Federal Health Care Reform – 2012 Session

Part of the federal government’s health care reforms includes a mandate for states to establish Health Benefit Exchanges by 2014.

The Purpose of the Exchanges: The Exchanges will serve as markets to sell health insurance plans to qualified individuals and employers. Health plans in this market have to provide buyers with a base set of benefits deemed necessary by the federal government and state (any extra coverage required by the state will not be funded federally). This system is designed to encourage competition, providing more choices and thereby lowering costs for purchasers. Not all health plans have to fall under the Exchange, and specifically this doesn’t affect employer-provided plans. It is simply meant for individuals that do not have the means for acquiring health insurance or don’t have employers that provide it. 

What the Federal Government Expects of the State: According to federal mandate, if the federal government determines that a state has not undergone necessary steps to begin their own Exchange program by 2013, the Secretary of Health and Human Services will set up a program for the state. Moreover, if the state wants to receive funding for the Exchange’s establishment, they must begin initial operations for the project by June 29, 2012. For this reason, the issue of the Exchange’s establishment will be an important subject at this year’s Session.

What Virginia Needs to Decide: The Virginia Health Reform Initiative Advisory Council has been planning a strategy for the Exchange’s implementation. The VHRI was set up by Governor McDonnell and the council is responsible for making recommendations on how to implement the Exchange program. During Session, the General Assembly will have to decide on a number of issues concerning this implementation, such as:

  • which organization will administer the Exchange, and should it be a public or private group?
  • what requirements should the state place on health plans sold through the Exchange?
  • and, how will the Exchange operations be funded?

Obviously there are a lot of complex issues, not limited to the ones listed above, that will have to be addressed once the 2012 Session arrives. This will also be an important budget issue since the federal government obviously won’t be able to provide funding for this entire program. If you have any questions or concerns, please don’t hesitate to email me at dave@davealbo.com.

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