Health Benefit Exchange (08/01/2011)

Final
STAFF SUMMARY OF MEETING

HEALTH BENEFIT EXCHANGE

Date:	08/01/2011	ATTENDANCE

Time:	10:04 AM to 12:17 PM	Aguilar	X
		Gardner D.	X
Place:	HCR 0112	Kerr J.	X
		Lundberg	X
This Meeting was called to order by		McCann	E
	Senator Boyd	Nicholson	E
		Roberts	X
This Report was prepared by		Summers	X
	Kerry White	Gardner B.	X
		Boyd	X
		X = Present, E = Excused, A = Absent, * = Present after roll call

Bills Addressed:		Action Taken:
Committee Discussion Colorado Health Institute National Conference of State Legislatures Other Business Public Testimony		- - - - -

10:06 AM -- Committee Discussion

Senator Boyd welcomed everyone to the meeting and highlighted key points from Senate Bill 11-200, which establishes the framework for implementing a health benefit exchange in Colorado and details the responsibilities of the committee. Senator Boyd explained that the committee is in place to guide the implementation of the exchange, make recommendations to the General Assembly, protect the interests of Colorado citizens, and provide oversight to the implementation board. She said the committee will also review the initial operational and financial plans of the board, approve the appointment of an executive director, review and approve any grants the board wishes to apply for, and act as liaison between the board and the General Assembly.

Senator Boyd discussed the bill limit of the committee, referenced documents distributed by Legislative Council staff, and invited committee members to discuss their expectations (Attachment A).

10:12 AM

Representative Summers distributed two additional handouts, including his synopsis of the committee's charge and a tool for measuring outcomes as the committee moves forward (Attachment B). Senators Lundberg, Aguilar and Roberts, and Representatives B. Gardner, D. Gardner, and J. Kerr gave opening remarks.

10:29 AM

Senator Roberts requested holding a discussion defining and clarifying the interaction between federal rules and Senate Bill 11-200. Following committee discussion, Legislative Council staff was asked to provide an analysis of the proposed federal rules issued in July.

10:35 AM -- Colorado Health Institute

Joan Henneberry from the Colorado Health Institute gave opening remarks, recognized members of the implementation board in attendance at the meeting, and reviewed the status of the exchange's implementation. She stated the board is in the planning phase, using funds from a $1 million federal planning grant, which have been used to hire staff, do background research, develop a website, and conduct market-specific research. She distributed two handouts (Attachment C). She explained that planning phase funding ends on September 30, 2011, although states have the option to request additional federal funds through the end of the year, which Colorado plans to do. She indicated that the board is in the process of developing proposals to request federal funds for what it is calling the operational phase. There are two funding periods for the operational phase: level 1 and level 2. Level 1 grant proposals are due at the end of September, so an application will be submitted to the committee for review and approval in the coming weeks. The level 2 grant proposal is due in 2012, which will include the full operational plan detailing all tasks and requirements through 2014. Federal moneys for the implementation of the exchange will end in 2014, meaning the exchange will need to be self-funded as of January 2015. Other states may be considering an assessment on premiums as a method of funding administrative costs for operating an exchange.

Ms. Henneberry discussed implementation activities, stating that core function areas such as hiring staff, reviewing federal rules, establishing a governing board, and preparing quarterly progress reports have taken place. The board and work groups are conducting outreach and looking at the eligibility determination (data) systems, for which recommendations will be made later in the month. The board is also working on a formal memorandum of understanding with the Division of Insurance.

10:51 AM

Discussion of board activities continued. Ms. Henneberry reported that: since January, over 2,500 people have attended one of several town hall meetings; the board has met twice; and the website has been developed. Senator Lundberg asked about federal funds and whether the board's activities were contingent on these moneys. Ms. Henneberry indicated that while it is always a possibility that federal funds could be reduced in the future, she believes they have been encumbered at the federal level.

Senator Roberts asked about proposed federal rules issued in July and whether there are any known conflicts with Colorado law. Ms. Henneberry responded by saying the board is still reviewing the rules and concurred with an earlier recommendation to ask Legislative Council staff to provide an analysis for committee members.

11:00 AM

Representative Summers asked Ms. Henneberry to review her credentials and the structure of the exchange, as outlined under Senate Bill 11-200. Ms. Henneberry explained that the Colorado Health Institute is acting as the third-party administrator of the exchange, as required under Colorado law, and her role as project director.

The committee discussed implementation challenges before the board. Ms. Henneberry explained that the board is currently working in small groups to divide up the multiple tasks it must complete in order to begin offering benefit coverage as of January 1, 2014. The first open enrollment period is October 1, 2013, meaning the exchange should be tested by July 2013.

Board members Richard Betts and Stephen ErkenBrack came to the table to respond to questions concerning board activities. Mr. Betts stated that board appointments were made on June 29, 2011, the board is currently developing its bylaws, and a board chair will be selected once the bylaws are complete. Senator Aguilar relayed perceptions that individuals and business members do not form the majority of board membership, as required under Colorado law. Senator Aguilar asked Legislative Council for an opinion as to how well the legislative intent of Senate Bill 11-200 is being fulfilled.

11:35 AM -- National Conference of State Legislatures

Martha Salazar from the National Conference of State Legislatures (NCSL) gave a presentation entitled "State Actions: Health Insurance Exchanges" (Attachment D). The presentation included a review of federal law; federally-required decisions and time lines for state-based exchanges; as well as a progress report on other states, including Louisiana, Mississippi, Massachusetts, and Utah.

Ms. Salazar discussed Louisiana, indicating it is the only state so far that plans to allow the federal government to run its exchange. She continued her presentation with a closer look at Massachusetts and Utah as two states with experience administering exchanges. Specifically, she stated Massachusetts has the highest rate of insurance coverage (98.1 percent of the population) among all states, operates its exchange with a large staff, and already complies with many of the standards being phased in under the federal law. She continued by explaining that Utah's exchange is open to employees of both small and large employers, there are 140 plans available through the exchange, and employers can determine their contribution levels. Ms. Salazar explained that Utah operates its exchange with a staff of four and will be making modifications in order to comply with federal law.

11:53 AM

Senator Lundberg asked follow up questions regarding the intent of Louisiana's plan to have the federal government operate its exchange and the manner in which Massachusetts funds the administrative costs of its exchange. Senator Boyd mentioned that a consortium of states, which includes Colorado, is in place now to look at what it might cost to operate exchanges in specific states.

11:58 AM -- Other Business

Senator Roberts asked for information on the implications of a new health benefit exchange on the state budget. The committee also discussed the possibility of providing comment on proposed federal rules. As these rules were released for public comment in July, the deadline for a response is the end of September. The committee would like to discuss this in greater detail at its next meeting, following receipt of follow up information from Legislative Council staff. The committee clarified its request for information and asked for an analysis responding to the following questions:

What are the anticipated costs for enrolling persons newly eligible for public programs and what options are available to Colorado for controlling its costs?
If federal funds are reduced or the federal law is repealed, how will this impact Colorado's exchange? Will Colorado still need to follow federal rules?
How are key terms in the proposed federal regulations defined, and does the state have the option of adopting alternative definitions?
What is required under the proposed federal rules? How might these proposed rules conflict with state law, restrict the discretion of the board or state, or otherwise require state action?
If the proposed federal rules are adopted, what choices concerning the operation of the exchange remain for the board and Colorado?
Is the state required to spend a certain amount of money? Do the rules specify that as long as the cost to each state is under $136 million, the federal government does not consider this to be an unfunded mandate?

The committee tentatively scheduled its second meeting for August 31, 2011, at 10:00 a.m.

12:12 PM -- Public Testimony

Martha King from the National Council of State Legislatures testified that they are holding their annual meeting in San Antonio next week, and requested any committee members who will be attending bring their comments and questions on the proposed federal rules for further discussion there.

12:17 PM

The committee adjourned.