On Wednesday, HHS announced that states have until Nov. 16 to submit proposals outlining how they plan to operate health insurance exchanges under the federal health reform law, Reuters reports (Morgan, Reuters, 5/16).
The department also released guidance on how it will work with states to establish a "federally facilitated exchange" for those that opt not to administer their own marketplaces, and an "Exchange Blueprint" (Reichard , CQ HealthBeat, 5/16).
Under the federal health reform law, states by January 2014 must create insurance exchanges that provide coverage options for individuals and small businesses. States can choose to administer their own exchanges -- for which they must have some infrastructure in place by January 2013 -- or have the federal government run the exchanges for them.
The third option -- the partnership model -- would allow the government to assist states in establishing the exchanges without completely taking over operations (California Healthline, 9/21/11).
About the Guidance
The guidance document outlines how HHS "will consult with a variety of stakeholders to implement an FFE, where necessary, how states can partner with HHS to implement selected functions in an FFE and key policies organized by exchange function."
The guidance states that in the first year of the FFE, HHS will regulate an "open market" that prevents health plans from being disqualified based on premium rates (Reichard , CQ HealthBeat, 5/16). HHS will allow any health insurer to sell a plan as long as it meets requirements in the overhaul (McCarthy, National Journal, 5/16).
Ahead of the announcement, some states had said that they were unable to decide whether to operate their own exchanges or let the federal government take over because of a lack of information on how the latter would operate.
States that opt to operate their own exchanges will file for either full approval or conditional approval, meaning there are some functions that will not be developed by Jan. 1, but they expect to complete during next year. States will apply using the exchange blueprint and must say which functions they are equipped to handle themselves and which they are not (Reichard , CQ HealthBeat, 5/16).
States have until Nov. 16 to submit an application for the partnership model (National Journal, 5/16). Under the partnership model, states will agree to be responsible for plan management, consumer assistance or both (Reichard , CQ HealthBeat, 5/16). States could be responsible for determining which health plans are in the exchange and identifying residents who qualify for Medicaid or subsidies to help them purchase private coverage (Radnofsky, Wall Street Journal, 5/16).
The federal government will operate all other exchange functions, such as establishing eligibility for tax credits (Reichard , CQ HealthBeat, 5/16).
Six States Receive $181M To Establish Exchanges
Also on Wednesday, HHS announced that six states -- Illinois, Nevada, Oregon, South Dakota, Tennessee and Washington -- will receive $181 million in grants to establish their exchanges, Reuters reports (Reuters, 5/16).
All of the states -- aside from Washington -- will receive "level one" grants for one year of funding to begin the process of developing an exchange. Washington will receive a "level two" grant, which includes multi-year funding because the state is further along in implementing an exchange (Reichard , CQ HealthBeat, 5/16).
GOP Analyst Criticizes Sebelius, Overhaul Ahead of Exchange Announcement
Ahead of Sebelius' announcement, a senior GOP policy analyst attacked the idea that the health reform law will lower premiums, National Journal reports.
Chris Jacobs, senior policy analyst for the Republican staff on the Joint Economic Committee, in a blog post wrote, "This afternoon's call should not focus on Secretary Sebelius repeating the same old, tired, and debunked claims that [the overhaul] will lower premiums," adding, "The real question is whether the Secretary will finally apologize on behalf of the entire Obama administration for failing to deliver on its broken promise to lower health costs now for struggling middle-class families" (Fox, National Journal, 5/16).
Whitehouse Highlights Private Sector Efforts To Improve Health Care
In related news, Sen. Sheldon Whitehouse (D-R.I.) on Wednesday chaired a hearing of the Health, Education, Labor and Pensions Committee intended to draw attention to changes in the private sector that have improved quality and patient outcomes while reducing costs and how the health reform law has fostered those changes, CQ HealthBeat reports.
Whitehouse highlighted efforts at Coastal Medical, a physician-operated group practice that delivers primary care to 10% of Rhode Island residents. Coastal Medical CEO Alan Kurose at the hearing said electronic health records and "nurse care managers" have helped to increase efficiency. Whitehouse said the "advantage of this approach is that it does not rely on shifting costs or cutting benefits."
According to CQ HealthBeat, many of the improvements made by Coastal Medical are consistent with the idea of a "patient-centered medical home" featured prominently in the health reform law.
Republicans skipped the hearing, but Sen. Michael Enzi (R-Wyo.) in a statement released at the hearing said that the overhaul "undermines any serious attempt to reform the delivery of health care" in the U.S. Meanwhile, testimony from critics of the overhaul at the hearing indicated that improvements such as those at Coastal Medical are impossible to replicate unless the Medicare payment system is overhauled (Reichard , CQ HealthBeat, 5/16).
House Republicans Prepare for SCOTUS Ruling
Also in related news, House Republicans have begun preparing for the upcoming ruling by the Supreme Court on the constitutionality of the federal health reform law, Politico reports. On Tuesday, House Leaders in a small closed meeting discussed "major options," and on Wednesday House Speaker John Boehner (R-Ohio) told rank-and-file members, "When the court rules, we'll be ready."
Should the high court uphold the law, the GOP plans to continue efforts to remove provisions including the individual mandate and requirements that employers provide coverage or face penalties, according to Politico. If the law is partially or fully repealed, Republicans plan to offer bills to keep popular provisions in place, such as allowing adult children to remain on their parents' health plans until age 26 and providing coverage for people with pre-existing conditions.
Boehner stressed that the party will "relegislate the issue in smaller, bite sizes, rather than putting together an unwieldy new health care bill," according to Politico. Smaller bills will help the party avoid the "angst of the electorate that 'you followed [the federal health reform law] with some other bill no one has read,'" Rep. Phil Gingrey (R-Ga.) said (Sherman/Haberkorn, Politico, 5/16).