States Can Be Flexible in Creating “Affordable Insurance Exchanges”
New federal regulations from the Department of Health and Human Services (HHS) give States considerable flexibility in creating “Affordable Insurance Exchanges,” an important part of health care reform. The Affordable Care Act (ACA) requires each State to have in place, by 2014, a health insurance exchange market where consumers and small businesses can compare and enroll in health plans, get answers to questions, and see if they are eligible for tax credits or subsidized programs like the Children’s Health Insurance Program (CHIP). HHS will set up a federal Exchange in those States that are unable or unwilling to operate their own.
Thirty-three States and the District of Columbia have received $667 million in establishment grants to build their Exchanges, with federal grants projected to total $3.4 billion by 2016. Of the States challenging the constitutionality of ACA, several have accepted federal funds; others have not. The administrative and financial burden of operating an Exchange has been a contentious issue, especially with tightening State budgets as the recession lowers tax revenue.
In a final rule published late March, HHS strived to address these concerns by allowing the States considerable leeway in their design and operation. “These policies give States the flexibility they need to design an Exchange that works for them,” said HHS Secretary Kathleen Sebelius. “These new marketplaces will offer Americans one-stop shopping for health insurance, where insurers will compete for your business. More competition will drive down costs and Exchanges will give individuals and small businesses the same purchasing power big businesses have today.”
HHS proposed guidelines, in July-August 2011, for design of the Exchanges; eligibility, enrollment, and certification of “qualified health plans;” tax credits for businesses; and subsidies for low and moderate income consumers. The final HHS rule gives States more flexibility in eligibility determinations, the role of agents and brokers, conditional approval, and the required timeline. Consumers will be able to sign up for coverage via websites, toll-free numbers, or “navigators” subject to certain standards. States can choose to combine the consumer (“American Health Benefits Exchanges”) and small business (“Small Business Health Options Program/SHOP”) Exchanges. States also have several options on how these will function. HHS has not issued a rule or regulations for how the federal Exchanges will operate.
Eileen Shannon Carlson, RN, JD