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Regulation and Compliance > State Regulation

What if an exchange quits?

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States that set up health insurance exchanges could shut them down at any time, and plans sold through them could disappear as well.

Officials at the Centers for Medicaid & Medicare Services refer briefly to those possibilities in a paperwork review notice for efforts to set up the Patient Protection and Affordable Care Act exchange program.

CMS officials noted that PPACA includes a section that explains what to do if a state decides to shut down a state-based exchange program after 2014.

The state would have to notify HHS of the decision, CMS officials said.

CMS officials don’t think it has to estimate the size of the burden for a state sending an exchange termination notice, because they don’t see that happening.

“We anticipate that few states with existing state-based exchanges will opt to terminate exchange operations after 2014,” officials said.

If it looks as if states will be filing about 10 exchange shutdown notices, CMS will seek federal Office of Management and Budget approval for an exchange shutdown notice process, officials said.

CMS officials go into detail about the effort they expect QHP issuers to expend on meeting the many exchange program requirements, such as providing accurate, up-to-date provider directories and sending required notices to enrollees’ doctors.

Officials said they are hoping that fewer than 5 percent of the carriers providing small-group QHPs will leave the exchange program each year.

CMS thinks generating the notices should take only about 41 hours per year for an issuer that does decide to leave a SHOP exchange, officials said.

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