Health insurance exchange state rankings: 9 top performers

The Affordable Care Act (ACA) required all states to implement state-based health insurance exchanges. Though the government required states to meet certain requirements in relation to these exchanges, states vary when it comes to how the exchanges are implemented and the services they provide patients.

The National Health Council (NHC) recently released "Enhancing the Patient-Centeredness of State Health Insurance Markets," which it describes as a "state progress report" of state health insurance exchanges. The reports are meant to illustrate the variability of the "patient-centeredness" of health insurance exchanges, and to identify states that set "best practices for patient-friendly requirements," according to the NHC.

The analysis, based on a proprietary database of policy developments maintained by Avalere Health, describes how states performed in five areas as of January 1, 2015.

1. Nondiscrimination: Whether plans discriminate or impede access to care, such as through limited provider networks.

2. Transparency: Whether plans provide clear and accurate information for consumers.

3. State oversight: Whether all exchange plans meet state and federal requirements.

4. Uniformity: Whether exchanges create standards to make it easier for patients to compare plans.

5. Continuity of care: Whether exchanges broaden sources of coverage and protect patients transitioning between plans.

Here are nine states the report identified as "high-performers" in key areas.

California: For Uniformity, Nondiscrimination, State Oversight, and Continuity of Care

California requires standardized benefit designs across all plan levels and it does not allow any non-standard plans in the exchange. The state is also working toward continual improvement through a consumer survey quality rating system, according to the report.

The standardized benefit designs across all metal levels, means that all people enrolled in the same metal level encounter the same cost sharing for the same benefits, says Marc Boutin, NHC chief executive officer. California, he adds, is also the only state that lists potential out-of-pocket costs for each plan, depending on whether consumers determine they are a high, medium, or low user of healthcare.

New York: For Nondiscrimination, State Oversight, Uniformity, and Continuity of Care

In all four of the above areas, the report characterized New York as a high-performing state. It actively negotiates with plans to participate in the exchange, it has standardized benefit designs, it uses a quality rating system, and it was the first state to enact legislation to limit specialty tiers.

New York is a low performer, however, when it comes to transparency, according to the report. One reason: Its website lacks formulary and provider search tools.

"Patients want and need better and more detailed information in order to choose health plans that meet their health and budget needs," says Boutin. "Yet, all but 10 of the jurisdictions we analyzed (50 states plus [the District of Columbia) were classified as 'low-performing' on transparency."

Maryland: For Transparency, State Oversight, and Continuity of Care

Maryland's exchange website features a provider search engine which makes it easy for patients to find a plan that includes their doctor. The state also negotiates with plans to participate in the exchange.

"Maryland (a state-based exchange) is a trailblazer for requiring transparency of drug formularies for exchange plans," says Boutin. "Such information includes not only the tier placement that determines the level of coverage, but also the cost sharing for each medication covered."

In the categories of uniformity and nondiscrimination, Maryland is an average performing state, according to the report.

Washington: For Nondiscrimination and State Oversight

Washington stands out in the nondiscrimination metric, according to the report. It has high standards for coverage and grants the insurance commissioner broad author­ity to reject plans with discriminatory benefits. It also helps protect patient access to care, by making it clear that under certain conditions in-network costs apply to out-of-network providers.  

"Washington (a state-based exchange) has gone above and beyond minimum requirements in protecting patients from discrimination based on health status," says Boutin.

In the categories uniformity, continuity of care, and transparency, Washington is considered an average-performing state, according to the report.

Massachusetts: For State Oversight and Continuity of Care

The Massachusetts-state-based exchange negotiates with insurers, chooses which carriers can offer exchange plans, and sets criteria for partic­ipating plans, according to the report.  

In the categories of uniformity, non-discrimination, and transparency, it is an average-performing state.

Boutin says one of the report's key findings is that most states need to strengthen their efforts on plan affordability and non-discrimination.  "Regardless of the type of exchange established by the state, we identified jurisdictions that are implementing effective ways to improve the health insurance marketplace," he says. "But a significant amount of work still needs to be done to empower and protect patients as they navigate the exchanges.

Vermont: For State Oversight and Continuity of Care

Vermont funds cost-sharing reduction subsidies for a larger group of exchange enrollees than the federally funded program. The expanded population includes individuals and families with income between 250% and 300% of the federal poverty level.

It is an average performing state for nondiscrimination, transparency, and uniformity, according to the report.

Montana: For Nondiscrimination

Like Washington, Montana stands out in the nondiscrimination metric. It requires insurers to offer at least one silver, gold, and platinum exchange plan that uses copayments (rather than coinsurance) and that does not subject any drugs to the deductible, including the specialty tier, according to the report.

"While federal rules set minimum requirements for consumer protections, some states have emerged as leaders in implementing patient-centered standards and reforms," says Boutin.  "Montana (a federally-facilitated exchange) established a requirement that issuers offer at least one silver, gold, and platinum plan that uses copayments (rather than coinsurance) and subjects all drugs, including those in the specialty tier, to the deductible."

Montana is an average-performing state when it comes to oversight and uniformity, and is a low performing state for continuity of care and transparency.

Michigan: For State Oversight

Michigan requires issuers to standardize offerings inside and outside of the exchange, which unifies and stabilizes both markets and ensures that patients might be equally served by plans in either market.

For nondiscrimination, uniformity, and continuity of care, Michigan is an average-performing state, according to the report. It is a low-performing state for transparency, according to the report, which notes that the website lacks a formulary and provider search tool.

Delaware: For Continuity of Care

Delaware allows people to access prescriptions for 60 days and medical treatments for 90 days to ensure patients can maintain their treatment plans while changing plans or sources of coverage.

For nondiscrimination, uniformity, and state oversight, Michigan is an average-performing state, according to the report. It is a low-performing state for transparency, according to the report, which notes that the website lacks calculators to help estimate tax credit or out-of-pocket costs. 

"Our report is a unique benchmark for progress in managing health insurance exchanges," says Boutin. "While it highlights much-needed advancements, there is much work yet to do to empower and protect patients, and ensure they have access to necessary and affordable care."