Observations in Health
Colorado Health Benefit Exchange Board
Building Colorado's Health Insurance Exchange
By Sandy Graham
Photography by Howard Sokol
EDITOR'S NOTE: Gretchen Hammer is the executive director of the Colorado Coalition for the Medically Underserved and the interim chair of the Colorado Health Benefit Exchange Board, the entity setting up Colorado's health insurance exchange. As director of the coalition, Hammer works to make the health care system fairer and more just.
The architects of Colorado's Health Benefit Exchange are simultaneously constructing the exchange and formalizing the administrative framework that surrounds it.
"I've heard the analogy many times before, but it's true: We're building the plane while we're flying it," says Gretchen Hammer, the interim chair of the Colorado Health Benefit Exchange Board and executive director of the Colorado Coalition for the Medically Underserved.
Authorized by state lawmakers in the 2011 General Assembly, the board has one of the biggest tasks set forth in the 2010 Affordable Care Act (ACA), the federal health care reform law. Colorado has considered the concept of an exchange for a number of years. Now, the ACA has created new opportunities for states to pursue building exchanges.
"It's a very complicated endeavor," says Hammer with some understatement.
For Hammer, volunteering on the board is something of a labor of love. The coalition she directs works for a system that is fairer and more equitable for all Coloradans.
Research for the board estimates that 789,000 Coloradans – nearly 16 percent of the state's population – did not have health insurance in 2010. Being uninsured is a huge roadblock to getting needed health care.
Many of Colorado's uninsured are employed and have middle class incomes, but for a variety of reasons don't have health insurance, Hammer says. Many work at small businesses, which are less likely to provide health insurance benefits than large corporations. Small business owners simply can't afford the continually growing expense of employee health insurance.
According to the Kaiser Family Foundation State Health Facts, about 70 percent of Colorado's nonelderly adult uninsured people have one full-time worker in the family. And 41 percent of the uninsured make between 139 percent and 399 percent of the poverty level while another 12 percent make more than four times the poverty level. For an individual, the poverty level is $10,890. [Some 43 percent of the state's uninsured are single, childless adults, according to the Kaiser study.]
The new exchange will provide an online insurance marketplace for both individuals and small businesses. Exchange customers will be able to compare health plans and explore options. There will also be navigators – customer-service people – who can help shoppers find the right products for their needs and budget. Some individuals and small businesses will get subsidies from the federal government to help them afford coverage.
Rules set by the federal government outline some of the requirements for an exchange. For example, the online marketplaces will have to post information about price and quality, offer specific standardized plans and set an annual open enrollment period. But the state still has a lot of flexibility in structuring its exchange to meet Colorado's unique needs, Hammer says. The federal government will set the minimum benefits that plans must offer, and the Colorado exchange will be responsible for certifying all plans offered for sale. But just how that will be done is still being worked out. In addition, the board itself has to develop its governance structure and secure funding. It also had to search for and hire a director, Patty Fontneau, formerly chief operating officer of the law firm Holme Roberts & Owen LLP.
Then there's technology. The online system should link to Medicaid and Child Health Plan Plus (CHP+), which both provide coverage for low-income people, because some customers will find they are eligible for those programs when they shop. If possible, individuals should be able to switch seamlessly to program websites. (For more about designing the Web interface, see story, Opening the Door.)
Despite the many questions to be answered, the Colorado board is moving ahead and has had great participation from the wide range of organizations and entities that have a strong interest in the health care system and health insurance.
If Hammer could change one thing, it would be the use of the word "exchange," which she thinks many people interpret as a place in which to trade or return an item.
"No one says I'm going to the grocery exchange," she says. "The consumer research says a better term is 'marketplace.' That's why our tag line for the exchange is 'Your marketplace for affordable, quality health insurance.'"
Hammer sees building a successful Colorado Health Benefit Exchange as a great opportunity to increase coverage and to begin to address affordability.
"But it is important to note that in concert with efforts to build the exchange, we must also work in other ways to reduce health care costs and increase affordability," she says. Hammer believes each Coloradan has a role in reducing health care costs by taking care of his or her health and using health resources wisely. Those in the health care industry have a role in improving the quality of health care services and developing new ways to pay for the value rather than volume of services provided.
"I think of it almost like a symphony," Hammer explains. "Each section of the orchestra must perform at its best and then when all sections join together, the final product is greater than the sum of the parts."