Ever since the Supreme Court decided that the Affordable Care Act was constitutional, there has been a lot of news about state insurance exchanges. Some states are working on their exchange, and others have refused to create one. Alaska is among the states that have decided not to create an exchange.
Part of the Affordable Care Act requires state Governors to submit proposals that give details about how their state health insurance exchange will operate. The deadline for that is November 16, 2012. States that fail to have their plans approved by the federal government, and states that choose not to set up a state exchange, will have an insurance exchange set up for them by the federal government.
The health insurance exchanges will be used by people who want to find an affordable health insurance plan in 2014. Right now, you can use consumer websites to find the best deal on car insurance, or to find a good rate for a hotel room. The insurance exchanges will work in a similar manner. They also will inform people who are eligible for Medicaid, but are not currently receiving it, that they can get it. They can sign up for it quickly and easily through the exchange.
Alaska Governor Sean Parnell has decided that Alaska will not create its own health insurance exchange. His reasons for making this decision has to do with the amount of money it would cost to set up a state health insurance exchange. In a press release, Governor Sean Parnell said:
“Allocating state dollars and personnel to design and implement an exchange is the most expensive option. It doesn’t make sense to spend Alaskans’ dollars to set up an exchange when so much uncertainty exists about how to implement it and how to gain federal approval. Federally mandated programs should be paid for by federal dollars”.
The federal government did allocate funding to help states set up an insurance exchange. The funding came from the “Level 1 and Level 2 Establishment Grants”. States that wanted to receive these grants just had to let the federal government know that they wanted to use the funding. The Establishment Grants include 100% of state operating and maintenance (O & M) through December 31, 2014. The exchanges are expected to be operational on January 1, 2014.
Alaska was one of the few states that chose not to accept an Establishment Grant. The state would have received $1 million to use to create an exchange. Later on, Alaska used some of its own money to hire a consulting firm that would help the state figure out the best way to implement an exchange. Now, Governor Sean Parnell has decided that creating an exchange is too expensive. This is because the state did not accept the funding from the Establishment Grant.
A state cannot completely opt-out of having a health insurance exchange. If Alaska chooses not to make one, it means that the Department of Health and Human Services will create a health insurance exchange for Alaska.
Image by LizMarie_AK on Flickr