Arizona deciding how to best approach health exchange

PHOENIX - Arizona is still sitting on the health insurance exchange fence, trying to decide if it is worth creating its own exchange or to let the federal government run it.

According to Don Hughes, Gov. Jan Brewer's Health care Policy Advisor, the whole thing comes down to numbers.

The Supreme Court ruled June 28, that President Barack Obama's Affordable Care Act was constitutional. Part of the act required states to either create and run their own health insurance exchange systems or agree to an exchange run by the federal government.

A number of states have already declared that they are creating their own exchanges in an effort to hold off federal government involvement in the state health care market. States have until January 2013 to make a decision.

The exchanges are designed to provide a website or department that state residents who don't have insurance or small businesses looking to insure their employees can go to compare and purchase affordable health insurance.

Arizona's decision hangs on the answers to a number of technical questions the state has for the federal government, Hughes said.

How much will the federal government reimburse the state for the cost of running the exchange, he asked. The cost of running the exchange is going to have a big impact on the state budget. How big an impact depends on how much the state gets in grant funding from the federal government.

Hughes estimates that there are approximately 500,000 people that are currently uninsured and could use the exchange to find affordable insurance.

Another question is, if Arizona decides to expand its state Medicaid program (known as the Arizona Health Care Cost Containment System) in order to take advantage of additional federal funding, does it have to increase the number of people on the program to 133 percent of the federal poverty line or can that limit be changed?

If the state does expand AHCCCS and changes its mind, can it trim back the program later?

Hughes estimates that there are approximately 500,000 people who would meet the qualifications for an expanded AHCCCS program.

"These are really fundamental questions," Hughes said.

As the director of Brewer's Office of Health Insurance Exchange, Hughes has been looking at the situation from a number of angles, he said. There are also a number of pros and cons to the state running its own exchange.

For example, if the state runs its own exchange, it can control the criteria that insurance companies must meet in order to qualify as an exchange member, he said.

The state can set the minimum health insurance benefits offered by exchange members.

It can control some of the costs associated with the exchange by determining who is eligible to apply for insurance through it and how it is regulated, Hughes said.

If the state allows the federal government to create the exchange for it, Arizona would have less control over benefits, costs and eligibility, he said.

Ultimately, the decision is up to Brewer, Hughes said. But, if the governor does decide to have the state run the exchange, his office is already working on a plan to put one in place.