As mentioned in yesterday’s Agent Alert, earlier today there was a joint committee hearing of the House Health Policy Committee and the House Appropriations Subcommittee on the Department of Licensing and Regulatory Affairs (LARA). The topic of this hearing was the status of Michigan’s Health Exchange. The planning work for the Exchange is taking place, or maybe more appropriately stated, would take place in LARA. Testifying on behalf of LARA were LARA Director Steve Hilfinger, Deputy Director Shelly Edgerton, Finance Director Allan Pohl and Project Manager Chris Priest.
Following opening remarks and an overview of the Exchange timeline (which matches the timeline we reported yesterday) the key questions of the day centered around funding the development of the Exchange and timing, including:
- Needed State Action
- State based vs. Partnership vs. Federally-Facilitated Exchange
- Medicaid Expansion
- Essential Health Benefits
- Federal Rulemaking
- The potential for new legal challenges
Governor Snyder and the staff at LARA believe that it is prudent to act now on developing a Michigan based Exchange, but they need legislative authorization to request and spend $9.8 million available from the U.S. Department of Health and Human Services. The opportunity to receive these dollars expires in November of 2012 (although other similar dates have been extended). These dollars would be spent conducting further studies on the type of Exchange for Michigan, developing requests for proposal for vendors and information technology, coordinating technologies between departments and other pre-launch steps necessary before an Exchange could be operated. In total, there are forty-two requirements that must be met, with information technology as the most challenging.
Director Hilfinger worries that further delays may result in the only real choice for Michigan being either the Partnership model or the Federally-Facilitated Exchange, both which limit the flexibility of Michigan to design an Exchange that meets the needs of our citizens and our small businesses. He commented that the Partnership model, for example, is not nearly a 50%/50% partnership between Michigan and Washington, but more of a 16% Michigan/84% Washington design, and a FFE is 100% Washington driven, with some of the invoices being paid by Michigan. Hilfinger also commented that some other states are moving forward with planning and that LARA is seeing increases in vendor pricing and decreases in availability due to demand. To date, seventeen states intend to run their own Exchange, two states will be in partnership models, seven states have declined to run an Exchange and twenty-four are undecided.
The opposing argument for delaying the development of the Michigan based Exchange is three-fold. First, there are many unanswered questions. This is especially true regarding the design and operation of a Federally-Facilitated Exchange, Essential Health Benefits, Medicaid Expansion and the debate about whether or not subsidies and tax credits can be made available via anything other than a state based exchange. If HHS has a plan for a FFE, they are keeping that information to themselves for the time being. Second, deadlines have shifted in the past and there is no reason to believe that they will not do so in the future. Third, the impending November elections.
At the end of the day, what did we learn? If Michigan starts with a FFE, we can apply to take it back in future years to a state based exchange, and we learned that deadlines are real, or maybe they aren’t. Beyond the arguments of both sides, we also relearned that it is going to be a while before this one gets decided. No vote was taken today and the only thing promised was that the committees will meet again – sometime in the future.
Oh, and I also learned that there are two hours of my life I will never get back…
Scott Lyon
Vice President, Small Business Services