States Get Flexibility in Setting Up Insurance Exchanges


States Get Flexibility in Setting Up Insurance Exchanges

Tuesday, July 12th, 2011 - 7:48
Tuesday, July 12, 2011 - 07:37
Rules released by the federal government to govern insurance exchanges in the states emphasize flexibility.

The Department of Health and Human Services on Monday released proposed rules to govern insurance exchanges in the states, according to Kaiser Health News and multiple media outlets.

States have long been anticipating the rules to determine whether they would have significant leeway to implement the exchanges as they saw fit, or whether they'd have to comply with more specific rules from the federal government.

HHS has largely decided to give states the flexibility they were asking for. For example, states can choose whether they want to allow all insurance plans into the exchange or whether they want to set specific parameters plans must meet before gaining access. States will not be forced to negotiate with insurers.

States also got a little leeway on what has increasingly become a pressing time constraint for many. Under the health law, states had to demonstrate by January 2013 that they were ready to run their own exchange starting in 2014. Under the proposed rules, states will be able to get "conditional approval" even if they don't appear immediately ready. If they don't get conditional approval, or aren't ready by 2014, the federal government will step in to run the exchange.

Insurers will also be able to hold seats on the boards that govern the exchanges, something that consumer advocates had pushed back against. Finally, each exchange will be required to establish an annual open enrollment period.