Flexible federal health insurance exchange regulations could give states the freedom to move quickly to set up ambitious programs – or get them stuck in political quicksand.
Drew Altman, president of the Henry J. Kaiser Family Foundation, Menlo Park, Calif. – a major health policy think tank – delivers that assessment in a new commentary on draft health insurance exchange regulations recently proposed by the U.S. Department of Health and Human Services.
If the Patient Protection and Affordable Care Act of 2010 (PPACA) takes effect as written and works as supporters hope, the exchanges will help individuals and small groups buy health coverage using a new system of subsidies starting in 2014.
A state will be able to let several exchanges operate within its borders, set up one exchange, join a multi-state exchange consortium, or put the federal government in charge of providing exchange services for its residents. A state and its exchanges also can set health insurer participation rules.
HHS officials emphasized in comments on the draft that they want reflect the flexible spirit of the exchange provision by encouraging state officials to develop exchanges that suit local needs and local preferences.
“This means, for example, that states will have a high degree of discretion in deciding whether to take a more free market or more regulatory approach in moderating the growth in health insurance premiums,” Altman writes. “Under any scenario, plans offered in exchanges will be run by private insurers. But, a state can choose to create a more powerful, highly-regulated exchange, one that is part of state government and has the authority to negotiate premiums and selectively-contract with insurers. Or, a state could build a less-constrained marketplace, operated by a non-profit exchange that acts as an Amazon.com-like clearinghouse for any insurer that meets minimum requirements.”
The flexible rules could lead to wide variations in how completely and how well states implement the exchange provision, Altman says.