State begins its work on health care exchange

JACKSON – Gov. Haley Barbour has been one of the toughest critics of the nation’s massive health care overhaul, even suing to keep some provisions from taking effect.
But that does not mean Barbour wants to throw out the entire law.
“If the health care law gets repealed or thrown out in court, I would still be for the health care exchanges,” Barbour said recently during a break in a seminar on the new health care law.
In recent years, Barbour has tried to pass his own version of the exchange through the Mississippi Legislature.
He said it would allow small businesses to get a better rates on health insurance for their employees by being part of a much larger group buying coverage.
Plus, Barbour’s plans, like the federal law, give tax breaks to some small businesses for providing coverage. The Barbour plan has passed the state Senate but died in the House.
On the federal level, the exchanges are a key part of the new law, parts of which are being challenged in court by about 20 states, including Mississippi.
States can either set up their own exchanges or leave it to the federal government to establish one. Mississippi plans to establish its own exchange.
Aaron Sisk, senior staff attorney with the Mississippi Department of Insurance, described the exchanges as “a marketplace for health insurance … a one-stop shop.”
Presumably, costs will be lower because of the large volume of people buying through the exchange.
The law calls for the exchanges to be operating by January 2014. But the states are supposed to have their exchanges in place by January 2013.
That means, more than likely, the Mississippi Legislature will deal with the issue during the 2011 and 2012 sessions. During the 2010 session, the Legislature passed a bill to prevent companies participating in the exchange from offering abortion coverage.
The federal legislation gives the states the option to restrict abortion coverage.
Ed Sivak, director of the Mississippi Economic Policy Center, said there are benefits to each state establishing its own exchange, especially since the states will have regulatory duties over the insurance companies that operate outside of the exchange.
“It makes sense to get this right in Mississippi as the federal exchange would add another level,” Sivak said.
The federal law mandates that most people buy insurance. Presumably, people not covered by their employer would look to the exchange for the most affordable option.
People buying insurance on the exchange can choose from several options. They range from a policy that provides a high level of coverage – known as a platinum plan – to lesser gold, silver and bronze choices. Plans that basically would provide catastrophic coverage also will be offered.
Sisk said young, healthy people who would seldom need insurance might choose the catastrophic coverage that would cover major medical bills from an accident such as a car wreck or from a major illness.
Sisk also said many people in Mississippi would be eligible for a federal subsidy to help them purchase insurance. A family of four without insurance and with a household income of about $88,000 would be eligible for a subsidy to cover part of the cost, he said.
To determine eligibility for a subsidy, a person is supposed to be able to go to the Internet, select a plan, and provide information about income level. It is not clear how people will complete the process if they do not have access to a computer. That will presumably be worked out before 2014.
During the past session, the Mississippi Legislature set up a committee to study the issues surrounding the exchange.
Sivak said a key in establishing an exchange is to ensure that the purchasers are not just sick people. In that case, he said, the cost of insurance in the exchange would go up.
To prevent that, he added, state officials might want to consider ensuring that companies operating in the exchange and outside of it offer the same services and operate by the same rules.
Under the new federal law, most people are required to have health insurance.
But Sisk pointed out that the penalties are low for those who do not buy health insurance – $695 per year. He said some people might choose to pay the penalty instead of buying what might be more expensive health insurance.
Plus, the law requires companies that employs more than 50 full-time workers to provide health insurance. But Sisk said some companies might pay the penalty and urge their workers to get insurance through the exchange.

Bobby Harrison / Daily Journal Jackson Bureau