Speaker Shap Smith talks with lawmakers about a health care bill Thursday, Feb. 23, 2012 in Montpelier, Vt. that would set up a new health insurance exchange in compliance with the federal health reform law passed two years ago. (AP Photo/Toby Talbot)

Every state will have a health insurance exchange—whether operated by a particular state or by the federal government—when the system is scheduled to be implemented on Jan. 1, 2014, the head of the government bureau implementing the healthcare law said today.

Clearly, said Steve Larsen, deputy administrator and director of the Center for Consumer Information and Insurance Oversight (CCIIO) at the Department of Health and Human Services, the launching of exchanges system will rest on whether the Patient Protection and Affordable Care Act (PPACA) is upheld by the Supreme Court. The CCIIO is now housed in the Centers for Medicare and Medicaid Services.

“It will be one of the most important decisions [by the court] in a long time,” he said.

As to the final rule implementing the exchanges, Larsen implied that release was imminent.

He used the words, “very soon” and “very close” in discussing the exchange regulations, but an aide declined to confirm or deny whether those rules are resting with the Office of Management and Budget, which has the final say in approving a proposed or final federal regulation.

Larsen made his comments as the opening speaker at the 2012 National Policy Forum of America’s Health Insurance Plans, being held today and Wednesday in Washington.

At the same time, HHS released on the National Association of Insurance Commissioners’ website today the latest revised version of its “recommended approach” for an updated state-specific threshold for rate increases.

It appears that HHS has determined that the threshold for examining proposed rate increases by insurance companies will remain at 10 percent.

The comment period on the proposal ends March 12th.

In the white paper, CCIIO said, “… based on available data, it appears that medical costs are not increasing at a faster rate than they were in December 2010, when the proposed regulation was published.”

The proposed white paper added, “This would appear to argue against any increase in the threshold for reviewing rate increases.  The process described below would provide an opportunity for States to present evidence of unique conditions that would justify a threshold higher than 10%.  However, HHS would be more inclined to grant a request from a State that the threshold be lower than 10%.”

Larsen said that HHS reviewed 12 proposed rate increases in states where the governments declined to get involved, and found that 6 were unreasonable increases and 6 were not.

Larsen also said that HHS had completed reviews of 18 state requests for exemptions or exceptions on the medical loss ratio formula, rejecting 11, adjusting six and fully approving Maine’s request.

In his comments on exchanges, Larsen said that, obviously pending Supreme Court approval of the law, “every single state will have an exchange in operation as of Jan. 2014, and they will be similar.”

He and an aide acknowledged that some states will add their “own innovations,” but every consumer will have access to an exchange.”

He said market conduct rules will be released “relatively soon,” and that other rules in the works, including the summary of benefits proposal, are being worked on.

He said the agency has issued contracts for site development for the federal exchanges, as well as creating the data services “hub” that will be crucial as the single point of entry for federal exchanges.

“We are deep in development of the exchanges; there is tons of work going on,” Larsen said.