PPACA: Will Exchanges Be Producers?

AHIP also has asked that the same market regulations that apply outside the exchange environment apply to the plans inside the exchange system.

“This should be done to ensure that individuals and small groups can continue to purchase coverage outside of the exchange as well as inside the exchange to help avoid selection issues across the markets, and limit unintended consequences that could undermine support for the new market,” AHIP says.

Another important element will be creating standardized forms that carriers can use to give consumers accurate, easy-to-understand and easy-to-compare information about the plans sold through the exchanges, AHIP says.

Timothy Jost and Stephen Finan, who represent consumers in NAIC proceedings, note that the cost of exchanges may amount to about 3% to 4% of total coverage costs.

The exchanges “must reduce costs elsewhere for employers and insurers if they are to compete with the non-exchange market,” Jost and Finan say. “An important issue here may be brokers’ commissions, as the role of brokers will certainly change with the coming of the exchanges and brokers will probably play a diminished role in the individual market. This will undoubtedly be a contentious issue in many states, but restructuring costs and overhead in the system to meet the needs of the exchanges is critical to ensuring the exchanges’ success.”

The exposure draft does not say much about producers.

In a drafting note, officials say, “Depending on how a State establishes its Exchange, a State may need to consider whether the Exchange should be exempt from the State’s insurance producer or consultant licensing requirements or whether the Exchange needs to obtain such a license.”

Elsewhere, the draft says a health carrier qualified to offer coverage through an exchange should charge “the same premium rate for each qualified health plan without regard to whether the plan is offered through the Exchange and without regard to whether the plan is offered directly from the carrier or through an insurance producer.”

When an exchange is selecting the nonprofit entities that will serve as Navigators, it should provide grants that will help the Navigators “distribute fair and impartial information concerning enrollment in qualified health plans, and the availability of premium tax credits … and cost-sharing reductions.”

An exchange also should provide grants to help the Navigators “facilitate enrollment in qualified health plans,” and to “provide referrals to any applicable office of health insurance consumer assistance or health insurance ombudsman … for any enrollee with a grievance, complaint or question regarding their health benefit plan, coverage or a determination under that plan or coverage,” according to the draft text.