Health Insurance Exchange Proposed Rule Published

Yesterday, the US Department of Health and Human Services (HHS) released two long-awaited proposed rules relating to the establishment of Exchanges, state-based marketplaces where individuals and small businesses can purchase health insurance coverage. One proposed regulation sets forth the minimum functions of an Exchange and the certification of qualified health plans (QHPs) - online here. In a related proposed rule, HHS establishes a risk adjustment system to assure health care coverage for higher-risk populations - online here.


Additional regulations related to Exchanges will be issued at a later date. These future regulations will address issues including: standards for individual eligibility for participation in an Exchange, the appeals process for eligibility determinations, the definition of essential health benefits, payments of the premium tax credit, and quality standards for Exchanges and QHPs issuers.

Under the proposed rules, the marketplaces will have to post information online about price and quality, offer specific standardized plans and set an annual open enrollment period. Despite lobbying from consumer groups, insurers will be allowed to hold seats on exchange oversight boards and states will not be required to negotiate with plans on price or benefit offerings.  Although there is a deadline of Jan. 1, 2013 for states to show they will have an exchange up and running a year later, the proposal offers some wiggle room: States showing progress will be granted "conditional approval."  HHS is seeking public comment over the next 75 days.