Policies Give States Flexibility with Insurance Exchanges

Ernie Shannon's picture
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Two years after the Affordable Care Act became law, the Department of Health and Human Services is seeking to broaden the number of States creating health insurance exchanges, a key linchpin for expanding health care coverage in the United States.

Health and Human Services Secretary Kathleen Sebelius yesterday announced new guidelines to assist States in establishing the exchanges which are designed to serve as one-stop shopping venues for health insurance. The marketplaces will allow consumers and small businesses to choose a private health insurance plan and offer the public the same kinds of insurance choices as members of Congress.

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“These policies give States the flexibility they need to design an exchange that works for them,” Sebelius said. “These new marketplaces will offer Americans a place 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.”

However, not all States have bought into the idea of setting up the exchanges. Many are awaiting the Supreme Court’s decisions regarding the constitutionality of portions or all of the Affordable Care Act and have elected to postpone any movement regarding the insurance marketplaces. The administration, though, has argued that if States wait until the court’s decision in June to begin planning the exchanges, they will be so far behind that implementation would be hurried and mismanaged. The date at which the exchanges must be up and running throughout the nation is January 2014.

The new policies focus on two areas: 1) Setting standards for establishing exchanges; arranging a Small Business Health Options Program; performing the basic functions of an exchange; and certifying health plans for participation in the exchange. 2) Establishing a streamlined, web-based system for consumers to apply for and enroll in qualified health plans and insurance affordability programs.
Sebelius said the second rule builds on the flexibility and resources provided by Health and Human Services already to build State-based exchanges. Not long after the passage of the Affordable Care Act, the administration provided $50 million to 49 States and the District of Columbia. That money was targeted to spur research and early planning in the States. Once states began putting plans to paper, the federal agency awarded another $667 million to those States to begin building the exchanges.

To underscore the administration’s push to get exchanges established, Health and Human Services examined exchange models, convened meetings and regional sessions around the country, and talked with State leaders, consumer advocates, and insurers. The announcement yesterday ended a 75-day period in which the general public could comment on the exchanges.

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