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PPACA: NAIC Panel Endorses Exchange Model Act

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A committee at the National Association of Insurance Commissioners (NAIC) has signed off on the American Health Benefit Exchange Model Act.

The Health Insurance and Managed Care Committee endorsed the model Monday and PPACA toolkitofficially agreed to expose it to the public, to seek comments, according to officials at the NAIC, Kansas City, Mo.

The committee’s Exchanges Subgroup developed the model to implement the Affordable Health Benefit Exchange provisions of the Affordable Care Act, the legislative package that includes the Patient Protection and Affordable Care Act (PPACA), and the Small Business Health Options Program (SHOP) provisions.

The health benefit exchange provisions require states to set up exchanges that individuals and families can use to buy subsidized health coverage. The SHOP Exchange provisions require states to set up exchanges that can help small businesses buy coverage.

The 11-page model includes a definitions section, a description of the duties of an exchange, a section on certifying whether a health benefit plan is qualified to participate in an exchange, and a section on funding.

In the version approved by the Health Insurance and Managed Care Committee, drafters say in a note that states can combine their individual health benefits exchange and SHOP exchange programs. But a state can merge the programs “only if the Exchange has adequate resources to assist these individuals and employers,” the drafters say. “States that do so will need to

reconcile the eligibility rules for participation, which are currently based on residence for individual coverage and based on employment for coverage through the SHOP Exchange.”

In the version approved by the Exchanges Subgroup, drafters included a note suggesting that, “At this time, the question remains open whether a State may allow traditional small group coverage to be offered in the Exchange.” The full committee deleted that note from the version of the model that it approved.

The full committee also simplified a section requiring a qualified health carrier to provide information about appeals and external review processes in a “culturally and linguistically appropriate manner.”

In theory, insurance and brokers might want to refer some customers to the exchange system, or possibly have some other kind of relationship with an exchange. The model approved by the full committee says of producers only that a state may need to consider whether an exchange or its employees should have to get insurance producer or consultant licenses.

A group of people who have been picked by the NAIC to represent consumer interests in NAIC proceedings briefly mention producers in a comment letter on the model.

“The Exchange structure should provide for a strong consumer and employer voice in governance, but should exclude those with conflicts of interests because they have a direct financial stake in the health system — such as organizations and individuals representing hospitals, physicians, insurers and producers,” the consumer reps say. “State officials, such as the insurance regulator and the Medicaid director should have a formal role in the governance of a successful Exchange.”


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