The U.S. Department of Health and Human Services (HHS) has proposed a framework to assist states in building affordable insurance exchanges, state-based competitive marketplaces where individuals and small businesses will be able to purchase affordable private health insurance and have the same insurance choices as members of Congress.
Starting in 2014, the exchanges will make it easy for individuals and small businesses to compare health plans, get answers to questions, find out if they are eligible for tax credits for private insurance or health programs such as the Children's Health Insurance Program (CHIP), and enroll in a health plan that meets their needs, according to the agency.
"Insurance companies will compete for business on a transparent, level playing field, driving down costs, and exchanges will give individuals and small businesses the same purchasing power as big businesses and a choice of plans to fit their needs," stated HHS Secretary Kathleen Sebelius in a press release.
The proposed new rules offer states guidance and options on how to structure their exchanges in two key areas:
- Setting standards for establishing exchanges, setting up a Small Business Health Options Program (SHOP), performing the basic functions of an exchange, and certifying health plans for participation in the exchange
- Ensuring premium stability for plans and enrollees in the exchange, especially in the early years as new people come in to exchanges to shop for health insurance.
The proposed rules set minimum standards for exchanges, give states the flexibility to design exchanges that best fit their insurance markets, and are consistent with steps states have already taken to move forward with exchanges, according to the HHS.
Forty-nine states, the District of Columbia, and four territories have accepted grants to help plan and operate exchanges. In addition, more than half of all states are taking additional action beyond receiving a planning grant, such as passing legislation or taking administrative action to begin building exchanges. States will continue to implement exchanges on different schedules through 2014.
In drafting these proposals, the administration examined models of exchanges, held numerous meetings with stakeholders, and consulted closely with state leaders, consumer advocates, employers, and insurers. To continue that conversation, HHS is accepting public comment on the proposed rules during the next 75 days to learn from states, consumers, and other stakeholders how the rules can be improved, and HHS will modify these proposals based on feedback. To facilitate that public comment process, HHS said it will convene a series of regional listening sessions and meetings.
To reduce duplication of efforts and the administrative burden on the states, HHS also announced that the federal government will partner with states to make exchange development and operations more efficient. States can choose to develop an exchange in partnership with the federal government or develop these systems themselves. This provides states more flexibility to focus their resources on designing the right exchanges for their local insurance markets.
