State-based marketplace (SBM) leaders convened in Washington, DC last week to share experiences and ideas and meet with key Congressional staff in advance of this year’s open enrollment period.
SBMs, which exercise total control over their health insurance marketplaces in contrast to states that use the federal marketplace, are making considerable progress in reaching and serving the uninsured. However, confusion fostered by unclear federal policies — such as the recent public charge rule and the looming decision in Texas v Azar that could strike down the Affordable Care Act – has created a cloud of uncertainty that challenges all states.
Today, 13 states operate SBMs, including Nevada that transitioned to this model for the 2020 open enrollment season. Additionally, four states (ME, NJ, NM, and PA) have announced plans to transition to the SBM model, three of which are currently operating as hybrid SBM models that use the federal platform (SBM-FPs) during this enrollment season.
Officials from the newly transitioning states – New Jersey and Pennsylvania – were welcomed at the meetings. They explained that a desire for stable insurance markets, state sovereignty over their marketplaces, and the potential for financial savings drove enactment of their new laws to transition to the SBM model.
Pennsylvania Democrat Gov. Tom Wolf’s proposal to establish an SBM and a reinsurance program received unanimous support from the state’s Republican-controlled legislature. In New Jersey, the decision to launch an SBM came on the heels of earlier efforts to restore the individual mandate requiring coverage and a successful federal waiver application to begin a reinsurance program.
By “owning” their marketplaces through the SBM model, state officials indicated they believe they will more efficiently and effectively serve their constituencies through implementation of state-focused policies and tailored outreach that were not possible when they used the federally facilitated marketplace (FFM).
Data shared at the meetings underscored the greater success that SBM states have had in serving their populations. (View a slideshow about SBM advantages here.) Unlike states that use the FFM, SBM states have the flexibility to address the health insurance needs of local populations and, as a result, have:
- Maintained steady enrollment steady;
- Been more successful in lowering their states’ uninsured rates; and
- Helped more unsubsidized consumers find coverage.
While SBM states have held down premium cost growth better than FFM states, SBM leaders expressed urgency to do more to make coverage affordable, especially for middle-income consumers. This slide highlights a number of strategies SBM states are pursuing.
Five states are operating reinsurance programs – that subsidize coverage of high-cost enrollees – in partnership with the federal government and five more states will join their ranks in the 2020 plan year. The results officials presented made clear that reinsurance programs do lead to significant premium reductions and provides a tangible initiative for state insurance departments to hold insurers accountable through quantifiable premium reductions. But, state officials were quick to point out, state-run reinsurance programs are time-limited or are simply unaffordable for many states. The need to restore and make permanent a federally funded reinsurance program remains a priority even as states pursue other strategies to address affordability.
The message from SBM leaders who attended the Washington, DC meeting was clear – SBMs are succeeding, sustainable, and growing in number because they are on the ground, fine-tuning their operations, and growing their capacity to address local needs.