The 2011 Legislative Session in Connecticut saw many positive developments for the state’s 50+ residents including passage of a bill, supported by AARP that will establish a consumer-focused Health Insurance Exchange in the state. The bill, which passed both houses of the Legislature with bi-partisan support, establishes a quasi-public agency that will develop and run the Exchange. The Exchange will be set up as a statewide marketplace where individuals and small businesses can shop for health insurance. The Exchange will offer a choice of health plans, most of which, if not all, will be from private insurers.
The Exchange will be open to individuals not enrolled in an employer-sponsored insurance program, Medicare or Medicaid and small businesses with up to 50 employees, beginning in 2014.
AARP testified on the legislation during public hearings and provided important feedback to help ensure that the final legislation represented the best interests of Connecticut consumers. For example, AARP fought successfully to create a conflict-free governing board, so health insurers offering products through the exchange are not also on the governing board regulating those products. The legislation also sets up a framework for “active purchase” that would require competition among health plans vying to participate in the exchange based on cost, value, quality and customer service.
AARP Connecticut State Director Brenda Kelley said, “Exchanges are vital in the effort to extend health coverage to the uninsured, while improving access and affordability for those already in the individual and small group markets. With the passage of this legislation, Connecticut, with insight and feedback from consumers and consumer advocates, is well positioned to develop an Exchange that is viable and effective in delivering quality, affordable health care.”
Also noteworthy in S.B. 921 are AARP-backed provisions that will ensure a level playing field between Exchange and non-Exchange insurers and facilitate the seamless transition of consumers among public assistance programs. Consumer education and outreach are also emphasized in the bill.
Once the Exchange is established, consumers will be able to easily comparison shop for health plans via a website, in much the same way they now shop for competing airline fares and hotel rates.
An additional plus for consumers is that, as part of federal reform law, health plans sold on exchanges are subject to many more rules than the existing marketplace requires. This can benefit consumers. For example, plans sold on the Exchange must include at least three benefit levels, gold, silver and bronze, with tiered pricing and cost-sharing options, making detailed, apple-to-apple comparisons between insurers possible.
Plans must also include certain key benefits to be defined by the federal government.
When can we expect the exchange to be up and running? Federal law requires implementation by 2014, and this deadline prompted some legislators to question why the state should move forward now, when key details are still forthcoming on the federal reform law.
The co-chairman of the Insurance and Real Estate Committee said the state of Connecticut could do a better job designing its own exchange rather than waiting for federal government plans.
“We are the number one insurance state in the country. . . and I believe we have the expertise and the knowledge that perhaps many other states do not have,” he said.