Establishing the Exchange
On June 2, 2011, Governor Robert Bentley (R) issued Executive Order 17 which created the Alabama Health Insurance Exchange Study Commission to recommend how Alabama should establish a health insurance exchange.1 The Governor has publicly supported Alabama’s implementation of a state-based health insurance exchange.2 While legislation to establish a state exchange failed at the close of the 2011 legislative session, a similar bill (HB 245) was introduced in February 2012.3,4
After meeting for three months, the 15-member Health Insurance Exchange Study Commission released final recommendations in late November to the Governor and Legislature endorsing the establishment of the “Alabama Health Insurance Marketplace.”5 Additional recommendations include, establishing a new quasi-public authority to operate the exchange, following a free market facilitator model, establishing one administrative entity to oversee both the individual and small business exchanges while keeping the risk-pools for both separate, and funding the exchange through fees on all products sold in the individual and small group markets inside and outside the exchange. The Commission was able to leverage analyses completed by the Alabama Department of Insurance and subcontractors earlier in 2011, which examined the existing insurance market and available health care benefit programs, explored exchange design options, and assessed Exchange financing functions.6
Information Technology: In February 2012, the Department of Insurance released a Request for Information on the information technology systems necessary to develop the state’s exchange.7 The state anticipates leveraging existing technology infrastructure to build components of the exchange related to screening, applications, and eligibility determinations. Alabama is also focusing on a significant Medicaid eligibility system upgrade which will seamlessly integrate with the Children’s Health Insurance Program and together will interface with the exchange. The Alabama Medicaid Agency released a Request for Proposals earlier this year soliciting subcontractors to implement the new system which will meet future exchange interoperability standards.8 Work on the Medicaid eligibility system is anticipated to begin in April 2012. Alabama is also participating in the “Enroll UX 2014” project, which is a public-private partnership creating design standards for exchanges that all states can use.9
Exchange Funding
The Alabama Department of Insurance received a federal Exchange Planning grant of $1 million in 2010. In November 2011, the Department was awarded an $8.6 million federal Level One Establishment grant to support contracts and activities around exchange implementation.10
Alabama, along with nine other states, is receiving technical assistance from the Robert Wood Johnson Foundation through the State Health Reform Assistance Network; this assistance includes help with setting up health insurance exchanges, expanding Medicaid to newly eligible populations, streamlining eligibility and enrollment systems, instituting insurance market reforms and using data to drive decisions.11
Next Steps
The Department of Insurance continues planning for the implementation of an exchange, including by hiring staff, and intends to engage stakeholders through the creation of a stakeholder work group. The Commission’s recommendations will likely serve as the basis for legislation establishing a state-based exchange in the 2012 legislative session. However, the Governor may wait for the Supreme Court decision expected in June before moving with implementation.12 Without exchange legislation pending, there is an increased likelihood Alabama will not meet the federal timetable for implementation. The state has until January 1, 2013, to create a state-based exchange that the U.S. Department of Health and Human Services approves as fully or conditionally operational. If not approved, the federal government will assume responsibility for running a health insurance exchange in the state.
Additional information about Alabama’s health insurance exchange efforts can be found at:
http://www.aldoi.gov/Consumers/HealthInsReform.aspx
1. Executive Order 17 issued on June 2, 2011.
http://governor.alabama.gov/news/news_detail.aspx?ID=5164
2. Chandler, K. “Alabama Governor say Insurance Exchange should aim to make coverage affordable.”
The Birmingham News. September 16, 2011.
http://blog.al.com/spotnews/2011/09/alabama_governor_says_insuranc.html
3. HB 245. Legislation to establish the Alabama Health Exchange. 2012 Regular session.
http://alisondb.legislature.state.al.us/acas/ViewBillsStatusACASLogin.asp?BillNumber=HB245
4.
HB 401. 2011 legislation to establish the Alabama Health Exchange.
5. Alabama Health Insurance Exchange Study Commission Recommendations. Alabama Department of Insurance. November 2011.
http://www.governor.alabama.gov/pdfs/HIXStudyCommissionReport.pdf
6. Alabama Exchange Planning Grant, Quarter 2 Report. (1/1/2011-3/31/2011)
http://www.aldoi.gov/PDF/Consumers/SQReport.pdf
7. Request for Information. Department of Insurance. Office of the Alabama Health Insurance Exchange. February 23, 2012.
http://www.aldoi.gov/PDF/Consumers/RFI-Alabama-HIX-14.pdf
8. Request for Proposal for the Medicaid Eligibility Determination System. Alabama Medicaid Agency. January 5, 2012.
http://medicaid.alabama.gov/documents/2.0_Newsroom/2.4_Procurement/2.4_Med_Elig_Deter_Sys_RFP_Updated_1-5-12.pdf
9. Enroll UX 2014 website.
http://www.ux2014.org/
10. Creating a New Competitive Marketplace: Health Insurance Exchange Establishment Grants Awards List.
http://www.healthcare.gov/news/factsheets/2011/05/exchanges05232011a.html (Accessed December 1, 2011)
11. Robert Wood Johnson Foundation. ‘RWJF Seeks Coverage of 95 Percent of All Americans by 2020.’ May 6, 2011.
http://www.rwjf.org/coverage/product.jsp?id=72289
12. Pear, Robert. “Many states take a wait and see approach on new insurance exchanges.”
New York Times. February 27, 2012.
http://www.nytimes.com/2012/02/27/health/policy/a-wait-and-see-approach-for-states-on-insurance-exchanges.html?_r=1&scp=1&sq=health%20insurance%20exchange&st=cse