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| Key Issue to be addressed | Governor’s Bill Draft LBD 6 | Senate Bill 5652 (Seward, Hannon) | Explanation |
| Is the exchange housed in an agency that is both nimble enough to perform the necessary complex tasks and sufficiently accountable to the public and policy makers? | Both bills create a new state authority to house the exchange. We agree that, while not perfect, an authority best combines responsiveness and accountability with needed flexibility. | ||
| Is the governance board properly structured to serve in the best interests of the consumer, patients, workers and small employers? Do conflict of interest provisions prohibit the participation of those who stand to financially gain from the exchange’s decisions? | Both bills rely on existing public authorities law to prevent conflict of interest. We strongly prefer language adopted by California in its enacted legislation that specifically prohibits anyone representing carriers, brokers, health facilities or health care providers. Input from such stakeholders is best provided through an advisory committee, though we think the Senate’s bill creates too many, and the Governor’s proposed advisory committee should be larger. | ||
| Is there a single, statewide exchange that accommodates regional differences? | Both bills foresee a single statewide exchange that accommodates regional needs and differences. | ||
| Does the exchange have the power to combine the SHOP and individual exchanges if appropriate? | Because larger pools spread the risk and lower costs, there may be value to merging the individual and SHOP markets. The Governor’s draft allows the exchange to merge the markets if it deems it appropriate. The Senate bill prohibits such merger. | ||
| Is the exchange structured to emphasize simplicity for consumers? | A major goal of the Affordable Care Act is to make information about insurance more accessible. Consumers must be able to easily access not only information such as premium rates and enrollment forms, but also critical additional information, such as each plan’s benefits, provider networks, appeals processes and consumer satisfaction measures. This information should be available in multiple languages and literacy levels. The Governor’s bill requires the exchange to rate plans and utilize a standard format for presenting health benefit options, as required by the ACA. The Senate bill does not address these issues. | ||
| Does the exchange have the power to actively negotiate on behalf of consumers and small employers and to provide consumers useful information about the quality and comprehensiveness of insurance products? |
To best promote high quality care, innovative delivery system reforms, and for slowing the rate of growth of health care costs, exchanges should have the authority to be “active purchasers” when selecting participating health plans, as opposed to being required to allow every health plan that can meet the minimum requirements to participate. With this authority, the exchange could use its considerable market power and certification authority to limit exchange participation only to plans with a high level of quality and/or value. The Governor’s draft allows such “selective contracting,” the Senate bill makes it conditional on future legislation. |
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| Are Medicaid and other public insurance programs seamlessly integrated with the exchange? | It will be critical that the exchange is well integrated with the state Medicaid program to ensure seamless enrollment. Further, because many individuals will move between Medicaid and the exchange over time due to fluctuation in income, it is crucial that exchange rules allow for coordination of plans, benefits, and physician networks to ensure continuous coverage. Both bills provide for the exchange to screen individuals to determine eligibility for Medicaid, CHIP and other public insurance programs and enroll them if eligible. | ||
| Does the exchange have a continuous and stable source of funding? |
To facilitate good management and planning, it is important that the exchanges have a predictable and steady source of funding. Otherwise, there is a risk that funding will become vulnerable to the often unpredictable legislative appropriations process. One option is to establish fees on insurers, which should be assessed on plans inside and outside the exchange, so carriers outside the exchange are not afforded an unfair financial advantage that could lead to adverse selection. Both bills call for a study of how to make the exchange self-sufficient. The Governor’s draft foresees an insurance assessment as an option. The Senate bill specifically prohibits assessments. |