New healthcare exchange rules issued for states

WASHINGTON Mon Mar 12, 2012 4:53pm EDT

A nurse is given the vaccine against the H1N1 swine flu during a vaccination session for front line medical staff at the Countess of Chester Hospital in Chester, northern England, November 6, 2009. REUTERS/Phil Noble

A nurse is given the vaccine against the H1N1 swine flu during a vaccination session for front line medical staff at the Countess of Chester Hospital in Chester, northern England, November 6, 2009.

Credit: Reuters/Phil Noble

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WASHINGTON (Reuters) - The Obama administration on Monday released broad new operating rules for state-run health insurance exchanges, which form a key part of the 2010 federal healthcare reform law that will face landmark Supreme Court hearings in just two weeks.

The long-awaited regulations, released by the Department of Health and Human Services, are intended to provide state lawmakers and officials flexibility on federal deadlines as they meet the complex task of building state and regional insurance markets before a January 1, 2014, deadline.

In a 642-page final rule, the government provides guidance on how states should establish exchanges, qualify health plans for participation and determine the eligibility of both individuals and small business that want to use exchanges to provide health coverage to their employees.

Industry and consumer groups welcomed the regulations, saying they provided states with the flexibility necessary to meet consumer needs for choice and quality protections. They also said the regulations shift policy focus to the state level, where the new rules must be implemented.

State exchanges are part of a two-pronged effort to provide health coverage for about 30 million uninsured Americans under the Patient Protection and Affordable Care Act, which also calls for a dramatic expansion of the joint federal-state Medicaid program for the poor.

The exchanges amount to federally subsidized state-run insurance markets designed to operate like Amazon.com by providing consumers Web-based access to affordable health plans that meet minimum quality standards.

But how state exchanges perform could be determined by a high profile Supreme Court case in which 26 states and a business group claim healthcare reform should be overturned as unconstitutional because it requires most adults to buy private health insurance or pay a penalty.

That requirement, known as the individual mandate, is intended to limit insurance risk in the exchanges by ensuring that younger, healthier adults participate. Otherwise, analysts say, the exchanges could become dominated by older, sicker adults, which would mean higher costs and fewer participating plans.

The Supreme Court will hear oral arguments March 26-28 and is expected to issue a ruling by July 1.

Many states have delayed participation until the ruling is out. About 33 states have received federal grant money to help set up exchanges.

The new rule retains a January 1, 2013, deadline for state exchanges to meet federal standards but also would allow states to qualify after January 1 if they can prove their exchanges will be ready to offer open enrollment by October 1, 2013.

The federal government will establish its own exchanges in states that fail to meet standards in time.

The administration is still working on a national regulation to establish essential health benefits that insurance plans must provide to participate in the exchanges.

Mike Russo, policy analyst at the public interest group US PIRG, said the new rules give states substantial leeway in establishing exchanges. But he called on state governments to exceed minimum requirements to negotiate on rates and coverage on behalf of consumers.

The insurance group America's Health Insurance Plans said it would be important to avoid duplicating existing state laws as exchanges develop, warning that duplication would add to complexity and increase costs for consumers.

(Reporting by David Morgan; Editing by Gary Hill)

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Comments (5)
AZWarrior wrote:
History keeps telling us that these “collectives” always devolve into uncompetitive, higher cost failures. Fortunately for the left, Americans have little knowledge or interest in history. Another great opportunity for the criminals to scam hugh dollars.

Mar 12, 2012 5:40pm EDT  --  Report as abuse
NobleKin wrote:
@AZWarrior

Perhaps one of the great reasons why it should have been a fully socialized single payer system instead of a mandate to continue supporting the pirates that have fueled rising healthcare costs since the 80′s: Big Insurance.

When Healthcare coverage costs continued to soar and with more Americans either unable to get coverage (denied or dropped) or unable to afford coverage (both groups relying on government care via Medicare or Medicaid) through the Bush years, the problem was only getting worse…and helped Obama get elected.

Obamacare, as the Republican’ts like to state it, was the last potential measure to keep private insurers in the long-term game. The problem is we don’t need a middle man insurer. They don’t help with better healthcare, they only add in layers of cost we cannot afford.

Which would you rather have? More high paid insurance executives and staffers or more well paid healthcare providers? In the long run we can’t have both and if we go back to the pre-Obama solution we will be right back where we started…

We should be investing our efforts in broadening our number of capable medical facilities and educating more to become practitioners to staff them.

Mar 12, 2012 6:37pm EDT  --  Report as abuse
gregbrew56 wrote:
Why is it that the U.S.A. is the only industrialized nation that lets corporations make a profit by denying patients healthcare?

Mar 12, 2012 9:38pm EDT  --  Report as abuse
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