The NAIC leadership told U.S. Department of Health and Human Services Secretary Kathleen Sebelius that there are certain participation hurdles facing states in setting up exchanges or partnerships under the health care reform and suggested to the HSS that it assume responsibility for some information technology functions, as well as subsidy eligibility and administration functions.

The lack of flexibility in allowing states to make certain selections on core functions in lieu of building full health care exchanges required under the Patient Protection and Affordable Care Act (PPACA) could, in fact, keep some states from even participating in any proposed state partnership model, said the NAIC in a Nov. 7th letter.

Just a week later, Oregon Insurance Division Administrator Teresa Miller announced she had accepted a position with the federal agency charged with implementing many of the provisions of the Act, including the development of health insurance exchanges. 

Miller will serve as a senior advisor to Steve Larsen, director of the Center for Consumer Information & Insurance Oversight (CCIIO).

“I will be working with state government stakeholders, assisting states as they develop health insurance exchanges.  My last day in the office will be Nov. 23,” Miller wrote in an email to staff.

The NAIC, in its letter, was following up on a State Exchange Grantee Meeting held in Washington on Sept. 19 on the State Partnership Model. Under the model, as on the  Center for Consumer Information and Insurance Oversight (CCIIO)website run by HHS’ Centers for Medicare & Medicaid Services, states not electing to operate the Exchange could elect to perform some functions related to plan management, consumer assistance, or both.

The NAIC is concerned that the lack of flexibility in allowing the states to select which elements of the five core functions they would like to perform could prevent some states from participating in the partnership.

“We urge you to provide more options for the states to ensure the greatest amount of coordination and a seamless integration of regulatory processes,” said the NAIC leadership.

HHS did not immediately respond to a query.

The letter was signed by Susan Voss, outgoing NAIC  President and Iowa Insurance commissioner, Kevin McCarty, now NAIC president, and Florida commissioner—whose state nixed the Exchange model as handed down from HHS under the reform act, James Donelon, Louisiana Insurance commissioner and Adam Hamm, North Dakota commissioner.

States that are going forward to establish exchanges should have some functions of them, at least,  performed by the federal government, to help things along, according to the NAIC letter.  

The state regulatory system  support group association said that  many states, especially those encountering challenges to the 2013 certification deadline,  would be interested in HHS—the federal government—“assuming responsibility for some information technology functions, as well as subsidy eligibility and administration functions.”