HHS Unveils New Healthcare Exchange Rules

For example, each state can structure its Exchange in its own way: as a non-profit entity established by the state, as an independent public agency, or as part of an existing state agency. In addition, a state can choose to operate its Exchange in partnership with other states through a regional Exchange or it can operate multiple Exchanges that cover distinct areas within the state. Any combination of these options can be approved. Exchanges that are run by independent agencies or non-profits must have governance principles, include consumer representation, and that ensure freedom from conflicts of interest and promote ethical and financial disclosure standards.

Exchanges will perform a variety of functions, including:

• Certifying health plans as "qualified health plans" to be offered in the Exchange
• Operating a website to facilitate comparisons among qualified health plans for consumers
• Operating a toll-free hotline for consumer support, providing grant funding to entities called "Navigators" for consumer assistance, and conducting outreach and education to consumers regarding Exchanges
• Determining eligibility of consumers for enrollment in qualified health plans and for insurance affordability programs (premium tax credits, Medicaid, CHIP and the Basic Health Plan)
• Facilitating enrollment of consumers in qualified health plans.

 The rule was issued as an interim final rule, meaning that further comment – and likely further clarifications or changes, can still be made.

In releasing the rule, HHS officials said that states will "have substantial flexibility in determining how to perform these functions.

It says the final rule tries to simplify the process for states' Blueprints for Exchanges to be approved and updated; empowers states to determine a role for agents and brokers – including the use of on-line brokers; and removes processing of appeals from minimum Exchange functions.

The final rule allows exchanges to work with health insurers on structuring qualified health plan choices that are in the best interest of their customers, HHS said.

"This could mean that the Exchange allows any health plan meeting the standards to participate or that the Exchange creates a competitive process for health plans to gain access to customers on the Exchange.

Regarding standards for health plans, the final rule allows exchanges, working with state insurance departments, to set specific standards to ensure that each qualified health plan gives consumers access to a variety of providers within a reasonable amount of time.

HHS officials also said that exchanges will also establish marketing standards to make sure that qualified health plans do not market plans in a way that discriminates against people with illnesses.

"It also gives exchanges flexibility to set the timeframes in which health issuers need to become accredited for their quality performance (if they are not already), allowing consumers access to new and innovative health plans through the exchange as they gain accreditation," HHS officials said.

"And it amends the grace period policy to ensure that qualified health plans can provide seamless coverage without being left paying all the bills.

The rule prompted swift reaction from both the National Association of Insurance and Financial Advisors.

"NAIFA is pleased that the final HHS rule acknowledges the significant role agents will play in the state health care exchanges and has incorporated our suggestion allowing exchanges to display information about the valuable role of agents and brokers on their Web sites and in other public materials," said NAIFA President Robert Miller in reaction to the final rule. "We remain concerned that the regulations fail to adequately protect consumers by allowing well-intentioned Navigators in the exchange systems to forego errors and omissions coverage."

The final rule prompted similar reaction from America's Health Insurance Plans.

 "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," said AHIP President and CEO Karen Ignagni said in a statement. She added that states need to be given flexibility to ensure that individuals, families, and small businesses have access to options that work best for them. She also stressed the need that the exchanges do not duplicate existing state regulations that might add complexity or increase costs for consumers.