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Michigan Health Exchange Profile


Establishing the Exchange

While Governor Rick Snyder (R) supports the creation of MI Health Marketplace, a nonprofit to oversee the state’s health insurance exchange, he acknowledged on November 16, 2012, that without authorizing legislation, he would plan for a state-federal partnership exchange. The state began moving in the direction of a partnership in August 2012 due to legislative opposition that left the state unable to meet the federal timetable for implementation. Michigan will perform plan management and consumer assistance functions and defer other exchange management functionality to the federal government.

The Governor’s initial recommendation for a state-based exchange was largely informed by the work of the Exchange Steering Committee, which includes representatives from the Department of Community Health, the Office of Financial and Insurance Regulation, and the Department of Technology, Management, and Budget. The Department of Community Health, with the assistance of subcontractors, organized five stakeholder workgroups on Governance; Finance, Reporting, and Evaluation; Technology; Business Operations; and Regulatory and Policy Action, which met between February and April 2011 to plan various aspects of the exchange. The Department of Technology, Management and Budget, with the assistance of subcontractors, developed plans for new technology to establish a MI Health Marketplace portal which would allow for the integration of the exchange with new Medicaid eligibility requirements mandated in the Affordable Care Act (ACA).

Essential Health Benefits (EHB): The ACA requires that all individual and small-group plans sold in a state, including those offered through the Exchange, cover certain defined health benefits. States must decide whether to benchmark their EHB plan to one of ten plans operating in the state or default to the largest small-group plan in the state. Governor Snyder’s administration solicited public comment on the issue and in September 2012, the Governor received preliminary EHB recommendations from the Office of Financial and Insurance Regulation. Recommendations included using Priority Health HMO plan as the benchmark plan and supplementing with the state’s Children’s Health Insurance Program (CHIP) dental plan and the Federal Employees Dental and Vision Insurance Program (FEDVIP) for pediatric vision services.

Exchange Funding

Michigan’s Department of Community Health was awarded a federal Exchange Planning grant of $1 million. In November 2011, Michigan’s Department of Licensing and Regulatory Affairs was awarded a $9.8 million federal Level One Establishment grant to conduct further insurance market analysis and technology planning; however, the Legislature has yet to approve spending the funds. In January 2013, Michigan received a second Level One grant of $30.7 million to support creation of a consumer assistance partnership program, establishment of an IT system that coordinates with federal partners, and the plan management functions that Michigan will carry out. Michigan, along with nine other states, is receiving technical assistance from the Robert Wood Johnson Foundation through the State Health Reform Assistance Network; this assistance includes help with setting up health insurance exchanges, expanding Medicaid to newly eligible populations, streamlining eligibility and enrollment systems, instituting insurance market reforms and using data to drive decisions.

Next Steps

On March 5, 2013, Michigan received conditional approval from the U.S. Department of Health and Human Services (HHS) to establish a partnership exchange. Final approval is contingent upon the state demonstrating its ability to perform all required Exchange activities on time; complying with future regulations; establishing a memorandum of understanding (MOU) between the Michigan Department of Licensing and Regulatory Affairs (LARA) and the state’s Medicaid agency that defines each agency’s role and responsibilities; and obtaining legal and spending authority for Exchange activities.

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