5 essentials for a minimal state-based PPACA exchange

2. A state has to work with the HHS exchange program to oversee health plans and provide some consumer assistance.

Some states have avoided setting up their own exchanges because they don’t want to pay for all of that work, or don’t think they’re prepared to assume that operational responsibility.

Others oppose PPACA on principle.

Some would prefer to avoid having to do business with HHS.

Ario says he believes a state that wanted a minimalist exchange that is just state-established enough to offer the PPACA tax credits will at least have to oversee the exchange qualified health plans (QHPs) and operate a consumer navigator program and other consumer assistance programs.

But even some states that have had HHS provide exchange services in their states have been overseeing the QHPs and providing consumer assistance, Ario says.

See also: Illinois picks state-HHS partnership exchange strategy

3. A state may have to meet 70 statutory requirements, and many sets of regulatory requirements.

If even most Republicans end up agreeing that states need a way to keep their PPACA premium tax credit programs going on an emergency basis, states and HHS may find a quick way around any regulatory requirements imposed by the Obama administration.

But, especially if any lingering hostility toward emergency tax credit extensions remains, and, for example, the plaintiffs in King vs. Burwell are ready to shoot into court to challenge any state failures to dot statutory I’s and cross statutory T’s, states  that want to set up minimalist exchanges will have to lawyer up, according to Schiffbauer. 

He notes, for example, that PPACA Section 1311(b)(1) requires each state to set up an American Health Benefit Exchange not later than Jan. 1, 2014, and that an exchange must be self-sustaining beginning on Jan. 1, 2015.

The statute itself says a state-based exchange must meet a number of minimum functional requirements, such as providing a toll-free telephone assistance hotline and establishing a consumer Navigator program. 

4. A minimalist exchange has to be a good listener.

Schiffbauer says PPACA requires an exchange to consultant with relevant stakeholders, including consumers, small business, Medicaid offices, advocates and Indian tribes.

5. A minimalist exchange has to establish a system for providing exemptions for individuals who have good excuses for getting out of the PPACA individual coverage mandate.

States that dislike the PPACA exchange system might enjoy running the operation that grants mandate exemptions.

See also: Highways to PPACA tax penalty freedom

But Schiffbauer does not distinguish between functions that a state must do itself and functions that a state must ensure that someone does. It could be that a state could hire a vendor, a neighboring state, or HHS itself to perform some of the required functions on Schiffbauer’s list.