This week’s final exchange rule from HHS is unlikely to
be the last large package of rules implementing ACA that we will see in the coming
weeks–we still expect regulations on Medicaid eligibility, premium tax credits,
and risk adjustment, not to mention more on the essential health benefits and
other key topics at some point in the future. But before those other regs arrive to compete for our
attention and yours, we wanted to at least begin to summarize what we’ve seen
in the exchange rule. I’m taking
the first look at the lengthy rules in this post. Look for future posts from my colleagues to unpack more on
the regs–we may not get to them all before the next round hits, but we’ll do
our best to read them all so you don’t have to (you still can if you
want!).
The rules announced this week (to be published in the Federal Register on March 27) deal with the process for
states to establish their exchanges, the basic functions that exchanges will
perform, the guidelines for exchanges in making eligibility determinations, and
the certification standards for plans offered through exchanges. This first post will focus just on the
rules for states establishing exchanges.
Overall, the final rule is similar to the proposal from
last summer. In order to have its
exchange approved by HHS, a state or exchange must submit and receive approval
for an Exchange Blueprint as well as pass a readiness assessment. Conditional approval is possible if HHS
determines a state is likely to be fully operationally ready by October 31,
2013. While the proposed regs had
referred to an Exchange Plan rather than a Blueprint, HHS seems to have changed
the terminology to distinguish the exchange document from State Plans under
Medicaid and CHIP. Rather than a
formal State Plan Amendment process as occurs in Medicaid and CHIP, exchanges
will only need to apply to HHS for approval of “significant changes” to their
Exchange Blueprints. HHS will have
60 days to consider such changes–if it does not deny the change within that
period (or extend it with good cause by another 30 days), the state’s change
will go into effect.
The regulations provide some further guidance on exchange
governance. They specify that an
exchange must serve both individuals and small employers, but a state may
establish a separate governance and administrative structure for the small
business exchange. This means that
states that wish to run only an individual or a small business exchange will
not have an approved state exchange–they will have to pursue “partnership”
options.
One change from the proposed regulation that moves the
rule in a positive direction is a requirement that state exchange governing
boards (if the exchange is an independent state agency or a non-profit) must
include at least one consumer representative. Unchanged is the rule that individuals who have a conflict
of interest (those affiliated with an insurer, agent, or broker) may serve on
the board, but may not make up a majority of the board.
The final rules also require exchange boards to make
publicly available certain “governance principles” that include ethical
standards, conflict of interest policies, transparency and accountability
standards, and a procedure for disclosing relevant financial interests of board
members.
These rules provide some helpful guidelines for states
that have established or are moving to create their own exchanges. Many states, though, seem to be
preparing for a federally-facilitated exchange, at least for 2014. This week’s regulations don’t provide
more information on what the federally-facilitated exchange will look like–they
only promise future guidance on the topic. They also mention coming guidance on how states can
transition from a federally-facilitated exchange to a state-run exchange. These transition procedures will be
particularly important for states that choose to establish their own exchange,
but cannot meet the deadlines to have it up and running in time to provide
coverage starting in January 2014.
Some of this week’s exchange regulations will be
published in interim final status, meaning they remain open to comments from
the public. But none of the
exchange establishment provisions mentioned here are in that status–they are
final rules. In the days ahead,
we’ll look at the remaining provisions of the exchange regulations and
highlight where it makes sense for child and family advocates to comment.