The Obama administration released more than 600 pages of guidance on Monday outlining a flexible framework for how states should go about enrolling uninsured Americans in new insurance exchanges under the president’s health-care overhaul.
Secretary of Health and Human Services Kathleen Sebelius said the rule leaves plenty of room for states to choose an approach that works best for them, saying they can decide key questions for themselves — like whether to operate the exchange as a nonprofit organization or a public agency and how to decide which plans can participate.
“These policies give states the flexibility they need to design an exchange that works for them,” Mrs. Sebelius said. “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.”
Faced with the massive administrative challenge of implementing President Obama’s health care law, HHS has stressed flexibility as it guides states toward setting up insurance exchanges where some 30 million Americans will be able to shop for plans that provide essential benefits and obtain federal subsidies to help pay for them.
States also face a series of logistical hurdles if they want to set up their own exchange by the January 2014 deadline instead of relying on a federal exchange.
They must create an efficient system to determine who qualifies to participate in the exchange, figure out whether they’re eligible for any subsidies and enroll them in a plan that meets all the essential coverage requirements outlined in the health care law.
While some states immediately started working toward an exchange when the law was passed in 2010, others are dragging their feet and some refuse to act until the Supreme Court rules on constitutional challenges to the law or after the November election.
Under the newest rule, states will have more time to set up exchanges so that even if they don’t achieve certification by the January 2013 deadline, they could still receive “conditional approval” by demonstrating progress. If they still aren’t ready by 2014, and the federal government steps in, states may still apply to assume oversight later.
States can also decide how to admit plans to the exchange, either by letting any plan meeting the standards of minimum coverage participate, or by having plans compete to participate. They can choose between using an application form provided by the federal government or designing their own. They can also decide whether large employers with more 100 employees will be allowed to shop in the exchange beginning in 2017.
State officials offered mixed reactions to the rule. Some complained that the administration is leaving too many questions unanswered, making it difficult for them to meet the deadlines outlined in the law, while others applauded the agency’s approach.
“I think what it does is give states the opportunity to be the laboratories of democracy,” said Kansas Insurance Commissioner Sandy Praeger, who has also served as president of the National Association of Insurance Commissioners. “It allows states to build on what currently exists in their state. I think the state flexibility is a very good thing.”
Virginia Secretary of Health and Human Services Bill Hazel said that while he wouldn’t criticize HHS for its approach to an “almost impossible task,” he would like to see the deadlines pushed back by at least six months — even though he said Virginia has “as good a chance as any” to get an exchange up and running by 2014.
He said he won’t know whether Virginia has enough information to move ahead on an exchange until he reads the rule — all 644 pages of it.
“We’ll read through the rules and see what questions they answer and then we have to fill in the blanks for the rest,” Mr. Hazel said.
Meanwhile, Karen Ignagni, president of America’s Health Insurance Plans, said she looks forward to reviewing the rule and praised it for handing states some autonomy in meeting the requirements of the health care law.
“This rule recognizes that states are in the best position to establish exchanges because they have the experience and local market knowledge needed to best meet consumers’ needs,” she said. “States need to be given flexibility to ensure that individuals, families and small businesses have access to options that work best for them.”
• Paige Winfield Cunningham can be reached at pcunningham@washingtontimes.com.
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