Rules For New Insurance Marketplaces Give Insurers Clout

By Julie Appleby

KHN Staff Writer

Mar 12, 2012

Insurers and other industry representatives will get to fill as many as half the seats on the governing boards for state health insurance exchanges, under final rules for the marketplaces issued today by the Department of Health and Human Services.  At least one seat must be reserved for a consumer representative.

The long-awaited rules are likely to disappoint consumer advocates who would have preferred the governing boards “be dominated by consumers,” said Timothy Jost, who speaks as a consumer advocate before the National Association of Insurance Commissioners and is a professor at the Washington and Lee University School of Law.  But Jost said he is pleased the final rules require at least one consumer representative. “It at least gives a toe-hold,” he said.

But they may also frustrate insurers who had sought to prevent the governing boards from imposing requirements on plans beyond what is included in the 2010 health care law. HHS left that possibility in place, however, writing, “We continue to believe that states are best equipped to adapt the minimum exchange functions to their local markets and the unique needs of their residents.”

The exchanges are seen as a key element in the health law, offering one-stop shops for individuals and small businesses looking to purchase health insurance. They will also help determine applicants’ eligibility for programs such as Medicaid, and for federal subsidies to help them purchase insurance. An expected 21 million people will purchase coverage through the exchanges by 2017, according to Congressional Budget Office projections.

The Obama administration touted the 644-page rules as granting states great flexibility in how they design their exchanges, the types of organizations – nonprofit or public agency – that will oversee them and whether to partner with the federal government to operate parts of it. The rules were published as some states are working to set up exchanges and their governing boards – while others have balked at moving forward until after the Supreme Court rules on the constitutionality of the federal health law, which is expected in June.

Additionally, Monday’s announcement included some “interim” rules, meaning they could be tweaked following a 45-day public-comment period. Those interim rules cover issues such as how quickly states must determine if an applicant is eligible for Medicaid or the Children’s Health Insurance Program, and the role insurance brokers will play in helping low- and middle-income people apply for federal subsidies to buy coverage.

Administration officials said the new rules differ from preliminary regulations in several ways. Earlier guidance had proposed that each exchange be responsible for determining which applicants are eligible for insurance subsidies.  The final rule gives states the option to allow HHS to conduct eligibility review. To determine who is eligible for Medicaid or the Children’s Health Insurance Plan, states can choose their own Medicaid agencies.  It also says states cannot allow insurance agents to determine an applicant’s eligibility for subsidies or Medicaid, which remain government functions. But agents, including those who work for web-based private exchanges, can assist those applicants in sorting through their health plan options.

The rules appear to strike a balance between responding to thousands of comments about earlier proposals and providing more details “so states can move forward,” says Patti Boozang, managing director at Manatt Health Solutions, a law and consulting firm based in New York.

The rules do not explain how the federal government would set up exchanges in states that are unable or unwilling to develop their own marketplaces, with those details promised in future rules. In January, the Obama administration released a report saying about 28 states are “on their way” toward establishing exchanges.  “There’s no new information on how that would work, what the partnership model would look like or what states would have to pay – and that’s all information many states have anxiously awaited,” says Boozang.

Karen Ignagni, President and CEO of America’s Health Insurance Plans (AHIP), a trade group, said her organization would be reviewing the rule and offering feedback.

“Exchanges will work best if they are true marketplaces that maximize choice and competition so that individuals, families, and small businesses can purchase plans that are right for them,” she said in a prepared statement. “Consumers will be best served if a state exchange adopts an efficient, cost-effective approach that leverages existing health plan resources, utilizes federal resources or guidance where sensible, and relies on the exchange itself to administer key functions.”

The law says the exchanges will start taking applications in Oct. 1,  2013 – and policies purchased through them would take effect Jan. 1, 2014.  States that are allowed to operate their own exchanges must have approval or conditional approval from HHS by Jan 1, 2013, according to the rules.

In a nod to the fact that some states won’t be able to meet that deadline, the final rules say HHS can grant conditional approval to states that show they are likely to be fully operational by October 2013. Details on what it will take to prove that are expected in future rules.

SOURCE:
http://www.kaiserhealthnews.org/Stories/2012/March/12/insurance-exchange-rules-hhs-states.aspx

Consumer Groups Ask Obama To Not Weaken Provisions For Insurance Labels

By Susan Jaffe

January 24th, 2012, 6:03 PM

Leaders from some of the nation’s top consumer and seniors advocacy groups today urged President Barack Obama not to weaken a key consumer provision of his signature health care overhaul law.

The provision requires health insurers and employers to use standardized, easy-to-understand information documents to describe health plan benefits and costs.   These forms would explain how much each plan pays on average for three common medical conditions and include a glossary of insurance terms.

“The summary of benefits and coverage [document] is a vital first step in making consumers better informed and able to make the proper decisions for themselves,” said Stephen Finan, senior director for policy for the American Cancer Society Cancer Action Network, one of the signers of the letter to the president.  In some states, information about providers and other policy details are not disclosed until after a consumer applies for coverage, he said.  Shoppers today, he explained, can get better information about buying a new washing machine than they can about a health insurance policy.

“You pay first and learn later,” he said.

The letter was signed by the chief executive officers of the American Cancer Society, American Heart Association, American Diabetes Association, Consumers Union and AARP, which has 37 million members age 55 and older.

According to the law, the forms are supposed to be distributed starting March 23, but the groups are worried about the administration’s long delay in setting final regulations that spell out how to use the forms. The draft regulations that include the proposed forms were issued in the summer and the administration has been reviewing comments on those. “As the Administration approaches its final decisions on the [summary of benefits and coverage] rule, we strongly encourage you to adhere to the letter of and intent of the Affordable Care Act,” the CEOs wrote.

Although they concede that there’s probably not enough time to meet the March deadline, they would like the forms available for the fall open enrollment season for group insurance plans.   They also urged that the forms be used in both group and individual insurance plan markets, , as the law and proposed rules require, and that they include premium price information as well as several coverage examples.

In comments on the proposed rules, insurance and business trade associations explained how some of these features would be difficult to implement now and asked for further delays.

The new forms were written by a working group of the National Association of Insurance Commissioners, which included industry and consumer representatives along with state insurance regulators and were later incorporated into the administration’s proposed rules.

Erin Shields, a spokeswoman for the U. S. Department Health and Human Services declined to say whether the final rules will favor the positions taken by industry or consumer groups.

“As always, we appreciate this and all feedback and value a constructive dialogue on this important, new consumer protection,” she said.

This entry was posted on Tuesday, January 24th, 2012 at 6:03 pm.

Source:

To view this article by Susan Jaffe for Kaiser Health News in its original context, please visit http://capsules.kaiserhealthnews.org/index.php/2012/01/consumer-groups-ask-obama-to-not-weaken-provisions-for-insurance-labels/

Report says Affordable Care Act will significantly change Kentucky’s spending on uninsured

  • The Urban Institute has released a report (PDF) on how states are progressing toward adopting the federal Affordable Care Act. Kentucky is among the states that “have not yet established exchanges, but have demonstrated significant interest in doing so. Most notably, 17 of the 21 states have received level 1 federal establishment grants, which represent a second round of funding for state exchange development work beyond the initial state planning grants.” When Kentucky enacts ACA, the state will experience the largest percentage drop in the nation (87 percent) for uncompensated spending on care for the uninsured.

  • Source:
    To view this article by Lu-Ann Farrar for Kentucky.com in its original context, please visit http://www.kentucky.com/2012/01/24/2040769/kentucky-news-review-report-says.html#storylink=cpy