The Affordable Care Act’s Puzzle Box

When I was a kid, my dad brought home a Japanese Puzzle Box.  For those unfamiliar with a Japanese Puzzle Box, they are beautiful and deceptively complex, as they involve figuring out a series of pressure points or manipulations performed in just the right order to allow for the opening of the box.  I’ve been told that some Japanese Puzzle Boxes can be solved in as many as two or three moves to more than 1,500 maneuvers to open a box.  I am pretty certain the puzzle box gift from my dad required fewer than 10 maneuvers to solve, but it still took a great deal of time to solve, to say nothing of the time it took to reassemble it.  And the only prize in the end was an open box and I suppose a small sense of accomplishment.  Needless to say, the puzzle box was relegated to a shelf to be admired and sometimes discussed, but no further attempts were made to re-open the box. 

The Affordable Care Act (ACA) is in and of itself a giant puzzle box, but the Health Benefits Exchange is the ACA’s puzzle box “gift” to the states.  Some have immediately shelved it, others, like Illinois are still tinkering with it, but no state has really cracked the Exchange puzzle box.  No one thought implementation of the Exchange would be an easy feat, but even those doubters probably did not anticipate the depth of challenges associated with building an Exchange.

Illinois is proof of how deep those challenges run.  The state is one of only a handful of states that have actually approved legislation authorizing an Exchange, but battles over what that Exchange will look like, how it will operate, and how it will be funded in the future halted efforts to advance additional Exchange language during the fall veto session.  Even if those disagreements did not exist, however, politics would still have played a prominent role in suffocating movement of any Exchange legislation in the short veto session.

The slew of amendments filed to SB 1313 in the October session demonstrates the ideological differences over key Exchange decision points.  The Illinois Chamber supported House Amendment #3 to SB 1313, but legislators ultimately never entertained committee discussion of any of the amendments, unmoved by the Administration’s fear that Illinois could miss the grant application deadline for Level 2 federal funding to support Exchange implementation and operation through 2014. 

No one can blame legislators for frustrations over stringent federal deadlines with regard to Exchange funding and implementation benchmarks when there is still regulatory fluidity and lack of clarity on some tremendously complex policy decisions.  A pending Supreme Court ruling this summer that could decide the fate of the entire Act certainly does not help implementation efforts either.

Recent HHS guidance, if one is to read between the lines, suggests nervousness on the part of the feds.  HHS added a stick to its federal funding carrot to make it perfectly clear that federal funding for the Exchange is not “free money.”  States that have accepted federal funding to establish an Exchange, but fail to do so and ultimately rely on a to-be-determined federal Exchange, will be required to pay that money back.  States also have longer to apply for Level 1 funds, as HHS pushed the application deadline back six months.  The Level 2 application deadline on June 29 still stands but logic would suggest the feds will have to push this date back as well, which begs the question of what will happen to the ACA’s key implementation dates for the Exchange, the first of which is just slightly more than 12 months away.  

Illinois is one of 29 states that have received Level 1 funding and over half of those states have yet to pass Exchange implementation or authorization legislation.  Rhode Island is the first and the only state to have received a Level 2 grant.

The road ahead is certainly not paved with gold when it comes to the Exchange, and more specifically, the future of the Illinois Health Benefits Exchange.  From the Illinois Chamber and the Healthcare Council’s perspective, however, it is still a road worth traveling as the state has two clear choices right now: commit to the Illinois Health Benefits Exchange or risk federal intervention and pay back the federal funds the state has so far received to move forward with its Exchange. 

The Illinois Chamber is committed to the ACA’s puzzle box and ensuring that what is inside is an Exchange that adheres to the pro-market principles we have fought for and will continue to fight for in 2012 and beyond. 

Written by Laura Minzer