The U.S. Department of Health and Human Services (HHS) released its final rule on state health insurance exchanges Monday, setting the framework under which states develop their online marketplaces.
The Jan. 1, 2013, deadline has loomed for state officials: under the Affordable Care Act (ACA), states must demonstrate by that date that they can operate an exchange if they have chosen to do so. Under the final rule, HHS will offer conditional approval to state plans if the states have made progress by January 2013, but aren’t ready to submit their final exchange blueprint. The department will also allow states that initially have an exchange run by the federal government in 2014 to take over their marketplace in 2015 and onward.
States have the option of establishing the exchange as a non-profit entity, an independent government agency or as part of an existing state office. States may also join a multi-state effort to set up a regional exchange or create multiple exchanges within their borders for different areas of the state. Any of these models will be approved by HHS, according to the final rule.
The final rule also sets guidelines for states to certify health insurance plans that will be sold on the marketplaces, giving states the authority to determine the number and type of health plans available and what standards they must meet. The specifics of those standards have been set out in previous HHS bulletins on essential health benefits, which also gave states several options in establishing what must be offered in plans sold on the exchanges.
Regarding the eligibility elements of exchanges, HHS has set out two scenarios for exchanges to interact with state Medicaid offices, which will be preparing for a substantial expansion of enrollees under the ACA. States can either have their exchanges make final determinations about whether an individual qualifies for Medicaid or a federal subsidy for insurance, or the exchanges can make a preliminary assessment and refer the case to the state Medicaid office for processing.
A key part of exchanges is the Small Business Health Options Program (SHOP). It allows small businesses to offer different health insurance options for their employees, allowing them to pick a plan that fits their needs and presumably save money for the businesses. Under the final rule, states will make the final decisions about what size of businesses can participate in SHOP and what choices they can offer their employees.
Thirty-three states have received nearly $670 million in establishment grants to develop their exchanges, according to HHS. Exchanges are scheduled to begin enrollment in October 2013 and officially open for business on Jan. 1, 2014.