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Stakeholders seek regulatory direction on insurance exchanges

A panel representing state, insurance and employer interests told the House Ways and Means health subcommittee on Sept. 12 that they need more concrete direction from the federal government on how to set up the Affordable Care Act’s health insurance exchanges as implementation dates fast approach on these new coverage marketplaces.

The Dept. of Health and Human Services has asked states to select their “benchmark” plans on essential health benefits by the end of September. “But no rule, proposed or final, has been released outlining the details of this process,” said Michael Consedine, Pennsylvania’s insurance commissioner, testifying before the panel. The essential health benefits are the minimum coverage standards that must be followed by the exchanges and some health plans outside of the exchanges starting in 2014.

Many unknowns surround the selection of these benefits, including whether HHS could modify or override a state’s choice and replace it with another option, he said. Other key regulations on the exchanges and various health system reform provisions have yet to be issued, Consedine said, prompting him to write a letter to HHS Secretary Kathleen Sebelius in August asking the department to answer specific questions that would help the state make decisions on its exchange.

Pennsylvania Gov. Tom Corbett supports the idea of a state-based exchange, and the state has received several federal planning grants to develop one. But according to the latest state exchange profile data from the Kaiser Family Foundation, Pennsylvania has yet to approve legislation authorizing the creation of an exchange.

“Continuing without answers to these crucial issues is like driving down a winding road, at night, without any headlights — nothing good will come of it,” Consedine said.

Various trade groups also weighed in, calling for more details on various aspects of exchange implementation. “The question of whether an eligible employer purchasing coverage through a small-business exchange [Small Business Health Options Program, or SHOP] will select one plan for his or eligible employees or provide them with a defined contribution that can be used to select among plans and levels of personal responsibility is not fully defined,” said Neil Trautwein, vice president and employee benefits policy counsel with the National Retail Federation.

Daniel T. Durham, executive vice president for policy and regulatory affairs with America’s Health Insurance Plans, said there was an “urgent need” for regulatory guidance on the reform law’s exchanges and other insurance market reforms.

HHS has issued various guidance documents and bulletins on the exchanges and other ACA provisions, but those documents lack the notice and comment protocols that employers need to plan ahead for these health system reforms, Trautwein said.

In a statement, HHS clarified that it had not established a hard deadline for states to submit their essential benefits benchmark but rather had encouraged them to issue their selections by Oct. 1. HHS will work with any state whose decision comes in after this date, the department indicated, an approach that “maximizes state flexibility as they continue to build their health insurance marketplaces.”

Rep. Pete Stark (D, Calif.), the Ways and Means Committee’s top Democrat, said the hearing was premature, given that states have until Nov. 16 to submit their blueprints on the exchanges. “Before then, we cannot obtain a clear picture of who is where with respect to state versus federal exchanges,” Stark said in a statement. Under the ACA, the federal government will operate a federal exchange in states that do not put one in place.

If spring 2013 rolls around without any regulations, then there might be a problem, Stark said. “But, near as I can tell, the administration has gone to great lengths to seek input in the pre-regulatory process from the very sectors and stakeholders before us today so that the actual regulations will be informed by the concerns of these communities.”

In her testimony, Heather Howard, director of the Robert Wood Johnson Foundation’s State Health Reform Assistance Network, said many states were working to have their state-based exchanges in place by the official implementation date of Jan. 1, 2014. Others might have to rely on federal support on a temporary basis while they develop their exchanges, and “still others have done little beyond basic research in preparing for an exchange,” she said.

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