Decisions, Decisions, Decisions: Appointing an Exchange Board

Last week on State Refor(u)m we explored the various governance models states are choosing as they work on Exchange enabling legislation. While all Exchange state legislation we’ve received atState Refor(u)m establishes an Exchange governing board, states are taking different approaches to board members. How many, who they represent, what type of expertise they have, and what their voting abilities are varies considerably from state to state.
Appointing a Governing Board
States are employing a variety of approaches for appointing their board members. For example:

• Rhode Island’s introduced SB 0087 would establish a board comprised of eleven members, including three executive agency heads and eight members appointed from the general public appointed by the governor, with approval by the legislature.
• Connecticut’s introduced HB 6323 would create a board of fourteen members, including four executive agency heads, and the others appointed by the governor and legislative leaders.
• Texas’ introduced HB 636 would create a seven-member board, with some members appointed by the governor with input from the lieutenant governor and the speaker of the house, and agency heads as nonvoting members.

Members of the Board
States are also weighing the need for board members with health insurance knowledge and expertise with conflicts of interest that these choices could create. Some states explicitly prohibit insurers and brokers from serving on the board, while others require their membership. States are also recognizing the need for a diverse group of stakeholders, with some requiring representation that includes consumers, providers, and small employers.

• Texas’ introduced HB 636 requires at least three of the five appointed board members to have experience in health care economics, administration or insurance or at the least be knowledgeable about business and actuarial matters. One appointee must represent consumers, one must represent small employers and one must be an enrollee of a health plan. Lobbyists are not allowed to serve on the board, but the legislation is silent on insurers and brokers serving on the board. Conflict of interest provisions state that members must recuse themselves from matters that they have an interest in.
• Mississippi’s introduced HB 1220 requires three representatives of insurance producers, three provider representatives, a hospital administrator, an actuary, a business owner, and one consumer advocate. One producer representative must be from an insurance company with less than 5% market share, one must be nominated by health underwriters, and the third must be nominated by insurance agents. Health providers include representatives from the state medical association, the state surgical association, and the state primary care association. The bill also requires geographic variation, race, and gender be taken into consideration when making these appointments. Board members are not compensated and are presumed to be acting “in good faith.” The insurance department has regulatory and oversight authority over the Exchange.
• Maryland’s introduced SB 182 requires three members who represent consumer and employer interests, as well as three members who each have knowledge and expertise in at least two of the following areas: individual or small group health care coverage, health benefit plan administration, health care finance, administration of health care delivery systems, or purchasing and enrollment in health care coverage. However, it prohibits any affiliation (including financial, membership, or as a lobbyist) with a carrier, insurance producer, third party administrator, or trade association of entities that do business with the Exchange. Finally, the bill requires that the board’s makeup reflect the geographic, gender, racial and ethnic diversity of the state, and that the board also reflect diversity in expertise.

Is your state working on Exchange governance decisions? Please send draft legislation—and any other Exchange or health reform-related materials—to State Refor(u)m atstatereforum@nashp.org.