for Creating Healthcare Insurance Exchanges

Wisconsin is a national model for implementing the Patient Protection and Affordable Care Act (ACA).  The state has accepted $37.7 million in federal funding to begin designing the state’s health insurance exchange as required by the law.  But it remains unclear how the funding will be used under the administration of Governor Scott Walker, who opposes the law.  Earlier this year, the Department of Health and Human Services (HHS) announced that Wisconsin, along with Kansas, Maryland, New York, Oklahoma and Oregon, had been selected as “early innovators”, meaning they received $241 million in federal grants to design IT systems for their exchanges.  The systems developed will ultimately be used as models by other states, according to the department.  Wisconsin applied to become an “early innovator” under former Democratic Governor Jim Doyle, who supports the new federal healthcare reform law.

Early innovator states will play a critical role in developing a consumer-friendly marketplace where insurers must compete to deliver the best deal,” said HHS Secretary Kathleen Sebelius.  She noted that the grants will lay the groundwork to “ensure consumers in every state will be able to easily navigate their way through health insurance options.”  Although states must begin operating the exchanges only in 2014, they are required to declare their intent to form them by January 1, 2013.  The federal government will run the exchanges in states that refuse to comply.

Wisconsin Department of Health Secretary Dennis Smith said his state will fulfill that commitment.  “Wisconsin has a bit of a head start,” Smith said, noting how the state began developing an automated eligibility system for its state-based health insurance programs.  “That’s one thing that makes this state a leader.  Part of what we believe is important with this exchange is to demonstrate that it should not be used in a regulatory manner that would disrupt our competitive market.”  Wisconsin applied for the innovator grant while Doyle still was still the state’s governor.  The chosen states were selected based on their technical expertise, readiness to develop information technology to operate the exchanges, the adaptability of their systems to other states and a demonstration that planning already was underway.

Through the exchange, Wisconsin wants to deliver affordable care to as many as 160,000 individuals in the non-group market, 770,000 BadgerCare Plus and Medicaid clients, and one million small-business employees.  “Wisconsin’s proposal envisions a single, intuitive portal through which residents can access subsidized and non-subsidized healthcare and other state-based programs,” according to HHS.  “The exchange will integrate across health and human services programs to promote efficiency and lower overall administrative cost.”

Finding affordable health insurance has long been a challenge for rural Americans, but the Affordable Care Act presents new opportunities for Wisconsin’s farmers and rural residents by creating health-insurance exchanges. Jon Bailey, director of research and analysis for the Center for Rural Affairs, says the new law is ideal for them.  “The groups that the exchange marketplace is meant for, in large numbers, are more predominant in rural areas than in urban areas.  So the small businesses, the people who buy through the individual market, the uninsured, these are the people the exchange marketplace is meant for.  Those who get health insurance through their work probably aren’t going to be involved in this at all.”

The Affordable Care Act gives states multiple options on how to set up the insurance marketplaces, Bailey said.  “Every state is just kind of making that basic decision right now: Do we want to run our own exchange or do we want the federal government to come in and do it?  There’s some other basic questions: Do we want to cooperate with other states?  Have a regional exchange?  Things like that.”

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