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Official: Federal exchange plan bids due April 30

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The U.S. Department of Health and Human Services (HHS) hopes to take bids from insurers that want to participate in the federal health insurance exchange programs from March 28 to April 30.

HHS officials hope to make decisions about which plans will appear on the exchange menus in each state in July, according to Gary Cohen, the director of the federal Center for Consumer Information & Oversight (CCIIO).

Cohen acknowledged that everyone is wondering whether the federal exchanges will be ready to sell coverage by the Oct. 1 deadline set by the Patient Protection and Affordable Care Act of 2010 (PPACA).

“We will be ready,” Cohen said.

Cohen appeared today at a hearing on the PPACA health insurance exchange program that was organized by the Senate Finance Committee.

CCIIO — an agency that pronounces its name as “See-Sigh-O” — is an arm of the Centers for Medicare & Medicaid Services (CMS), which is, in turn, an arm of HHS.

HHS and CMS created CCIIO to take charge of implementing many major PPACA provisions.

PPACA calls for HHS to work with state officials to set up a system of exchanges, or Web-based health insurance supermarkets, to help individuals and small employers shop for high-quality, affordable health coverage.

States can handle all or part of the exchange duties if they want, but HHS expects to help or take full responsibility for running exchange programs in more than half of the states in 2014.

Cohen faced tough questions from Democrats on the committee as well as from Republicans.

Sen. Orrin Hatch, R-Utah, noted that CCIIO and HHS are still working on the final versions of many of the regulations that health plans will need to prepare bids, states will need to handle their share of the duties associated with HHS-run, “Federally Facilitated Exchanges,” and CCIIO will need to run the FFEs.

“I just don’t see how it’s going to work,” Hatch said.

Hatch noted that some organizations are predicting that individual health insurance rates will double in some markets after all PPACA coverage rules take effect.

Both Democrats and Republicans expressed disappointment that the Obama administration had let funding for creation of new CO-OP plans — a new type of member-owned, nonprofit health plan — disappear when the administration and Republicans were resolving the recent budget crisis. 

Maria Cantwell, a Washington state Democrat, and Michael Enzi, a Wyoming Republican, both asked about HHS delays in efforts to write the regulations and develop the programs needed to create CO-OP plans and other new types of plans included in PPACA.

“Without CO-OPs, there’s not much opportunity to expand competition,” Enzi said.

Also at the hearing, Don Hughes, a health policy advisor from Arizona, a state that considered setting up an exchange and ultimately decided not to, said Arizona decided to wait because of delays in getting final regulations and tools from HHS.

Arizona wanted to solicit bids from January through March, but Hughes’ understanding is that HHS and the National Association of Insurance Commissioners (NAIC) will not complete work on the actuarial value calculator, minimum value calculator, SERFF plan management tool and other important tools until March 28, 2013.

Arizona believes that the delays in getting those tools ready makes trying to set up a state-based exchange too risky at this time, Hughes said.

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