State insurance regulators are starting to think about the nuts and bolts of creating a giant new health coverage distribution system.
The American Health Benefits Exchange section of the Affordable Care Act, the new federal health system change package that includes the Patient Protection and Affordable Care Act (PPACA), will require the states to set up health insurance exchanges in 2014.
The exchanges must give individuals and small groups a mechanism for using government subsidies to buy standardized packages of health coverage, but the details are still emerging.
The Exchanges Subgroup, part of the Health Insurance and Managed Care Committee at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo., held a hearing on the topic last week during the NAIC’s interim meeting in Washington.
Brian Webb, manager of health policy and legislation at the NAIC, presented an overview of how the PPACA exchange provisions will work.
An exchange must be operated by a governmental or nonprofit entity, sell only health plans that meet minimum standards, and provide initial, annual and special enrollment periods.
“Qualified health plans” can range from high-deductible catastrophic plans for the young to “platinum” plans that cover 90% of the actuarial value of the benefits used.
A state must tell the secretary of Health and Human Services (HHS) that it is setting up an exchange, or the federal government will provide access to an exchange for the state’s residents by Jan. 1, 2014.
Rick Curtis, president of the Institute for Health Policy Solutions, Washington, said a state could set up an exchange in many different ways.
A state could, for example, have a small employer send information about workers’ choice of plans to an exchange but send billing, payment and enrollment change information directly to the carriers, Curtis said.
A state also could make life easier for the employer by having the employer communicate only with the exchange, and having the exchange manage all communications with carriers, Curtis said.
Representatives from Aon Corp., Chicago (NYSE:AON), presented a report noting that health carriers will have to address issues related to intermediaries, such as the “roles and responsibilities of brokers” and the role of aggregators and navigators who will serve as consumer helpers.