BILL REQ. #:  H-1850.1 

READ FIRST TIME 02/25/11.   

     AN ACT Relating to the creation of a health benefit exchange; adding new sections to chapter 41.05 RCW; and creating new sections.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds that the affordable care act requires the states to establish health benefit exchanges. The legislature intends to establish an exchange, including a governance structure that will be in place no later than July 1, 2012. There are many unanswered questions associated with establishing an exchange that will take a great deal of effort and expertise to answer. It is therefore the intent of the legislature to establish a process through which these questions can be answered in order to provide the legislature and the governor with the information they need to establish a health benefit exchange in Washington by the deadline established in the affordable care act.

NEW SECTION.  Sec. 2   A new section is added to chapter 41.05 RCW to read as follows:
     The state shall establish a health benefit exchange consistent with the federal affordable care act, P.L. 111-148, to begin operations no later than January 1, 2014, and intended to:
     (1) Increase access to quality affordable health care coverage, reduce the number of uninsured persons in Washington state, and increase the availability of health care coverage through the private health insurance market to qualified individuals and small employers;
     (2) Provide consumer choice and portability of health insurance, regardless of employment status;
     (3) Create an organized, transparent, and accountable health insurance marketplace for Washingtonians to purchase affordable, quality health care coverage, to claim available federal refundable premium tax credits and cost-sharing subsidies, and to meet the personal responsibility requirements for minimum essential coverage as provided under the federal affordable care act;
     (4) Promote consumer literacy and empower consumers to compare plans and make informed decisions about their health care and coverage;
     (5) Effectively and efficiently administer health care subsidies and determination of eligibility for participation in publicly subsidized health care programs, including the exchange;
     (6) Create a health insurance market that competes on the basis of price, quality, service, and other innovative efforts;
     (7) Operate in a manner compatible with efforts to improve quality, contain costs, and promote innovation;
     (8) Recognize the need for a private health insurance market to exist outside of the exchange and the need for a regulatory framework that applies both inside and outside of the exchange; and
     (9) Recognize that the regulation of the health insurance market, both inside and outside the exchange, should continue to be performed by the insurance commissioner.

NEW SECTION.  Sec. 3   A new section is added to chapter 41.05 RCW to read as follows:
     The health benefit exchange shall be governed by a public-private partnership, with a governing board, whose structure shall be established in legislation by July 1, 2012. Meetings of the board shall be subject to the open public meetings act, chapter 42.30 RCW.

NEW SECTION.  Sec. 4   The definitions in this section apply throughout sections 1 and 4 through 6 of this act, unless the context clearly requires otherwise. Terms and phrases used in sections 1 and 4 through 6 of this act that are not defined in this section must be defined as consistent with implementation of a state health benefit exchange pursuant to the affordable care act.
     (1) "Affordable care act" means the federal patient protection and affordable care act, P.L. 111-148, as amended by the federal health care and education reconciliation act of 2010, P.L. 111-152, or federal regulations or guidance issued under the affordable care act.
     (2) "Authority" means the Washington state health care authority, established under chapter 41.05 RCW.
     (3) "Commissioner" means the insurance commissioner, established in Title 48 RCW.
     (4) "Exchange" means a state health benefit exchange pursuant to the affordable care act.

NEW SECTION.  Sec. 5   (1)(a) In consultation with the joint select committee on health reform implementation, the authority shall apply for planning and establishment grants pursuant to the affordable care act. Whenever possible, planning and establishment grant applications shall allow for the possibility of partially funding the activities of the joint select committee on health reform implementation.
     (b) The authority, in consultation with the joint select committee on health reform implementation, shall implement provisions of the planning and establishment grants as approved by the United States secretary of health and human services.
     (2) By January 1, 2012, the authority, in consultation with the joint select committee on health reform implementation, shall develop a broad range of options for establishing and implementing a state-administered health benefit exchange. The options must include analysis and recommendations on the following:
     (a) The structure of the public-private partnership that will govern the exchange, operations of the exchange, and administration of the exchange, including:
     (i) The goals and principles of governing the exchange;
     (ii) The creation and implementation of a single state-administered exchange for all geographic areas in the state that operates as the exchange for both the individual and small employer markets by January 1, 2014;
     (iii) Whether and under what circumstances the state should consider establishment of a regionally administered multistate exchange as an option after implementation of the single state-administered exchange;
     (iv) Whether the role of an exchange includes serving as an aggregator of funds that comprise the premium for a health plan offered through the exchange;
     (v) The administrative, fiduciary, accounting, contracting, and other services to be provided by the exchange;
     (vi) Coordination of the exchange with other state programs;
     (vii) Development of sustainable funding for administration of the exchange as of January 1, 2015; and
     (viii) Recognizing the need for expedience in determining the structure of needed information technology, the necessary information technology to support implementation of exchange activities.
     (b) Whether to adopt and implement a federal basic health plan option as authorized in the affordable care act, whether the federal basic health plan option should be administered by the entity that administers the exchange or by a state agency, and whether the federal basic health plan option should merge risk pools for rating with any portion of the state's medicaid program;
     (c) Individual and small group market impacts, including whether to:
     (i) Merge the risk pools for rating the individual and small group markets in the exchange and the private health insurance markets; and
     (ii) Increase the small group market to firms with up to one hundred employees;
     (d) Creation of a competitive purchasing environment for qualified health plans offered through the exchange, including promoting participation in the exchange to a level sufficient to provide sustainable funding for the exchange;
     (e) Certifying, selecting, and facilitating the offer of individual and small group plans through an exchange, to include designation of qualified health plans and the levels of coverage for the plans;
     (f) The role and services provided by producers and navigators;
     (g) Effective implementation of risk management methods: Reinsurance, risk corridors, risk adjustment, to include the entity designated to operate reinsurance and risk adjustment, and the continuing role of the Washington state health insurance pool;
     (h) Participation in innovative efforts to contain costs in Washington's markets for public and private health care coverage;
     (i) Providing federal refundable premium tax credits and reduced cost-sharing subsidies through the exchange, including the processes and entity responsible for determining eligibility to participate in the exchange and the cost-sharing subsidies provided through the exchange;
     (j) The staff, resources, and revenues necessary to operate and administer an exchange for the first two years of operation; and
     (k) Any other areas identified by the joint select committee on health reform implementation.
     (3)(a) In consultation with the joint select committee on health reform implementation, the authority shall develop a work plan for the development of options under subsection (2) of this section in discrete, prioritized stages.
     (b) The joint select committee on health reform implementation may submit to the authority specific questions pertaining to the establishment of a health benefit exchange under section 2 of this act.
     (4) The authority shall consult with the commissioner, the joint select committee on health reform implementation, and stakeholders relevant to carrying out the activities required under this section, including: (a) Educated health care consumers who are enrolled in commercial health insurance coverage and publicly subsidized health care programs; (b) individuals and entities with experience in facilitating enrollment in health insurance coverage, including health carriers, producers, and navigators; (c) representatives of small businesses, employees of small businesses, and self-employed individuals; (d) advocates for enrolling hard to reach populations and populations enrolled in publicly subsidized health care programs; (e) the office of the insurance commissioner; (f) publicly subsidized health care programs; and (g) members in good standing of the American academy of actuaries.

NEW SECTION.  Sec. 6   (1) The authority may enter into:
     (a) Information sharing agreements with federal and state agencies and other state exchanges to carry out the provisions of this act: PROVIDED, That, such agreements include adequate protections with respect to the confidentiality of the information to be shared and comply with all state and federal laws and regulations; and
     (b) Interdepartmental agreements with the office of the insurance commissioner, the department of social and health services, the department of health, and any other state agencies necessary to implement this act.
     (2) To the extent funding is available, the authority shall:
     (a) Provide staff and resources to implement this act;
     (b) Manage and administer the grant and other funds;
     (c) Expend funds specifically appropriated by the legislature to implement the provisions of this act; and
     (d) Adopt all rules necessary for the implementation of this act. All rules must be adopted in accordance with chapter 34.05 RCW.