Dayton Daily News
March 1, 2012
Ben Sutherly, Staff Writer
COLUMBUS — Deadlines loom for Ohio and other states to set up federally mandated health exchanges, intensifying debate over whether taking action or waiting for information carries the higher price tag.
Health-insurance exchanges — in effect, marketplaces set up in which lower-income Ohioans and small businesses can shop and compare a range of qualifying health plans — are one of the key elements of the two-year-old federal health care overhaul.
Setting up a federal-based exchange would cost Ohio an estimated $20 million, while creating a state-based exchange would cost $63 million, Lt. Gov. Mary Taylor said.
An estimated 685,000 Ohioans will pick their health plan and receive premium and cost-sharing subsidies through the exchanges, which must be in place by the beginning of 2014. States have some latitude in how they set up their own exchanges, and the federal government will step in and create exchanges in those states that don’t create their own. A hybrid exchange jointly run by the federal and state government is another possibility.
As of January, 13 states have already established health exchanges. But according to the nonpartisan Kaiser Family Foundation, Ohio is one of six states that have shown “no significant planning activity” in regard to creating an insurance exchange.
Taylor, who doubles as director of the state Department of Insurance, said it has been difficult thus far to make a decision on which way Ohio should go in the absence of more information from the federal government of what a federal health exchange might look like.
“Setting up and operating an exchange, whether it’s a federal-based exchange or a state-based exchange, is expensive,” Taylor told a crowd of a few hundred gathered Wednesday at a forum on health-care exchanges organized by the nonpartisan Health Policy Institute of Ohio.
Taylor cited a study that estimated Ohio’s annual operating costs for an exchange — excluding information technology costs — would be $19 million to $34 million annually. Information technology costs are estimated to be $1.6 million for a federally run exchange, and up to $9 million for a state-based or state-run exchange.
More details of how the federally run exchange might work should be forthcoming in the next few months, said Kenneth Munson, regional director with the U.S. Department of Health and Human Services.
Discussion of the merits of an exchange needs to be separated from the larger debate about the federal health care law, Munson said. “The exchange issue does not need to be caught up in the larger legal fight … .”
Some speakers at Wednesday’s forum said health care costs under the current system are growing at an unsustainable pace, and said the state needs to get moving.
Tricia Brooks, a fellow with Georgetown University’s Health Policy Institute and a proponent of health exchanges and the federal health overhaul, said $1,400 of the cost of a family health plan that Ohioans receive through their employers goes toward paying for uncompensated health care. She believes setting up state health exchanges would reduce that direct burden on everyone .
State Democrats in January proposed legislation that would create a quasi-governmental state body that would create a health exchange. “There’s a time for politics, and there’s a time for policy,” said state Rep. John Carney, a Columbus-area Democrat and supporter of the legislation. “We need to be working on this now so we understand the implications, understand the cost.
But state Rep. Barbara Sears, a Toledo-area Republican, said she doesn’t yet know enough to throw her support behind an exchange set-up process that could be “riddled … with trips and wires. How can I invest Ohio taxpayer dollars without knowing what I’m investing in?” Sears said.
The U.S. Supreme Court is scheduled to hear challenges to the health care overhaul law late this month. Those hearings will focus on the law’s mandate that individuals obtain health insurance coverage.
An additional 1 million Ohioans are expected to be covered by Medicaid if the current law is upheld. That would cost taxpayers $250 million in 2014, rising to $600 million in 2019, Taylor said.