President Obama’s re-election on Tuesday smoothed the way for states to implement his signature health-care reforms, a challenge the District took on with vigor while other states waited to see if Republican opponent Mitt Romney could deliver on a promise to unravel the controversial law.
Board members tasked with rolling out the city’s marketplace of insurance plans — known as a health exchange — expect to gain federal approval of their proposal next week, joining 13 states who took an aggressive approach to the Affordable Care Act’s mandates while other states scramble to set up their own or let the federal government establish one for them. Each state is required to submit its plans to the federal government by Nov. 16.
The exchanges have been described as a Web-based program, akin to the Expedia travel website, with side-by-side comparisons of health plans taking the place of flights or hotel rooms.
“This is a good way to really have a competition among different businesses, in this case the insurance industry, to see which plan is good,” said Dr. Mohammad Akhter, who took a year’s leave of absence as director of the D.C. Department of Health to serve as chairman of the city’s health exchange board.
The District is in a good position to implement its plans, but Dr. Akhter said officials did some “soul searching” before deciding to set up a city-based exchange, officials said. They felt they should provide a marketplace to serve the city’s unique population of about 618,000 residents, of which only about 5 percent are uninsured because of aggressive efforts to cover residents under Medicaid or the D.C. Healthcare Alliance, which enrolls many immigrants who are not eligible for the federal program.
From the start, Dr. Akhter said he insisted that the exchange be a commercial enterprise and not an arm of the government. Experts in the field would serve on the exchange’s board, while friends of either Mayor Vincent C. Gray or D.C. Council members would not.
“The exchange is not a government entity. It’s an independent commercial venture,” Dr. Akhter said Thursday in an interview with editors and reporters at The Washington Times. “I even moved for getting the domain name. It’s not dot-gov or dot-org — it is dot-com.”
Legislation from the D.C. Council and more than $80 million in federal grants authorized the city to move ahead with its plans for an operational exchange by October 2013. While many states get in gear, the District has launched a public-relations campaign to avert a “collision course” between the government and businesses, according to Dr. Akhter.
“We have one chance to do this right,” he said.
Segments of the small business community pushed back when the board decided in October that the exchange would be the sole health insurance marketplace for individuals and small employers — defined as companies with 50 or fewer workers. Under the settled-upon structure, the exchange is projected to have more than 100,000 customers, which officials have pointed to as a key threshold for it to thrive.
The economics of running the exchange would be “unattractive” if the small employers were not brought in, Dr. Hank J. Aaron, a board member, said.
But critics of the plan have lingering concerns. Hannah Turner, who speaks for a coalition of businesses that objected in October to the small-employer component, said they worry about potential “limits of choice” within the exchange structure.
The D.C. Chamber of Commerce is also keeping an eye on policymakers. It supports Mr. Obama’s law and the city’s health exchange, but has “major concerns” with current plans for implementation, spokesman Max Farrow said.
“The chamber’s stance, in short, is that the (exchange) authority should not restrict small businesses to purchasing through the exchange alone,” he said. “Lack of choice and competition will drive up costs, which makes no sense when small businesses are leading our fragile economic recovery and already must strive to compete with Maryland and Virginia.”
The exchange board provided a concession of sorts by capping the definition of small groups at 50 employees, however, instead of the 100 maximum the federal law mandates as of 2016.
Dr. Aaron said businesses may resort to arguments about fairness or claim it violates the president’s promises to mask other motives. Some companies may have low-cost employees with an average age of 25 and fear the exchange — which, by law, limits the degree to which premiums can vary based on age and other factors — will hamper their economic edge since the exchange is designed to provide broad coverage, he said.
Council member David A. Catania, at-large independent and chairman of the Committee on Health, recently met with business owners “and had a very productive conversation about the exchange,” said Brendan Williams-Kief, the lawmaker’s spokesman.
“It’s important to note that there is still plenty of time and opportunity for public input and dialogue on how the exchange is set up,” he added.
Small businesses can stick with an existing insurance plan if they had it before the health care law passed in 2010, but they must work through the exchange if they switch their plans or make significant changes to them.
While critics say it will be difficult to maintain their grandfathered status, Dr. Akhter said the city is not looking to rock the boat. As the board members see it, the exchange will stabilize the insurance market and establish a transparent relationship between providers and consumers.
“If we disrupt the market place, it benefits no one,” he said, adding later, “Whenever there’s a change, there’s also fear and there are also concerns.”
• Tom Howell Jr. can be reached at thowell@washingtontimes.com.
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