States may take at least three different approaches to splitting oversight work between health insurance exchanges and state insurance regulators, according to Lee Goldberg.

Goldberg, director of health policy at the National Academy of Social Insurance (NASI), Washington, describes those approaches in written testimony he has submitted to the Exchanges Subgroup at the National Association of Insurance Commissioners (NAIC), Kansas City, Mo.

Goldberg may testify this week at a hearing the subgroup intends to hold at the PPACA CompassNAIC’s spring meeting in Austin, Texas.

The health insurance exchanges provisions in the federal Patient Protection and Affordable Care Act (PPACA) encourages states to create new entities that will help individuals, families and small groups use new federal income tax subsidies to shop for health coverage.

Republicans are trying to block implementation of PPACA. If PPACA takes effect as written, a state will be able to set up one exchange or several exchanges for its residents, let residents participate in a multi-state exchange, or let the federal government provide exchange services for its residents. Exchanges must sell “qualified health plans,” and those plans must meet standards set by the U.S. Department of Health and Human Services (HHS).

NASI has developed suggestions for the language that the NAIC could use when drafting exchange model laws, model regulations and model batches of guidance.

Goldberg notes in his written testimony that states will have to decide how to allocate responsibilities and expenses between exchanges and health insurance regulators:

  • A state that wants strong health insurance regulators could put the regulators in charge of ensuring the health carriers wanting to sell coverage through an exchange meet state licensing requirements, solvency requirements and qualified health plan requirements.
  • A state that wants a strong health insurance exchange could let the exchange handle all questions about whether a health carrier meets PPACA and exchange-created requirements.
  • A state that wanted to follow a middle course could decide on a case-by-case basis which responsibilities to give to the exchange and which to give to the insurance regulators, based on resources, experience and efficiency.

Some states also may need new laws to help manage adverse selection inside and outside the exchange system, and the tendency of low-risk groups with 50 to 100 lives to choose to self-insure, Goldberg says.

Other health insurance exchange coverage from National Underwriter Life & Health: