Administration releases proposed rule on exchanges

The Obama administration is working on easing the operation of the new health insurance exchanges under the Patient Protection and Affordable Care Act.  
The Centers for Medicare & Medicaid (CMS) issued a proposed rule on the exchanges June 17th that aims to provide clarifications, outline oversight of various premium assistance programs and give states more flexibility.

The 253-page rule, released by both the CMS and the Department of Health and Human Services (HHS), is intended to “safeguard federal funds and to protect consumers by ensuring that issuers, marketplaces and other entities comply with federal standards meant to ensure consumers have access to quality, affordable health insurance,” according to the agencies.

In a statement, CMS Administrator Marilyn Tavenner said “the release of these guidelines signals that we’re ready to build on our ongoing efforts and ensure that the new systems are fiscally sound.”

As open enrollment in the new exchanges nears, the administration has struggled with marketing the exchanges and getting both states and consumers on board. The new rules aim to fill in the blanks on some unanswered questions. The new exchanges are a main component of President Obama’s health reform law.

Open enrollment in the exchanges begins in October while coverage begins Jan. 1.
Under the proposed rule, states that operate risk adjustment or reinsurance programs would have new oversight standards that require them to report their operations plans to HHS and the public, and adopt strategies that would “ensure the soundness and transparency of the programs.”

Insurers would be required to issue refunds to consumers and providers if they erroneously apply an advance payment of the premium tax credit or cost-sharing reductions, or incorrectly assign consumers to a standard plan without cost-sharing reductions.

Under the proposed rule, CMS would amend the definitions of "small employer" and "large employer" so each state can limit small employers to having no more than  50 employees until 2016.

The rule also sets guidelines on exchange payments and helps allow people without bank accounts or credit cards to pay for coverage in the exchanges. The proposed rule would require a qualified health plan accept paper checks, cashier’s checks, money orders and refillable pre-paid debit cards so all individuals can pay their monthly premiums. Experts had predicted that millions of "unbanked" consumers would face challenges getting health insurance if the federal government didn't address the problem.

The rule also would allow a state to operate a state-based, small-business health options program (SHOP) while HHS would run the state's individual market federally facilitated exchange. CMS will publish the proposed rule in the June 19 Federal Register and the public will have 30 days to comment.