Heath and Human Services Secretary Kathleen Sebelius, middle, makes her way to a news conference in July to announce a preliminary framework on health insurance exchanges. She issued the final regulations Monday. Photo by Tom Willaims/Roll Call.
Just two weeks before the Supreme Court begins considering whether to strike down the federal health reform law, the Obama administration issued more guidelines for the law’s full-scale implementation.
The much-anticipated final regulations for health insurance exchanges — released Monday in a 644-page document — emphasized the broad latitude states will have in developing and implementing their own health insurance marketplaces by 2014. The virtual shopping centers will aim to make the process of buying health insurance as easy as navigating a site like Amazon.com and are expected to serve about 21 million Americans by 2017.
According to Health and Human Services Secretary Kathleen Sebelius, the final exchange regulations give states “the flexibility they need to design an exchange that works for them.” She also reiterated the administration’s belief that the exchanges will boost competition in the individual and small-business marketplace and will give both groups “the same purchasing power big businesses have today.”
Critics didn’t buy it. Virginia Gov. Bob McDonnell issued a statement saying the “flexibility” claim is a vague attempt by the Obama administration to hide the fact that it has “overpromised, oversold and under-delivered.”
“This administration’s inability to provide critical guidance to their broken health care reform mandate gives more and more credence to the necessity of the Supreme Court ruling this law unconstitutional,” McDonnell said.
At the other extreme, Ron Pollack, founding executive director of the pro-health care reform Families USA, called the rules “a major milestone on the path to consumer empowerment.” He praised the initial six-month enrollment window, the fact that each exchange will need to have at least one voting board member who is consumer-interest advocate, and a new rule that will ensure that appropriate “navigators” be available to help consumers sort through expanded coverage options.
What exactly is in these new rules?
Appleby: These changes incorporated a couple new things. One of the biggest is that a consumer representative must now sit on every governing panel set up to oversee the exchanges. Up to half of the board can be made up of insurers or other industry representatives, but at least one consumer representative must be present and able to vote. The new rules also include a little bit of information about partnerships. If a state can’t run its own exchange by the deadline — or if they can’t run a piece of it — it can partner with the federal government to do that. Additionally, the rules lay out what type of organization is going to oversee the exchange. It could be a state agency or nonprofit group, which gives the states flexibility. One of the other key things these exchanges will do is determine who qualifies for tax credits and subsidies to help buy insurance and who qualifies for the Medicaid expansion in 2014.
Is there now a clearer timeline for the rollout of these exchanges?
Appleby: States need to be ready to start enrolling people in the exchanges by October of 2013. Even before that, by January of next year, they have to be able to say, ‘We’re on track to meet that deadline.’ The federal government is acknowledging that some states aren’t going to make it. So it’s now possible for a state to receive conditional approval, where officials can say, ‘We think you’re going to be ready except in a couple areas, so we can help you fill that gap.’
The administration has repeated often how flexible these exchange will be for states. Is that accurate?
Appleby: The regulations keep things pretty broad, and I think states certainly want that kind of flexibility. Some wanted more of a national standard so things don’t vary so much, but the federal government says things will go most smoothly and work best if the states are able to determine the specifics of implementation. So like with many rules associated with health reform, they’ve tried to keep things flexible.
Since these are the final rules, is there anything that’s been left undetermined at this point?
Appleby: This does not include information about the federal fallback exchange for states that can’t implement an exchange of their own or the ones that refuse to implement any part of the health care law. That’s coming in a future rule. They’ve also included some interim final rules that now have a 45-day comment period, including the provision about how long it should take to find out if you’re eligible for some of these subsidies or for the Medicaid expansion.
Curious about how the exchanges could play out in your state? Last summer, Health Correspondent Betty Ann Bowser traveled to Utah, a state with a big head start, to see how small businesses have fared under the expanded marketplaces. Check out the video below.