The Department of Health and Human Services (HHS) has proposed a framework to help states build Affordable Insurance Exchanges. Under the Affordable Care Act (ACA) Exchanges will be effective in 2014.
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Get Your Report Now!The Exchanges are state-based competitive marketplaces where individuals and small businesses will be able to purchase private health insurance. The HHS promotes Exchanges, saying they “will make it easy for individuals and small businesses to compare health plans, get answers to questions, find out if they are eligible for tax credits for private insurance or health programs like the Children’s Health Insurance Program (CHIP), and enroll in a health plan that meets their needs.“
HHS proposed new rules offers states guidance and options on how to structure their Exchanges in two key areas:
- Setting standards for establishing Exchanges, setting up a Small Business Health Options Program (SHOP), performing the basic functions of an Exchange, and certifying health plans for participation in the Exchange, and;
- Ensuring premium stability for plans and enrollees in the Exchange, especially in the early years as new people come in to Exchanges to shop for health insurance.
These proposed rules set minimum standards for Exchanges and are intended to give states the flexibility they need to design Exchanges that best fit their unique insurance markets and be consistent with steps states have already taken to move forward with Exchanges.
Forty-nine states, the District of Columbia and four territories accepted grants to help plan and operate Exchanges. In addition, over half of all states are taking additional action beyond receiving a planning grant such as passing legislation or taking Administrative action to begin building exchanges. States will continue to implement exchanges on different schedules through 2014.
To reduce duplication of effort and the administrative burden on the states, HHS also announced that the federal government will partner with states to make Exchange development and operations more efficient. States can choose to develop an Exchange in partnership with the federal government or develop these systems themselves. This is intended to allow states more flexibility to focus their resources on designing the right Exchanges for their local insurance markets.
For more information on Exchanges, including fact sheets, visit www.healthcare.gov/exchanges.