HHS Issues Final Rule on State Health Insurance Exchanges

TOPIC ALERT:

On Monday, HHS Secretary Kathleen Sebelius announced the release of the final rule for state-based health insurance exchanges under the federal health reform law, The Hill's "Healthwatch" reports (Pecquet, "Healthwatch," The Hill, 3/12).

Background

Under the federal health reform law, states by January 2014 must create insurance exchanges that provide coverage options for individuals and small businesses.

States can choose to administer their own exchanges -- for which they must have some infrastructure in place by January 2013 -- or ask the federal government to run the exchanges for them.

Most health insurance exchanges will rely on a solid IT foundation to link up with advanced eligibility systems for Medicaid and other state-administered health programs (iHealthBeat, 7/28/11).

Details of the Final Rule

The 644-page final rule outlined the minimum standards that states, employers and health insurers must meet to operate or participate in the exchanges (Daly, Modern Healthcare, 3/12).

According to HHS, the final rule aims to give states the flexibility to design their own exchanges while providing them with guidance on how to:

  • Certify health plans for participation in an exchange;
  • Develop a Web-based system for consumers to apply for and enroll in qualified health plans and insurance affordability programs;
  • Establish a small business health options program;
  • Perform the basic functions of an exchange; and
  • Set standards for establishing an exchange (HHS release, 3/12).

Providing States With Flexibility

Last week, federal officials highlighted several areas in the rule that aim to provide states with flexibility. For example, officials said states can:

  • Run an exchange through an existing agency or through a newly created not-for-profit entity;
  • Open their exchange to all insurers or limit the number of health plans available;
  • Decide how large of a role insurance agents and brokers will have in selling health plans through exchanges; and
  • Choose to allow larger employers to participate in exchanges (Pear, New York Times, 3/9).

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