Alabama Health Insurance Exchange

Default to a Federally Run Health Insurance Benefits Exchange, to open January of 2014

The state of Alabama has nearly three quarters of a million state residents without heath insurance; this is equal to a little bit over fifteen percent of the state’s population. This problem is not confined to Alabama, or even to the southern states. At least forty-eight of the fifty states are currently experiencing a health care crisis with far too many people living without health insurance coverage. To respond to this growing problem, President of the United States Barack Obama signed the Patient Protection and Affordable Care Act (ACA) into law on March 23, 2010. In 2011, Alabama Governor Robert Bentley, himself a physician, created a commission to conduct studies and determine feasibility and make recommendations for how Alabama should respond to the changes required by the new law.

One of the key requirements of the new law is the need for each state to host a Health Insurance Benefits Exchange for their residents. A Health Insurance Benefits Exchange is to serve as a competitive marketplace for consumers where they will be provided the tools necessary to compare available health insurance policies and choose the one that best suits their health needs and budgetary limitations. Most of the shoppers in these new exchanges will be new to purchasing health insurance, so an integral part of the exchange creation will be a user-friendly comparison tool that allows shoppers to easily compare the available policies based on cost, quality, types of coverage, usage statistics, member satisfaction and member complaints. Before the enactment of this legislation, most Americans only had one way to access affordable health care insurance for themselves and their family, and that was by being employed full-time at a large employer who was able to negotiate on their employees’ behalf with private insurance companies. Outside of this, all Americans were forced to shop for health insurance on the private, open market, which is prohibitively expensive, especially for middle class Americans and those that are unemployed, underemployed, self-employed or employed by small business.

The commission created by the governor met for three months and released their final recommendations near the end of November of 2011. They recommended that the state set up a quasi-public authority to operate the exchange. So in May of 2012, the Alabama legislature attempted to pass exchange legislation which was threatened with a veto from the governor. During the planning and decision phases, Alabama received two federal grants. The first was a $1 million planning grant and the second was an $8.6 million level one establishment grant. On November 13 2012, Governor Robert Bentley announced that Alabama had decided not to pursue an independent exchange. If legislation is reintroduced to go ahead and develop a state-run exchange, Alabama would only have until December to submit their declarations letter and the exchange blueprint to the Department of Health and Human Services for approval. This is unlikely based on the governor’s November announcement. Instead, the federal government will partner with a non-profit to administer the state of health insurance exchange.