(Source: MIRS.news, Published 11/03/2023) Michigan's insurance department would be responsible for implementing a state marketplace for qualified health and dental coverage plans, as opposed to continuing to rely on a centralized federal exchange, under legislation taken up in committee this week.
As part of the 13-year-old Affordable Care Act (ACA) that became federal statute during President Barack Obama's administration, states were instructed to set up health insurance marketplaces – or "exchanges" – where individuals and households could shop for private plans. This year, Michigan continues to be one of 30 states using the Federally Facilitated Exchange (FFE), directing citizens to plans that are compliant with ACA regulations.
"This legislation will have the practical effect of getting more lives in Michigan covered. The revenue generated by the exchange, instead of being returned to a federal department, can be used to do outreach in underinsured communities," said Senate Health Policy Chair Kevin Hertel (D-St. Clair Shores) during a Thursday committee hearing.
Hertel's committee took testimony on SB 633, SB 634, SB 635, SB 636 and SB 637.
Either before or starting on Jan. 1, 2025, insurance plans through the new SBE would become available online or through a toll-free hotline. In order to participate in the state-run marketplace, the DIFS director must certify the plan meets federal and state requirements. Additionally, the exchange itself and benefit plan carriers operating on it would be barred from charging users a fee if they opt to terminate their coverage.
Similar to the FFE, those offering a plan through the Michigan-based exchange would be charged up to 2.75% of combined monthly premiums for on-exchange policies. The bills that received testimony provide a new board – consisting of the DIFS director, the state's health department director and 10 Governor appointees – the ability to increase the user fee on health plans through a 75% vote.
Hertel told his committee that a state-based exchange would enhance a "No Wrong Door" approach for residents seeking to gain coverage.
For example, he said if a person applies for Medicaid coverage through the exchange, although they earn too much money to qualify, state departments could coordinate and assist the individual in finding subsidies they're eligible for and coverage plans most affordable for them.
"The reverse is also true for those seeking insurance on the exchange who would otherwise qualify for Medicaid – we will be able to direct them towards applying for those benefits," Hertel said. "In summary, moving to a state-based exchange gives Michiganders the same choices, while allowing for flexibility, easier access and better state innovation."
During the hearing, Legislative Liaison Manager Joseph Sullivan of DIFS said a SBE can be funded through user fee revenue and annual appropriations of General Fund revenue.
The legislation moreover instructs DIFS to apply for a "section 1332 waiver" from the U.S. Centers for Medicare and Medicaid Services (CMS) and the U.S. Department of Treasury, waiving or adjusting certain ACA provisions for Michigan if doing so can promote affordable and high-quality care coverage.
According to the CMS, a Section 1332 waiver allows a state to apply for a “State Innovation Waiver … to pursue innovative strategies for providing residents with access to high quality, affordable health insurance while retaining the basic protections of the ACA.”
Dr. Rob Davidson, an emergency room physician and executive director of the Committee to Protect Health Care, informed MIRS that a SBE could allow for a "more targeted approach to folks who don't have exchange," with a 1332 waiver capable of bringing more federal funds and lower premiums to Michigan.
He said with the federal exchange, "it's less work for the states. … I mean, you don't have to create the legislation, you don't have to file for the waiver, but the downside is that you can't target as much. … You can't target the uninsured or the underinsured as closely as you can if you have a state-based exchange."
He said even incremental increases in folks who have insurance coverage "is really critically important."
