Lt. Gov. says Ohio likely will opt for federally run insurance exchange

In the wake of the Supreme Court's decision to uphold nearly all provisions in the Affordable Care Act, Lt. Gov. Mary Taylor, who also serves as the director of the Ohio Department of Insurance, said the state most likely will choose a federally run insurance exchange in Ohio (Source: "Ohio’s plan for Medicaid is unclear," Columbus Dispatch, June 29, 2012).

The health reform law allows states the option of either running their own health insurance exchange or having the federal government run one for them. “At this point, the governor and I agree that we do not see how running a state-based exchange is good for Ohio and Ohioans,” Lt. Gov. Mary Taylor said in a conference call.

An ODI-commissioned study conducted by KPMG estimated that the maximum implementation cost for a  fully featured state exchange would be $63.4 million, while interfacing with a federally run exchange would cost about $20 million. Another ODI-commissioned study, conducted by Milliman, estimated that the non-IT operating cost for a state-run exchange in 2015, the first year the exchange would be self-sustaining, would range from $19.1 million to $33.7 million, depending on the level of services offered by the exchange.

A decision by Ohio to opt out of a state-based exchange does not preclude the state from opting for a partnership exchange, a variation of a federally-facilitated exchange under which HHS would have ultimate responsibility and authority. HHS has provided guidance that states entering into a partnership arrangement will be able to retain certain exchange functions – specifically, operation of exchange plan management or in-person consumer assistance functions or both.

The partnership exchange model enables states to leverage both state and federal resources. HHS has indicated that t echnical assistance and establishment grant funding is available to states opting to establish a state-based exchange, states electing for a partnership exchange and for states wanting to build linkages to a fully federally-facilitated exchange. However, federal grant funding for exchange establishment will only be awarded through 2014.

To learn more about health insurance exchanges and Ohio's options, please see HPIO's policy brief "Final rules and key stakeholder considerations regarding exchange establishment and functions." (pdf, 8 pages)