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Exchange Clock

David P. Lind BenchmarkThe Supreme Court has ruled on the constitutionality of the health reform law. Now what? Iowa employers, insurance carriers, health care providers (among others) need to continue the implementation process required under this law. So does the state of Iowa.

For example, will Iowa have its’ own insurance exchange for individuals and small businesses, or will it need to defer to a federal-based exchange? At this point, we don’t really know. We do know that if Iowa wishes to operate a state-based exchange on January 1, 2014, it must submit a completed Exchange Blueprint to the HHS no later than November 16, 2012. This notification deadline will be shortly after the national elections…hmmm.

Meanwhile, the clock is ticking…

To date, the Iowa legislature has not passed legislation to approve its’ own exchange, which is an important part of the process. However, without such legislation, the Governor may issue an Executive Order to establish the exchange. Whether this will happen…and if so, when, is uncertain at this time.

Establishing an exchange requires a great amount of thought and study before implementation. As one can imagine, there will be both intentional and unintentional consequences to the Iowa insurance markets when implementing an exchange. Each state will need to consider key issues prior to establishing their own exchange:

  • Whether insurance companies in Iowa participating in the exchange should be required to offer all health plans sold in the exchange to individuals or small employers purchasing coverage outside the exchange.
  • Whether the individual and small employer markets should be placed entirely inside the exchange.
  • Whether the individual and small employer markets should be standardized inside the exchange or inside and outside the exchange.
  • Whether to merge the individual and small employer markets for rating purposes (how will this affect premiums for both markets?)
  • Whether to increase the size of small employers from an average of at least one but not more than 50 employees to an average of at least one but not more than 100 employees prior to January 1, 2016.
  • How to account for sole proprietors in defining “small employers”.

There are a host of other key (and complicated) questions that Iowa and all other states must decide before pursuing their own insurance exchange. Needless to say, there will be heavy lifting by key stakeholders prior to November 16 of this year. Will Iowa be ready?

The clock continues to tick.

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