The HHS (US Department of Health and Human Services) has introduced its proposal - Affordable Insurance Exchanges - the aim being to have state-based competitive marketplaces where people and smaller businesses can buy private health insurance at reasonable prices. The HHS claims individuals would then have the same health insurances choices as those currently enjoyed by members of Congress.
Consumer groups and industry in general praised the plan.
Exchanges is planned to start in 2014. The HHS says small businesses (with fewer than 100 workers) and individuals will be able to compare available health insurance plans, receive answers to inquiries, see whether they can receive tax credits for private insurance or such health plans as CHIP (Children's Health Insurance Program), and select the health plan best suited to their own requirements.
No plan will be able to turn down health insurance coverage to individuals with pre-existing conditions.
HHS Secretary Kathleen Sebelius, said:
"Exchanges offer Americans competition, choice, and clout. Insurance companies will compete for business on a transparent, level playing field, driving down costs; and Exchanges will give individuals and small businesses the same purchasing power as big businesses and a choice of plans to fit their needs."
The HHS is proposing new rules which offer states options and guidance on how to build their exchanges, especially in the following two areas:
- Certifying health plans for participation in an Exchange, laying down standards for setting up Exchanges, establishing a SHOP (Small Business Health Options Program), and carrying out the basic functions of an Exchange.
- "Ensuring premium stability for plans and enrollees in the Exchange, especially in the early years as new people come in to Exchanges to shop for health insurance."
The District of Columbia, four territories and forty-nine states accepted federal grants to help set up and run Exchanges. Half of all the states have gone further, e.g. some have passed new laws or are taking Administrative action to begin creating Exchanges.
Steve Larsen, Director, Center for Consumer Information and Insurance Oversight, said:
"States are leading the way in implementing health reform, and today's announcement builds on that momentum by giving states flexibility to design the Exchange that works for them. This regulation allows us to meet states where they are."
The proposal also allows states to determine whether their own Exchanges should be regional, local, or run by a not-for-profit organization, or whether to partner with HHS.
By January 1st, 2013, States will have to show that they are able to run an insurance exchange within a year, otherwise the federal government will run it for them.
The proposal, which is several hundred pages long, is open for comment for the next 75 days.
The nonpartisan Congressional Budget Office estimates that 24 million Americans who do not get health insurance from their employer will have insurance via Exchanges by 2019.
Dr. Don Berwick, head of the Centers for Medicare and Medicaid Services, said:
"Flexibility is the name of this game, and we are going to work very hard to meet the needs of each and every state."
Karen Ignagni, head of America's Health Insurance Plans, the industry's Washington-based lobbying arm, said:
"The regulation is a strong message to states
that they are in charge."
"Coming in 2014: Affordable Insurance Exchanges"
Written by Christian Nordqvist