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HHS Issues Final Rule on State Health Insurance Exchanges

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, Modern Healthcare reports (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 and exchange (HHS release, 3/12).

Preview of the Final Rule

During events last week, officials previewed the final rule.

Speaking on Thursday at a conference hosted by America's Health Insurance Plans, senior HHS official Timothy Hill said the department is "doing everything we can to help states get ready. But we are not naive. There is a likelihood that some states won't be ready." Hill said HHS aims to "give states as much flexibility as possible to choose what works for them."

Federal officials highlighted several areas in the rule that provide states with flexibility. For example:

  • States can run an exchange through an existing agency or through a newly created not-for-profit entity;
  • States have the option to open exchanges to all insurers, or they can limit the number of health plans available;
  • States can decide how large of a role that insurance agents and brokers will have in selling health plans through exchanges; and
  • States can choose to allow larger employers to participate in exchanges (Pear, New York Times, 3/9).

Some State Lawmakers Delaying Implementation

Many state lawmakers are reluctant to move forward with implementing the exchanges until the Supreme Court rules on the reform law's constitutionality, according to Joy Johnson Wilson, federal affairs counsel and health policy director at the National Conference of State Legislatures, CQ HealthBeat reports.

"[I]t's fair to say that legislation has kind of slowed," Johnson Wilson said, noting that many lawmakers are taking a "wait-and-see approach" in anticipation of the high court's oral arguments this month. Legislators do not want to make plans that have to be revisited and revised, Johnson Wilson said (Norman, CQ HealthBeat, 3/9).

Oregon Gov. John Kitzhaber (D) last week signed a bill that specifies how the state's health insurance exchange will work. California, Connecticut and Washington are also moving forward to implement exchanges.

Others, including Florida and Texas, have not moved forward with plans. Likewise, the New Hampshire House of Representatives last week approved legislation to prohibit state and local officials from planning or creating the state's exchange. State Rep. Andrew Manuse (R) said the measure is "part of a national effort to amend, repeal or replace the federal health care law" (New York Times, 3/9).

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