LINCOLN — Like contestants on the game show “Let's Make a Deal,” the governors of Nebraska and Iowa had three obscure options from which to choose last week.
Behind Door No. 1, a health insurance exchange to be created by the state.
Behind Door No. 2, a federally managed exchange.
And behind Door No. 3, a state-federal partnership exchange.
Gov. Dave Heineman picked Door No. 2, the federal exchange. Gov. Terry Branstad of Iowa opted for Door No. 1, a state one, but said he may ultimately switch to No. 3, a partnership model.
It remains to be seen how their contrasting choices will affect citizens of the two states, say those who have followed implementation of the federal health care overhaul.
“The jury's still out on that,” said Mark Kolterman, a Seward, Neb., insurance agent.
Health insurance exchanges, the centerpiece of the federal health care law, are to be up and running in all states by Jan. 1, 2014.
The exchanges are to be one-stop shops, where people can compare and buy private health insurance, get federal subsidies to afford the premiums or enroll in Medicaid if eligible.
Nebraska Insurance Director Bruce Ramge said it is difficult to compare the different types of exchanges because there are so many unknowns about them.
Federal officials are still working on rules and regulations as the states scramble to put together plans.
Ramge and others were optimistic that all three options would work similarly for people looking to buy health insurance.
No matter who sets up the exchanges, the federal law requires them to make services available online, through call centers and in walk-in offices.
“On its face, the act of a person going into the exchange and purchasing insurance should be the same,” said Michaela Valentin, a lobbyist for Blue Cross Blue Shield of Nebraska.
Policies available through the exchange likely would be the same for all three options, as well, Ramge said.
Exchanges could be “active purchasers,” limiting the sale of policies offered through the exchange to those deemed good values for customers. But Nebraska, Iowa and the federal government all indicated that they would allow the sale of any policy that meets certain minimum standards.
Differences among the state, federal and partnership exchanges may show up in other areas.
Valentin said the biggest difference is that the management of a state exchange would be the responsibility of local people.
When problems arise, customers and providers could call someone in Lincoln or Omaha or Des Moines instead of someone working for the federal government, who may be several states away. With a state-run exchange, state officials would choose the governance structure, deciding whether to put the exchange under an independent board or a state agency.
“At least we'd have some say in who's going to run it, who's going to control it,” Kolterman said.
Backers of state-run exchanges said differences may appear in the customer-assistance arena.
Both states and the federal government will have to contract with “navigators” to encourage people to get insurance and help them sort through their choices. In a partnership exchange, states could keep responsibility for dealing with the navigators.
But states may differ from the federal government in the requirements they set for navigators and in the way they approach the job of reaching out to people and getting them enrolled.
Insurance agents and consumer advocates generally see more opportunities to help shape those requirements with a state-run exchange.
Insurance agents are nervous about what their role will be in the new system, especially under federal management.
Agents' experiences with Medicare Part D, which Republicans pushed through Congress in 2003, have not been good, Kolterman said. Medicare Part D policies provide prescription drug coverage for senior citizens, and the amount agents get paid for selling those policies is too low to cover expenses, Kolterman said.
If reimbursement for selling insurance through the exchanges is low as well, it could force some agents out of business, he said.
For insurance companies, a federal exchange would mean dealing with two regulatory agencies. State officials would continue to oversee insurance policies sold outside the exchanges and the federal government would be responsible for regulations within the exchange.
But Ramge said he expects to work closely with federal officials on creating the exchange for Nebraska.
Although the governor's announcement came on Thursday, federal officials have a call scheduled this week with the Nebraska Department of Insurance.
Ramge said the federal government might contract with the department to carry out some regulatory duties, just as other state agencies inspect health care facilities and enforce environmental regulations on behalf of the federal government.
For many groups, deciding among the three options came down to matters of trust and pride. The argument was that state government could do the job more efficiently, more logically, more tailored to the unique needs of the state.
State Sen. Jeremy Nordquist of Omaha described a state-run exchange as an opportunity to “create a new and improved health insurance marketplace, designed for Nebraskans by Nebraskans.”
He added: “There's no doubt in my mind that a federal exchange will cost more.”
Heineman, by contrast, concluded that states would have little control, whether they created their own exchanges or left the job to the federal government.
“On the key issues, there is no real operational difference between a federal exchange and a state exchange,” he said.
Heineman also concluded that a state exchange would cost Nebraska taxpayers $470 million more over eight years than a federal exchange.
Many differences among the three options won't become clear until the exchanges are up and operating. States might have opportunities to change their minds at that point, moving from a federal exchange to a state-run exchange, or vice versa.
Until then, many of the positions about state or federal or partnership exchanges stem from fear of the unknown, Valentin said.
“(Heineman) chose the federal exchange because we just don't know what the feds are going to do, and that was the same reason we wanted to keep it in Nebraska — because we don't know what the feds are going to do,” she said.
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