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Legislators debate implementation of state health insurance exchange

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A panel of state Sens. Nia Gill (D-Montclair) and Dawn Marie Addiego (R-Medford) and Assemblyman Herb Conaway (D-Delran) discussed the multiple challenges the state faces in implementing a health care insurance exchange created by the Affordable Care Act at a forum for health care providers at the New Jersey Hospital Association.

Questions raised included the role of industry members on the advisory board and board of directors of the state's health exchange, as well as how the state will continue to discuss and amend exchange legislation that was vetoed by Gov. Chris Christie earlier this year.

The legislation is being discussed again with the original bill as a starting-off point, said Conaway, a medical doctor. Gill said within the language of the bill, it is "vitally important to leave areas of discretion … we don't know everything."

One of the biggest concerns the Legislature is trying to address is if a second level of governance would establish unnecessary burdens on insurers, as they would need to be licensed by the Department of Banking and Insurance as well as approved as a qualified health plan.

Gill said more government is not always a bad thing, especially if it "better vets and strengthens the exchange." But former DOBI Commissioner Thomas Considine said, in a later panel, that no new plans would consider entering the state if more regulations were added to an already burdensome regulatory environment.

Conaway said the additional layer of regulation is not intended to produce a second licensing process, but if it's not intended to have that effect, Considine said, the state shouldn't include it in the bill. Considine said licensing by DOBI should suffice to approve insurance plans as qualified health plans.

Gill also said the state would be making a mistake if the exchange was left to the federal government to administer. She said giving up regulation of the exchange would mean giving up the ability to "mold and participate in the marketplace" for plans in the best interest of New Jersey.

Addiego said the state should move forward with caution by doing the cost-benefit analysis of a state-run exchange, a state-federal partnership or a fully federal exchange. She pointed to the operational costs of two different state exchanges as a warning. Massachusetts spends roughly $40 million a year to operate its exchange, while Utah runs its exchange for $700,000 annually.

Attorney Theresa Brooks, from Polsinelli Shughart P.C., in Washington, D.C., gave an overview of where the United States stands in the current implementation of insurance reforms. Brooks said the financial management of an exchange is a backbreaker for many governments, even for administrations that are not philosophically opposed to the ACA.

"Time is not on the side of states that do not have an exchange, like New Jersey," Brooks said, though HHS will likely be more flexible than the law originally intended, as few states have completed their exchange plans.

There are different iterations of insurance markets states can participate in — from total ownership of the exchange to a federally facilitated exchange — and total ownership "is not for the feint of heart," Brooks said. But federal grants are a big motivator for the states: "If you leave money on the table now, it's not going to be available later."

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