The Obama administration promised states more flexibility in setting up health insurance exchanges through guidelines released Monday under the new health care law.
Even if states don’t achieve certification by the January 2013 deadline for setting up exchanges, they could still receive “condition approval” if they demonstrated progress. If they still aren’t ready by 2014, and the federal government steps in, states may still apply to assume oversight later on.
The exchanges are intended to serve as centralized marketplaces where consumers can compare insurance products.
Secretary of Health and Human Services Kathleen Sebelius emphasized the flexibility as she announced 244 pages of new regulations, which included guidance on re-insurance and risk-adjustment programs intended to stabilize premiums and other standards for establishing exchanges.
“It sets out a framework that says every state may choose a little bit different option,” Mrs. Sebelius said. “We set out some minimum standards, but the fact that some states may choose an active purchaser, like Massachusetts, and some other states may use a more open market, like Utah, is perfectly allowable and flexible.”
Exchanges and government subsidies are intended to make health insurance options more accessible to middle-class workers earning up to 400 percent of the federal poverty level.
While the new guidelines do offer some new direction on how to set up an exchange, they don’t address essential benefits or eligibility guidelines — details that states say they need to move forward.
Cindi Jones, head of a council to implement the new health care requirements in Virginia, said she’s concerned those details won’t be released in enough time for the state to meet the certification deadlines.
“We understand that the federal government is as busy as we are, but all states worry about the deadline in general because it is coming so close,” Ms. Jones said.
More specific guidelines will be on the way later in the year, said Donald Berwick, administrator for the Centers for Medicare and Medicaid Services. For now, the regulations do lay out a number of different options for how exchanges may be structured, including a hybrid model that would include both federal and state oversight.
“The regulations reflect a partnership approach,” Mr. Berwick said. “Not every state is necessarily going to be prepared to perform every exchange function. We can meet the states where they are.”
Like Virginia, most states have chosen to operate their own exchanges, accepting federal grants to assist with getting them off the ground. At least 31 states have approved some type of legislation governing the establishment of exchanges, according to the National Conference of State Legislatures.
Passing without a single Republican vote, the health care law has been at the center of controversy as nearly 30 states are suing the federal government over a mandate for individuals to purchase health insurance. The administration is trying to make implementation easier for states as they try to comply with the exchange component.
Each state’s model will look a little different, said Steve Larsen, director of the Center for Consumer Information and Insurance Oversight for CMS.
“Whether it’s a federally issued exchange, a state-based exchange or a partnership where some functions would be performed in partnership, our hope is to come up with a solution for every state.”