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Smart Benefits: NE Health Exchanges—Who’s Ahead, Who’s Behind?

Monday, April 15, 2013


How are New England's states doing with the establishment of health exchanges? Take a closer look.

On January 1, 2014, the state health Exchanges must be open for business to provide coverage for individuals, small businesses, and others  who elect off employer plans and qualify for premium subsidies. (However,  in early April, the federal government delayed the start of the Exchanges for small businesses until 2015 in 33 states where it's running the programs because local governments failed to act.)

And some area states are well ahead of others. Here’s a breakdown of the progress in each of the six New England states.


Progressive Vermont is way ahead, as usual.  The Green Mountain Care Board of Vermont, approved in 2011,  is running the state's Exchange. The independent group, nominated by a broad-based committee and recommended by Governor Peter Sumlin, has unprecedented responsibility for all major factors influencing the cost of healthcare, including hospital budgets, health insurance rates, benefit decisions and even rates paid by insurance companies. (Usually these responsibilities are split among different governmental agencies.)

Key updates in Vermont's progress include:

-On April 4, Vermont released proposed rates and plans for the Exchange, the only state yet to do so.
-So far, BCBS and MVP Health Plan are the only carriers who will participate in the Exchange.  
-Small employers (less than 50 employees) will need to purchase through the Exchange, and will no longer be able to purchase for their employees in the private market. These small employers will also have to convert to calendar year renewals on January 1 each year.
-As of January 2017, private insurance will no longer be legally available to Vermonters and all citizens will have to purchase through the Exchange.

Rhode Island

Rhode Island comes in a close second  to Vermont with preparedness for January 1. The Rhode Island Health Benefits Exchange was established by Executive Order in 2011. The Rhode Island Healthcare Reform Commission is charged with planning the Exchange with support from an Exchange Workgroup consisting of many different constituencies.  There's also an Exchange governing board and advisory board in place.

The Exchange has the full support of Governor Chafee and Lt. Governor Elizabeth Roberts, who has taken the lead on making affordable health care a priority during her tenure. And it's led by Executive Director Christine Ferguson, an appointee of Governor Chafee well known for her role as the Director of Public Health in Massachusetts, where the state's Connector has been used as a model for Obama’s national healthcare reform.  

In addition to a website to meet the federal government's requirement that Exchanges provide online marketplaces where individuals can compare and purchase health insurance, Rhode Island consumers will be able to call navigators at a call center, or even visit the Exchange's office space.

Where RI's Exchange Stands:

-All three commercial insurers in the state - BCBSRI, UnitedHealthcare and Tufts Health Plan - are expected to participate in addition to Neighborhood Health Plan of Rhode Island.  
-Rates and plans are not yet available for the Exchange, so affordability compared to commercial options is still unknown. This information is expected in mid to late summer.
-Benefit advisors (brokers) will be used as the primary distribution channel  for the Exchange, but their use is optional.
-While critics of the Exchange are concerned the state's population isn't large enough to support the investment long term (it must be self-sustaining by 2015), it's estimated as many as 80,000 uninsured Rhode Islanders could be covered.  The Exchange will provide an option to small businesses who elect not to offer insurance, and will be available to those working for employers who qualify for the premium subsidy.


The Massachusetts  Health Connector is an independent state agency that helps residents find health coverage.  This model, established by the Commonwealth in 2006, has been referred to as the model for Obamacare because it has drastically reduced the number of uninsured in the state.

But it's struggled with making care affordable and in attracting small businesses to choose the Connector for their employees. Today, there are less than 2,000 people enrolled through small group plans on the Connector, primarily because there  are limited plan design offerings and carrier selections for small groups.  And the Connector now faces competition from newly established co-ops by the Retailers Association of Massachusetts and the Chambers of Commerce.


Connecticut will offer a state-run Exchange that's supported by the governor. A quasi-governmental organization, it will be run by an Exchange board.  However, consumer groups have been vocal with their concern that many board members are industry insiders, and consumers and small businesses are underrepresented, straining relations.

Current Status of the Exchange:

-Exchange staff drafted a proposed plan for the uninsured that was more expensive than what the carriers are already offering through the private market.  
-So far, Anthem-BCBS, Aetna, Oxford (part of UnitedHealthcare) and the new Healthy Connecticut co-op plan to participate. Harvard Pilgrim Health Care of Massachusetts has applied for a license in Connecticut, but it's not  yet known if they'll participate.  
-Brokers will not function as navigators in the individual or SHOP (small business) Exchanges.

New Hampshire

New Hampshire has changed its position on a state-run exchange. In 2012, Democratic Governor John Lynch signed a law prohibiting the state from participating in the Exchange, but on February 13, 2013, newly-elected Governor Maggie Hassan informed federal officials that New Hampshire would pursue a state-federal partnership Exchange. In this model, New Hampshire will control management of the Exchange and consumer education.  The New Hampshire Insurance Department will certify which plans are offered, but the federal Joint Health Care Reform Oversight Committee will provide oversight of this process.

How NH's Progress Stacks Up:
-New Hampshire has not been as successful as other states, like Rhode Island, in attracting grant money, and failed to qualify for an Early Innovation Grant.
-So far, Anthem-BCBS-NH will participate in the Exchange, but Harvard Pilgrim Health Care, a major player in southern New Hampshire, has said it will not participate.
-On March 7, New Hampshire applied for conditional approval for the federal partnership Exchange and awaits final approval.  However, the state now must prove it can meet certain milestones to proceed.


There’s not much happening in Maine since the state is leaving the Exchange to the federal government. Maine’s legislature did not pass Exchange legislation in 2011 or 2012. Shortly after that, Governor Paul LePage declared Maine will not run its own Exchange and he will leave it up to the federal government. So there are no rates or plans available.
Despite this, Maine has just set up its first co-op, the non-profit Maine Community Health Options. Co-ops, governed by their members, are designed to offer individuals and small businesses affordable, consumer-friendly healthcare options. They are optional entities, encouraged by healthcare reform. 

Each of the New England states is in a different stage of healthcare reform, and it's safe to say they all have unique approaches. Since employees need to take Exchange options where they live, employers need to acclimate themselves to every state's plans where their employees reside. That can be a lot to think about, and a lot to keep track of.

Amy Gallagher has over 19 years of healthcare industry experience. As Vice President at Cornerstone Group, she advises large employers on long-term cost-containment strategies, consumer-driven solutions and results-driven wellness programs. Amy speaks regularly on a variety of healthcare-related topics, is a member of local organizations like the Rhode Island Business Group on Health, HRM-RI, SHRM, WELCOA, and the Rhode Island Business Healthcare Advisory Council, and participates in the Lieutenant Governor’s Health Benefits Exchange work group of the Health Care Reform Commission.


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